Acquisition International April 2014

April 2014 /

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IN THIS ISSUE/ Greece: A New Economy in the Making: Elias Paraskevas discuss the business climate in Greece and explain how Greece is beginning to get its business model right and is showing the first signs of recovery with GDP expected to grow 0.6% this year.

Measuring the Pulse of Africa’s Economy: Jason Kazilimani Jr. the Senior Partner and Chief Executive of KPMG Zambia describes the current environment in Zambia.

2014: Growth and Trends in Relocation: Peter Sewell, Regional Director, at Crown World Mobility, explaines how to make the most of global mobility.

Due Diligence - Maximising Success URS Infrastructure & Environment

UK Limited “Robust due diligence can make a strong contribution to the overall deal, helping to meet targets and objectives.

Allowing sufficient time and funds to conduct thorough due diligence can bring substantial benefits and help to avoid ’down the line’ surprises.”

Conduit

Consulting LLC ”Focusing on the deal’s strategic intent is imperative to maximising M&A success. When performing due diligence, evaluating the target and the future-state combined company against qualifying criteria is critical.”

M&A – Making the Deal Work Conduit Consulting LLC

Gas Technologies LLC GasTechno® is one of the world’s most capital efficient gas-to-liquids (GTL) technologies. Acquisition International speaks to Walter Breidenstein, CEO and founder, to find out more. /24

“If you want to have reasonably accurate growth and value generation targets, it is imperative to include business function strategists who have considerable operating and business transformation experience on the deal team.”

Maximising M&A success in 2014 supplement /95 Due Diligence: URS Making the Deal Work: Conduit Consulting LLC

2014 Q1 Review...

EMC Corporate Finance Ltd /26 Mazars /27 MilleniumAssociates AG /28 Bin Shabib & Associates (BSA) LLP /29 Conybeare Solicitors /30 The Chambers of R. Sivagnanam & Associates /31 Bagus Enrico & Partners /32 QUALMS Group Limited /35

2014 All Eyes on Brazil Acquisition International talks to Cristina A. Berry and Marcelo Natale from Deloitte Brazil about the current economic situation in the country. / 14

Cendyn Acquisition of Arcaneo /8 www. ACQUISITION-INTL .com

The Maldives: Brighter than Ever Praxis Law Firm LLP explain why The Maldives is one of the most attractive investment destinations among the South-East Asian countries. / 15 Vietnam: A Land of Vast Opportunities We speak to regional experts Indochina Capital and LNT & Partners. / 16 Malta: An International Investment Hub Malta Financial Services Authority Communications Unit explain how Malta has become a global investment hub for international business. / 19

Fund Management Experts in Asia and Africa WINNER Asian Fund of Hedge Funds 2014

21/F Chuang’s Tower, 30-32 Connaught Road Central, Hong Kong Tel: +852 2253 6296 www.skyboundcapital.com

CONTENTS: April 2014

Editor ’s Comment You might have noticed that this month’s issue of Acquisition International is slightly weightier than usual. This is because we’ve also published our first ever Maximising M&A Success supplement.

CONTENTS — April 2014

When it comes to buying or selling a business a huge number of factors come into play and there is so much to consider if a potential deal is to be successful. Maximising M&A Success gives you an in-depth look into one of the more challenging and fascinating facets of running a business, while also providing some invaluable and unique insights, courtesy of some the field’s most experienced and respected names.

The supplement takes in everything from the main points to consider, whether you’re selling or buying, to how to strengthen your all-important due diligence, why people play such a massive part in successful M&A and what the M&A experts focus on to make sure a potential purchase becomes a done deal.

And, of course, there’s the magazine itself, which this month features Dealmaker of the Month, PEM Corporate Finance, who talk to us about the UK fertility services market (page 12), an insightful look at how the gaming industry has become a global phenomenon (page 44) and there’s our globetrotting 2014 Q1 Review roundup, starting on page 24.

I hope you enjoy this month’s issue.

Mark Toon, Editor editor@acquisition-intl.com

How to get in touch AI welcomes news and views from its readers.

Correspondence should be sent to; Address/ Acquisition International, Unit 10 Barton Marina, Barton Turn, Barton Under Needwood, Burton on Trent, Staffordshire, DE13 8AS. Tel/ +44 (0) 1283 712447 Email/ reception@acquisition-intl.com Website/ www.acquisition-intl.com Find us on/

@acquisition_int

2014 Q1 Review: Gas Technologies LLC (GasTechno®) GasTechno® is one of the world’s most capital efficient gas-to-liquids (GTL) technologies. Acquisition International speaks to Walter Breidenstein, CEO and founder, to find out more. /24

News: /4

12/

Dealmaker of the Month

The Latest News Stories From Around The World.

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2014: All Eyes on Brazil

15/

The Maldives: Brighter than Ever

16/

Vietnam: A Land of Vast Opportunities

19/

Malta: Your Partner in Business Success

21/

International Tax Awards

Sector Talk: /10

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Powered by Zephyr/ Bureau van Dijk.

Partnering with Cyprus: 2014’s Pipeline to Success

36/

Australia: A Global Platform for Growth

38/

China: The World’s Hot-Spot for Foreign Investment

41/

Introducing 2014’s Most Regarded Insolvency Practitioners

44/

The Gaming Industry: A Global Phenomenon

46/

Greece: A New Economy in the Making

48/

Measuring the Pulse of Africa’s Economy

50/

2014: Growth and Trends in Relocation

52/

Canada: A Resilient Globalised Economy

53/

Regional Review: Arbitration Seats: Weighing up the Pros & Cons Regulating Competition Disputes The New Developments in Belarusian Competition Law Bahamas: A Paradise for Many Reasons Cyprus: On the Road to an Economic Miracle The Road Ahead for Denmark Lithuania: The go-to Economy of 2014 Morocco: Attracting Foreign Investment in 2014 The Philippines: The Road Ahead Poland: Europe’s Growing Investment Hub Forming a Company in Singapore Uganda: the next global boom

Deal Diary: /68 Introduced

by Zephyr/ Bureau van Dijk.

PlayHard: /89 Acquisition International’s Monthly Lifestyle Review.

Maximising M&A Success: /95 Read our 16 page M&A supplement.

89/ PlayHard

Acquisition International | April 2014 |

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NEWS: from around the world

News: from around the world Appointments Leading provider of global Data Centres and Managed ICT Services and subsidiary of KDDI, Telehouse Europe has announced the appointment of current Deputy Managing Director, Hiroyuki Soshi as its new Managing Director.

Mr Soshi succeeds Hiroshi Kobayashi and will be based in London, the European headquarters.

Bringing with him a wealth of management experience from KDDI headquarters, Mr Soshi has played a central role in driving the KDDI and Telehouse Europe strategic direction since 2011. His leadership has brought success in expansions across the EMEA region in Russia, Germany and France with a strong focus on data centre business optimisation and placing the customer at the centre of the formulation and execution of Telehouse Europe’s business strategy.

Having officially started his role on the 1st April, Mr Soshi takes charge at an exciting time for Telehouse Europe. This year sees the 20th anniversary of the relationship between Telehouse Europe and the London Internet Exchange (LINX), as well as the 25th Anniversary of the London data centre campus in 2015. Mr Soshi is ideally placed to lead the future growth of Telehouse Europe and maintain its leadership in a time that will see sustained growth for the industry.

Commenting on his appointment, Mr Soshi said “I am extremely privileged to take on the role as Managing Director in such a pivotal time for Telehouse Europe. Over the past two and a half decades, we have positioned ourselves as a global leader in facilitating the growth of the Internet and digital based technologies.”

Mr Soshi continued: “I am committed to ensuring that Telehouse continues to act as a catalyst for growth by maximising innovation and customer value.”

--------------------------------------------------------------------------iWedia, a leading provider of software solutions for TV devices, has announced the appointment of Sunghoon Kim as VP Sales with a special focus on the digital TV operators market.

Located in Frankfurt, Germany, Sunghoon Kim has accumulated over 15 years of experience in selling software and services to the digital TV market. Before joining iWedia, he served several years at Alticast, where he held various senior marketing and sales positions, his last role being Vice President of Business Development.

Hans-Jürgen Désor, CEO of iWedia, said: “It is a great pleasure to welcome Sunghoon on board. His competences are recognised throughout the digital TV industry where he has established a strong professional network especially in EMEA and LATAM.” “He will be focusing on expending our footprint on the market of telcos and Pay TV operators, a market where we already have been involved in success stories - especially thanks to our approach of using Android as an OS for STB and TV sets - and that we want to develop further,” he added.

Sunghoon said: “The digital TV operators represent a strategic opportunity for iWedia and I am delighted to be joining the company to drive its growth and continue our successes in that market.”

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EY ITEM Club: Long low inflation expansion on the horizon The UK is set to experience a long period of low inflation expansion as the economic recovery moves on to a firmer footing, according to the latest quarterly forecast from EY ITEM Club.

EY ITEM Club’s Spring forecast says the UK will see growth of 2.9% this year as favourable labour market factors create “decent but unspectacular growth” underpinned by low inflation.

Consumer spending will continue to lead the recovery boosted by wage increases of 1.7% this year – overtaking forecasted inflation of 1.6%. The report predicts that earnings growth will continue to steadily pick-up as the demand for labour strengthens and skills shortages appear in some sectors.

At the same time, slowdown in the emerging markets will put downward pressure on commodity prices. The forecast predicts growth exceeding inflation on a sustained basis, after six years of falling real wages.

With inflation under control and a stronger pound, the forecast predicts that the Monetary Policy Committee (MPC) will keep interest rates on hold at 0.5% until the third quarter of 2015 – at which point rates will rise very gradually.

Peter Spencer, chief economic advisor to EY ITEM Club said: “Until now the recovery has been financed by a fall in the amount households save, but it appears to be moving to a firmer footing.

“The consumer upturn will be given a boost from real wages and rising employment, while investment is finally kicking in. We are set for a long period of low inflation as pressures from commodity prices and the labour market – traditionally the two main suspects in the UK inflation drama – remain largely absent.

“This will allow the MPC to leave interest rates on hold until after the election, helping to stimulate further investment growth and limiting household spending on mortgage payments.”

Mortgage market review keeps lid on housing market The housing market will also be dampened as caution by lenders, tighter lending criteria and an increase in house building will cool prices, preventing an unsustainable boom. The forecast predicts prices will rise by 7.4% this year and 7.2% next year, easing back to 4.2% in 2016 as the mortgage guarantee scheme ends.

Crucial to keeping the lid on the market, the report argues, will be the role of the Financial Conduct Authority (FCA). EY ITEM Club warns that the FCA must use their recently gained macro-prudential tools to ensure that the income multiples of borrowers do not become too stretched. The forecast predicts their policing of income multiples in London, which remains

NEWS: from around the world

the main constraint to purchases in the capital, will help avert a housing bubble. This will work alongside new construction orders to help prevent house prices overheating.

Spencer continues: “The housing market is not experiencing a typical debt-fuelled recovery. Gross mortgage lending has increased but this has largely been financed by an increase in repayments by existing borrowers.

New mortgage lending remains at rock bottom while Government initiatives such as the ‘Help to Buy’ (HTB) schemes will be having little impact on prices in London, where activity is fuelled by cash rather than mortgage borrowing.

“The FCA will assume crucial importance to ensure multiples do not become too stretched and that affordability is scrupulously checked. If these controls are rigorously applied this will eventually constrain London prices, particularly in hotspots like Hackney, and head off problems when interest rates rise.”

UK close to toppling Germany for highest employment in G7 While the MPC has dropped the explicit link with unemployment in its forward guidance, the report forecasts the UK will come close to meeting

the Chancellor’s target for the highest rate of employment in the G7. The forecast predicts that the employment rate will increase from 71.2% of 16 – 64s in work last year, to 73.7% in 2017. This might be enough to put the UK at the top of the G7 table, which was topped by Germany at 73.3% rate last year.

The report predicts the unemployment rate will continue its descent, falling to 6.5% by the end of the year and 6% by the end of 2015, down from 7.1% currently.

Spencer continues: “The Chancellor’s target is in sight, helped by increased labour market participation. We estimate that the labour supply will be boosted by another 700,000 over the next two years, as a result of immigration, older workers working for longer and Government reforms to move people from welfare into the workforce.

“Despite the Chancellor’s reform of the annuity system in the Budget, the economics of early retirement remain unfavourable and we expect this trend to persist. This performance might not be quite enough to put the UK at the top of the G7 league tables but it will not be far off.”

Acquisition International | April 2014 |

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| Acquisition International | April 2014

NEWS: from around the world

News: from around the world Modest trade growth anticipated for 2014 and 2015 following two-year slump World trade is expected to grow by a modest 4.7% in 2014 and at a slightly faster rate of 5.3% in 2015 according to World Trade Organization (WTO) economists.

Although the 2014 forecast of 4.7% is more than double the 2.1% increase of last year, it remains below the 20-year average of 5.3%. For the past two years, growth has averaged only 2.2%.

The sluggish pace was due to a combination of flat import demand in developed economies ( 0.2%) and moderate import growth in developing economies (4.4%). On the export side, both developed and developing economies only managed to record small, positive increases (1.5% for developed economies, 3.3% for developing economies).

“For the last two years trade growth has been sluggish. Looking ahead, if GDP forecasts hold true, we expect a broad-based but modest upturn in 2014, and further consolidation of this growth in 2015”, WTO DirectorGeneral Roberto Azevêdo said. “It’s clear that trade is going to improve as the world economy improves. But I know that just waiting for an automatic increase in trade will not be enough for WTO Members.

“We can actively support trade growth by updating the rules and reaching new trade agreements. The deal in Bali last December illustrates this.

“Concluding the Doha round would provide a strong foundation for trade in the future, and a powerful stimulus in today’s slow growth environment.

We are currently discussing new ideas and new approaches which would help us to get the job done — and to do it quickly.”

Several factors contributed to the weakness of trade and output in 2013, including the lingering impact of the EU recession, high unemployment in euro area economies (Germany being a notable exception), and uncertainty about the timing of the Federal Reserve’s winding down of its monetary stimulus in the United States. The latter contributed to financial volatility in developing economies in the second half of 2013, particularly in certain “emerging” economies with large current account imbalances.

The preliminary estimate of 2.1% for world trade growth in 2013 refers to the average of merchandise exports and imports in volume terms, i.e. adjusted to account for differences in inflation and exchange rates across countries. This figure is slightly lower than the WTO’s most recent forecast of 2.5% for 2013, issued last September. The main reason for the divergence was a stronger than expected decline in developing economies’ trade flows in the second half of last year.

For the second consecutive year, world trade has grown at roughly the same rate as world GDP (gross domestic product, a measure of countries’ economic output) at market exchange rates, rather than twice as fast, as is normally the case (see chart).

Recent business surveys and industrial production data point to a firming up of the recovery in the United States and Europe in early 2014. The gradual improvement of US employment data has allowed the Federal Reserve to proceed with its planned “tapering”, of their third round of quantitative easing (“QE3”) The outlook for the European Union has also improved, although growth there will remain uneven as long as peripheral EU economies continue to underperform core ones.

Chart1: Growth in the volume of world merchandise trade and GDP, 2005-15* Annual % change * Figures for 2013 and 2014 are projections.

Source: WTO Secretariat.

Acquisition International | April 2014 |

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NEWS: from around the world

News: from around the world Advisor Migration Projected to Grow Independent Channels through 2016 According to research from global analytics firm Cerulli Associates, advisor migration is projected to grow independent channels to 38% of asset market share through 2016.

“We anticipate the registered investment advisor and the dually registered channels are going to be the beneficiaries of advisor movement,” states Kenton Shirk, Associate Director at Cerulli.

Cerulli’s Intermediary Distribution 2013: Managing Sales Amid Industry Consolidation report examines the distribution of financial products within the U.S. The report includes advisor marketsizing, advisor product use, and asset manager sales organisations.

“Across the advisor industry, there is a strong desire for independent operation and ownership. The draw of autonomy, combined with the trend toward fee-only relationships, has enhanced the appeal of the independent channels,” Shirk explains.

To manage advisors transitioning between channels, Cerulli recommends that distributors clearly delineate ownership, empower divisional sales managers to track advisor transitions, and standardise transition hand-offs between wholesalers to ensure relationship continuity with the firm.

Acquisition International | April 2014 |

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SECTOR TALK: Powered by Zephyr/Bureau van Dijk

Sector Talk: Private Equity Private equity is off to a good start to 2014, having already notched up more than half of the total investment recorded in the final six months of last year. In the opening quarter of 2014 there were 1,067 investments worth a combined USD 105,507 million.

2013 finished on a high note in terms of private equity investment, recording the highest levels of both volume and value for a number of years, according to Zephyr, the M&A database published

by Bureau van Dijk. In H2 there were a total of 2,122 deals worth an aggregate USD 182,087 million. By volume this represents the best showing since H1 2012 (2,117 transactions), while the last time value surpassed this level was in H1 2008 (USD 212,162 million), prior to the onset of the global financial crisis. The result also represented the fourth consecutive increase by volume, rising from a base of USD 129,691 million in H2 2011.

As Q1 comes to a close we are beginning to get some kind of indication as to the way results are shaping up in the opening half of 2014. The 1,067 deals worth an aggregate USD 105,507 million posted to date represents around half of the volume recorded in the last six months of last year, while value is already well on the way to surpassing the preceding period. This figure is even more impressive given that it is fairly close to levels recorded during H2 2011 and H1 2012 and has already exceeded investment levels during the nadir of the financial crisis in 2009 and the first half

NUMBER AND AGGREGATE VALUE (MIL USD) OF PRIVATE EQUITY DEALS GLOBALLY: 2006 - 2014 YTD (as at 31 March 2014) Deal half yearly Number value (Announced of deals date)

Aggregate deal value (mil USD)

H1 2014 TD H2 2013 H1 2013 H2 2012 H1 2012 H2 2011 H1 2011 H2 2010 H1 2010 H2 2009 H1 2009 H2 2008 H1 2008 H2 2007 H1 2007 H2 2006 H1 2006

105,507 182,087 171,506 164,931 129,839 129,691 149,095 168,675 87,708 90,356 63,208 116,743 212,162 285,175 618,673 452,266 298,252

1,067 2,122 1,871 2,009 2,117 1,992 2,264 2,212 2,074 1,746 1,701 2,461 2,759 2,939 2,923 2,553 2,483

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of 2010. However, the road to recovery is proving very long, as evidenced by the USD 452,266 million worth of dealmaking recorded in the second half of 2006 and the USD 618,673 million posted in H1 2007. What is clear is that it will take some time if results are to once again reach these heights.

The largest PE-backed deal of 2014 to date involved a US target as supermarket operator Safeway announced it is to be acquired by Cerberus, through its AB Acquisition vehicle, for USD 11,185 million. That deal was announced earlier this month and is expected to complete during the fourth quarter of this year, although the target’s board is currently being investigated in relation to potential breaches in fiduciary duties linked with the transaction. The year’s second largest deal to date is worth around half as much, as Mayon Investments committed to invest USD 5,667 million in exchange for a 25.0 per cent stake in Hong Kong-based health and beauty products retailer AS Watson & Company. Closing of that deal is expected during April. Other countries being targeted in Q1’s top 10 private equity transactions include the UK, Denmark and Cayman Islands.

The region which has received the most private equity investment in 2014 to date is North America, which has been targeted in transactions with an aggregate value of USD 51,758 million.

This is perhaps unsurprising given that six of Q1’s top ten transactions had US targets, including the year’s most valuable deal so far, worth USD 11,185 million. In spite of the high level of investment, North America could only place second by volume with 393 deals, being usurped by Western Europe on 416 transactions. The latter was the second most valuable region, bringing in combined investment of USD 26,446 million between January and the end of March.

In conclusion, 2014 has made a promising start in terms of private equity investment. A few large deals have undoubtedly pushed values up, and it will only take a few more if results are to surpass those recorded in H2 2013 by the end of June. It is difficult to predict how PE firms’ appetites will change over the coming months, and although there is a long road ahead, continued investment will help push the industry back towards the heights it achieved prior to the onset of the global financial crisis in 2008.

NUMBER AND AGGREGATE VALUE (MIL USD) OF PRIVATE EQUITY DEALS GLOBALLY BY DEAL TYPE: 2006 - 2014 to date (as at 31 March 2014) Deal type

Number of deals

Aggregate deal value (mil USD)

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

12,373 21,512 1,928 1,248 173 66 4 7

2,457,378 623,437 293,185 61,563 801 565 0 0

AGGREGATE VALUE (MIL USD) OF PRIVATE EQUITY DEALS BY REGION: 2006 - 2014 YTD (as at 31 March 2014) World region (target) North America West Europe Far East & Central Asia S. & Central America Oceania Africa Middle East East Europe

2006

2007

2008

2009

2010

2011

2012

2013

2014

390,122 512,667 135,258 58,206 113,835 128,381 142,815 168,060 51,758 287,096 299,936 136,226 55,703 98,246 26,853 33,014 23,991 25,520 15,361

79,723 25,745

87,686 24,273

117,335 26,446 18,788 13,562

11,620

25,652

10,645

2,917

12,399

18,901

24,325

16,587

7,782

14,672 4,406 960 13,482

10,490 9,331 3,259 10,741

4,049 2,069 2,845 13,459

4,391 832 1,160 8,626

7,049 776 1,429 5,397

10,451 2,820 2,707 8,932

4,816 1,747 2,221 3,799

4,611 8,781 1,585 15,301

4,034 720 554 416

TSIBANOULIS & PARTNERS was formed in 2002 through the merger of Tsibanoulis & Associates (est. 1996) and Bailas & Partners (est.1972). We have joined forces with a common target to respond to ever growing legal needs of the business sector in the most effective way. We are thus able to use the exceptional talent and expertise of our outstanding professionals to ensure responsiveness and innovation in providing legal advice. We work and advise on all business related legal issues, having the advantage of cross-border international transactions experience. We are a law firm of 8 partners, 11 full time associates, 2 of counsel and 6 trainees. We have worked with major corporations, large Greek and foreign banks and investment firms, the Greek State and many public authorities providing ground breaking advice, clear legal solutions within a complex environment. Our target is to act before and go beyond our clients’ needs by helping them shape their goals in a realistic yet imaginative way. Valuing the interface between law, public policy and business, we have built a practice to match regulatory requirements, transparency concerns and financial targets.

A Greek law firm with extensive expertise, an exceptional reputation and international presence.

Contacts: Evy Kyttari, Partner Telephone: + 30 21 036 75 100 Email: e.kyttari@tsibanoulis.gr Gerry Kounadis, Associate Telephone: + 30 21 036 75 100 Email: g.kounadis@tsibanoulis.gr

www.tsibanoulis.gr Š Tsibanoulis & Partners 2010 Email: info@tsibanoulis.gr Omirou str. 18, 106 72 Athens, Greece Tel.: +30 21 036 75 100 Fax: +30 21 036 75 164

Acquisition International | April 2014 |

Dealmaker of the Month

Lake Falconer is Partner at PEM Corporate Finance, a Cambridge-based corporate finance firm. Recently, PEMCF assisted in a transaction within the fertility services sector, with fantastic results.

Fact File

Cambridge-based PEM Corporate Finance (PEMCF) advises owner-managed businesses on transactions ranging from M&A and company sales to management buyouts and private equity fund raising.

PEMCF enjoys a close and long-standing relationship with Bourn Biosciences, having advised on the original management buyout of the business from Serono, and its subsequent acquisition of ISIS Fertility in 2009.

Backed by Peters Elworthy & Moore (PEM), PEMCF enjoys access to its sister company’s tax expertise and resources, while having a flat structure that enables it to deliver personal senior level attention to clients.

“It has been a pleasure to work with Mike Macnamee (Chief Executive of Bourn Hall) and his team once again, and to aid the growth of this well-renowned company,” says Falconer.

The company also has global reach as a member of Kreston International, the 13th largest accounting network in the world, which covers 108 countries and 186 firms.

“We managed the fund raising process from start to finish, helping the company to formulate its growth strategy, and introducing a carefully selected number of potential private equity investors appropriate to the deal size and Bourn Bioscience’s aspirations.”

Recently, PEMCF acted as lead advisors to Bourn Bioscience Ltd on the raising of equity finance to support the company’s plans for geographic expansion. Mobeus Equity Partners LLP invested a sum of £3.5m for a minority shareholding, with a further commitment to invest significant follow-on finance.

Falconer explains that there was a strong interest in this transaction from a number of potential investors, and some other recent private equity activity in the sector.

Lake Falconer, Partner at PEMCF, led the team for this transaction. Falconer has more than 20 years of senior level experience in corporate finance, as well as in venture capital.

Company: PEM Corporate Finance Name: Lake Falconer Email: lake@pemcf.com Web: www.pemcf.com Address: Salisbury House, Station Road, Cambridge, CB1 2LA Telephone: 01223 728 222

After qualifying as a Chartered Accountant, Falconer spent six years in venture capital with 3i plc. He led transactions and managed a portfolio of investments in a variety of industries including technology and life sciences. As a corporate finance adviser he has led transactions including management buy-outs, corporate disposals and acquisitions.

Here he explains more about Bourn Bioscience, its rationale behind the transaction and his firm’s involvement.

“Bourn Biosciences Ltd is the parent company of the world’s first IVF clinic, Bourn Hall,” he states. “The clinic was founded more than 30 years ago by the IVF pioneers whose work led to the birth of the first test-tube baby in 1978. Today, Bourn Hall is the largest independent fertility services provider in the East of England, boasting 120 staff and three full service IVF clinics.”

The UK market for fertility services has grown significantly in recent years, driven by increasing acceptance and awareness of IVF procedures, favourable demographics and improved success rates. Bourn Hall Clinic is looking to continue expanding its geographic footprint, leveraging its already strong and respected brand and reputation.

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“As such we were able to interact with a controlled number of potential investors and work with the team to select the right investment partner for Bourn Hall.”

Falconer believes that PEMCF’s personal approach and industry experience played vital roles in the smooth completion of the deal.

“All our transaction work is based on gaining a comprehensive understanding of our clients, and in this case we had the benefit of an existing long relationship with Bourn Hall.

“The depth of our understanding of the company, coupled with our teams’ successful and sustained track record of raising finance for SME transactions, allowed us to support Bourn Hall throughout the process and achieve the funding it needed.”

Regarding the future of Bourn Hall, Falconer predicts bigger and better things to come.

“Over the last four years, Bourn Hall has established a network of new clinics and satellites to provide its patients with personalised and accessible treatment. The funding will support the company in its plans, which include acquisition and partnership with existing IVF providers and the development of several new clinics by 2015.”

YSAKAR LEGAL PRACTITIONERS CHIKWA CHIBWE: LLB (HON) WOLV. ENG

Zambia’s Number One Legal Practitioners

Email: chikwac@gmail.com Telephone: +260 211 262345 Cell: +260 966 668 287

SECTOR SPOTLIGHT: 2014: All Eyes on Brazil

2014: All Eyes on Brazil

Cristina A. Berry is a Tax Leader at Deloitte Brazil, and Marcelo Natale International Tax Leader at Deloitte Brazil. They talk to AI magazine about the current economic situation in the country.

---------------------------------------------------------------------Deloitte is present in Brazil for more than 100 years with 12 offices in major economic centres’ of the country. Deloitte’s Tax and Outsourcing functions have more than 1,500 professionals, covering wide spectrum of expertise: corporate taxes, indirect taxes, transfer pricing, R&D, tax incentives, international tax, customs, tax technology, expatriates, and labour. More than specialized knowledge, Deloitte Tax combines these capabilities with robust industry focus in order to deliver business oriented solutions.

In all areas the international cooperation with our global network allows permanent access to resources and continuous development of our professionals through international secondments. Deloitte University, based in Westlake, Texas, is a key part of career development for our professionals, expanding horizons and providing deep technical content in a cooperative environment.

Beyond pure tax services, our multiple skills in audit, risk services, financial advisory, outsourcing

Company: Deloitte Touche Tohmatsu Consultores Ltda.

Name: Cristina Berry / Marcelo Natale Email: caberry@deloitte.com mnatale@deloitte.com Web: www.deloitte.com.br Address: R. Henri Dunant, 1383 – São Paulo – SP – Brazil – 04709-111 Telephone: +55.11.5186.1000

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and consulting leverage our tax practice to deliver combined services that would not be possible to an isolated tax provider. Finally, our size provides the desirable scale to gain practical experience from all type of businesses giving us unique credentials in the market place.

Cristina and Marcelo describe the current business environment in Brazil.

“Besides some concerns, Brazil is still attracting new and continuous investments in local production and new comers represent important demand for our specialised work such as business modelling, general tax assistance on start-up, compliance and consulting services, etc. Although the economy is not growing at the desirable speed, unemployment rate is historically low, creating an important internal market. As this market expands and matures, more sophisticated products gain scale, attracting all the supply chain involved. We expect a low but continuous growth for 2014 and 2015. Businesses will be challenged to control costs, gain efficiency and manage the complex and challenging tax environment in Brazil.”

Brazil alone represents more than 33% of the Latin America economy with endless possibilities.

“Differently from Argentina and Venezuela, our fundamentals in terms of democracy, institutions and capital friendly has never jeopardized the foreign investment and remittances from Brazil are not restricted. The size of internal economy, access to all type of industries and skilled professionals allows Brazil to assume a natural leadership in the region and it is very common to see among our clients that the regional headquarter is based in Brazil. Although Chile is well-known for its economic freedom, Brazil represents a unique opportunity that faces no parallel in other Latin America countries.”

There are certain sectors which Cristina and Marcelo think the greatest opportunities for investors lie, and they embellish: “Generally speaking, all sectors

involved with consumer products to internal market have benefit with new investment. Also, natural resources (mining, Oil & Gas) and agribusiness have put Brazil definitively in the global map of investments.”

“Many economists suggest relevant investment in infrastructure to overcome bottle necks in energy and transportation,” they explain on how Brazil plan to maintain its growth. “The low unemployment rate will maintain the economic growth but only more structural investments will create the conditions for a more efficient and competitive economy.”

There are, however, challenges which the country has faced, and indeed, continues to face today, including poor public services, insufficient infrastructure, high and complex taxation, which Cristina and Marcelo state are typical concerns associated to Brazil´s capability to expand.

“These challenges can be met with attraction of international capital to important long term projects in several different sectors and could address most of the present issues faced, but in order to achieve that an important change on how Brazilian government manages the regulatory side would be necessary.”

The FIFA World Cup is due to take place in Brazil in June of this year and the pair believe it will have a positive impact on business in the country.

“Due to customs barriers to foreign products, expansion in internal consume associated to leisure, transportation, food and beverage, etc. will create a good momentum for companies established in Brazil involved in the above business sectors,” they explain.

“As Brazil continues to develop and assume a more active role in the world, a permanent presence in Brazil is key for most companies in order to not lose momentum and be prepared for the next steps.

Deloitte Brazil is prepared to offer all type of tax solutions for companies willing to do business in the country.”

SECTOR SPOTLIGHT: The Maldives: Brighter than Ever

The Maldives: Brighter than Ever

Praxis, along with Theoria and Poiesis, is one of three basic activities of Man – Aristotle.

Praxis is the relationship between theory and action.

Praxis is the strategic and organised effort to find solutions.

Praxis Law Firm LLP is a legal practice committed to and firmly driven by these ideas.

Areas of Expertise Our experience and proficiency in Foreign Investments, Corporate, Tourism & Real Estate, Banking & Finance, Public & Regulatory Law is widely acclaimed. Praxis maintains an active Pro Bono service. We offer a service that is professional and personalized. We are driven towards results, we aim to reduce uncertainty, and get through to the solution you want. Following are our primary areas of practice: Tourism & Real Estate Public & Regulatory Banking & Finance Tax Litigation Telecommunications & Media Foreign Investment Employment & Benefits Pro Bono Lawyers The key practitioners at Praxis Law Firm LLP are proven lawyers with established track records, and considered preeminent authorities in their respective areas of expertise. Praxis brings together a crucial mix of essential competencies required to offer a comprehensive, one-stop legal service, at consistently high standards.

We value the wisdom of time-honoured tradition, yet we innovate when established practice stands in the way. We try to understand the business of our clients through close professional relationships. We have the benefit not only of being proficient in the Law but also of extensive knowledge in the various fields and industries related to the legal practice. Thus we are able to offer sound and reliable legal advice.

The partners at Praxis approach legal issues from a broad range of distinct perspectives. Our comprehensive and systematic approach to problemsolving is especially favoured by clients. We are able to

offer you a number of rigorously analysed and feasible options, before helping you decide on the best course of action for you. With our diverse areas of expertise, we are able to work together and pool our collective resources to offer you guaranteed and seamless solutions.

Ismail Yasir, attorney-at-law LLB (Hons) (UWE Bristol) Ismail.yasir@praxislawfirm.com Yasir has worked at the Ministry of Tourism for close to 15 years, and is the principal architect behind the main laws and regulations governing the tourism industry today. Yasir was serving as Deputy Minister of Tourism when he left public service in February 2012 to found Praxis Law Firm. Yasir is routinely instructed by leading businesses and investors in commercial and corporate work. Yasir is a leading individual in banking & finance, mergers & acquisitions, tax, and securities law.

Yasir is presently Managing Partner at Praxis Law Firm LLP. Abdulla Muizzu, Attorney-at-law, LLB (Hons) (Middlesex), abdulla.muizzu@praxislawfirm.com Abdulla is vastly experienced in public and regulatory law issues having worked for more than 18 years in the government, mainly as a lawyer at the Attorney General’s Office. Abdulla served as Attorney General of the Maldives from March 2011 to February 2012, during an important time of change in a number of critical areas such as taxation, decentralisation, privatisation, and democratisation & human rights. He has also held the posts of Deputy Attorney General, Solicitor General, and Vice President of Judicial Services Commission.

Abdulla was appointed as a member of the Law Commission of Maldives in 2002, and was involved in drafting legislation for the government. He carries with him years of experience at the highest level and a sizeable network of key professional and industry relationships.

Mohamed Shafaz Wajeeh, attorney-at-law, LLB (Hons) (Warwick), MA (Warwick) shafaz@praxislawfirm.com Shafaz has experience working at the Ministry of Foreign Affairs and was chief legal counsel at the Human Rights Commission of the Maldives until 2010, when he left public service to pursue fulltime practice.

Shafaz has experience in public law & regulatory affairs, and is a leading authority on issues of human rights law in the Maldives. Shafaz continues to maintain

an active involvement in the drafting and reviewing of a number of important rights-related legislation.

Ahmed Abdulla Afeef, attorney-at-law, LLB (Hons) (AlAzhar); ahmed@praxislawfirm.com Ahmed is a successful and experienced litigation lawyer, and is well versed in concepts of Islamic Shari’ah, that are essential to effective litigation in the Maldives. Ahmed is a leading authority on the 2008 Constitution, and is regularly involved in high profile court cases and instructed by the most important public figures and political parties in the Maldives. The press and media routinely ask Ahmed for comment on the most compelling issues of national interest in constitutional and public law. Ahmed has amongst his clients some of the largest businesses in the Maldives and has considerable experience in handling corporate and commercial law issues.

Ahmed is active in a number of NGOs, and maintains an active public life in promoting the legal profession and issues of justice and equality.

Ahmed Ahid Rasheed, attorney-at-law, LLB (Hons) (Middlesex); Ahid.rasheed@praxislawfirm.com Ahid specialises in Intellectual Property law and is able to offer in-depth advise on a range of related issues such as commercial intellectual property, licensing and distribution issues. Ahid was a legal officer at the Public Complaints Bureau, and later reconstituted AntiCorruption Commission for close to 10 years.

Ahid has a varied range of engagements to supplement law practice. Ahid is President and founder of the Science Society of the Maldives, he has been a lecturer for secondary school teaches at the Mandhu College, and has travelled extensively within Southeast Asia and India.

Firm: PRAXIS Law Firm LLP Address: 4th Floor, Hasowa Building, No. 43, Boduthakurufaanu Magu, Male’ 20094, Maldives E-mail: info@praxislawfirm.com Website: www.praxislawfirm.com Phone: +960 333 0688 Fax: +960 333 0689

Acquisition International | April 2014 | 15

SECTOR SPOTLIGHT: A Land of Vast Opportunities…

A Land of Vast Opportunities: Vietnam Sustainable Growth Is Attracting More Foreign Investors

Vietnam has had its ups and downs as an emerging market investment destination but is quietly coming back into vogue with international investors. The allure of strong macroeconomic fundamentals, large population, expanding middle class and stable sociopolitical environment have renewed investor interest.

Investment regulations have also become more accommodating to foreign corporations and financial investors while the country’s economic and political stability have set the stage for secular growth.

After a period of macroeconomic instability from 2007 to 2011—years marked by high inflation and rapid currency devaluation—the Vietnamese government shifted from high growth to macroeconomic stability starting in 2012. To stabilize the economy, the government implemented tighter monetary and fiscal policies. In particular, the government reined in loose credit, which was growing at over 30% per annum from 2008 to 2010 but was down to 12.5% in 2013. Although tighter credit policies led GDP growth to slow from 8.5% in 2007 to 5.4% in 2013, inflation was tamed dropping from 22% in June 2011 to less than 5% in February 2014. Lower inflation has allowed the government to cut interest rates by a total of 700 bps and has positioned the VND to be the most stable currency in the region with only a 1% devaluation since February 2012.

Asia’s Fastest Growing Consumer class One of Vietnam’s greatest benefits is its “Power of

16 | Acquisition International | April 2014

One”: one common language, one primary religion, one major political party, one contiguous landmass.

This homogeneity has allowed for political and social stability—an incredible differentiation vis-à-vis the turmoil present in other Asian countries (e.g.

Thailand, the Philippines, Cambodia and Myanmar).

investor group, when combining direct investment with ODA funds provided by the government. This trend will largely continue as Japanese corporations expand their footprint in ASEAN and move their factories out of China and into lower-cost production bases.

The real excitement however is in the expanding consumer class which puts a spotlight on all consumer-oriented sectors. The Holy Grail for any emerging market is the emergence of a buoyant consumer class and according to The Boston Consulting Group, Vietnam’s middle and affluent class is the fastest-growing in Asia with expectations that it will double in size by 2020.

Positive FDI inflows into export-oriented sectors have also led to higher export turnover, which grew 15.4% in 2013. After running a trade deficit for 20 years, Vietnam has had a trade surplus over the past two.

FDI Inflows are Sticky and the Export Base is Expanding Unlike other emerging markets that were awash with hot money from QE3—and subsequently hit at the first sign of tapering—Vietnam benefits from FDI which is relatively more sticky and less transient. Total FDI in 2013 amounted to US$21.6 billion, a 55% increase year-over-year, with actual disbursements reaching US$11.5 billion. Japan, South Korea and Singapore are the primary sources of FDI in Vietnam, with expectations that investments from other ASEAN countries will pick-up in the mediumterm.

The Japanese have always had a long-term love affair with Vietnam and by-in-large are the largest foreign

In addition to accelerating export values, Vietnam has moved up the export chain, where smartphones and computer parts were the #1 and #3 export items, respectively, in 2013. Samsung now ships 25% of all their smartphones worldwide from Vietnam with plans to increase to 40% in the next 12 to 18 months, and Intel’s largest chip plant in the world is located outside of Ho Chi Minh City.

Investor Trends in Public Securities and M&A The Vietnam stock market was the second best performing in Asia in 2013 with gains of 26% on a total return basis. Despite the gains, Vietnam still has one of the cheapest valuations in the region with a 2014 PE ratio of 10.5x and one of the highest growth rates with Earnings Per Share Growth of over 15%.

The story is even more compelling beyond the blue chips, as stocks in the $50-250 million market cap range have PEs of 7-8x and dividends in the high

SECTOR SPOTLIGHT: A Land of Vast Opportunities… single digits. International investors have taken notice as foreign net buying was up 66% in 2013 to US$260 million and has already reached $115 million in the first two months of 2014.

Outside of retail and fund investors, strategic investors have also sought to secure a foothold in the market. Notable private investments in public equities have included Chilean CFR International’s 46% acquisition of Domesco, a local pharmaceutical player; Japan-based Ezaki Glico Co’s 10% stake in Kinh Do Corporation, the leading confectionary company in Vietnam; and Thai-based SCG’s 20% acquisition of Binh Minh Plastics.

There has also been a renewed interest from private equity players seeking to allocate capital to the market. The biggest deals in 2013 include TPG’s US$50 million investment into Masan Agriculture and the US$200 million investment from a Warburg Pincus-led consortium into Vingroup’s retail real estate platform.

Total deal volume in 2013 reached more than 25 noteworthy transactions, which is relatively on par with 2012. However, the total value of deals dropped to US$1.6 billion last year. 2012 will be recognized as a banner year given the handful of mega-deals executed in the Oil & Gas and banking sectors, resulting in deal flow valued at more than US$3.5 billion.

Identifying Opportunities Remains a Key Challenge While macroeconomic stability has neutralized certain country-level risks (e.g. currency depreciation), we are still cognizant of the unique challenges that Vietnam presents foreign investors.

It is still very much an opaque market and identifying suitable investments and achieving commercial success will require rigorous diligence starting with the screening process.

Partner selection remains essential for all investors when approaching the market and is the key for mitigating risks in Vietnam. With Indochina Capital’s primary focus on Vietnam and multi-asset capabilities, we are well positioned to help foreign investors navigate the risks and identify the right opportunities.

#

Buyer

Deal Size (US$M) $470

Target

Sector

1 2 3 4 5

Vietnam Infrastructure and Property Development Group Warburg Pincus (consortium) Kohlberg Kravis Roberts Chandler Corporation Lotte

Vincom A Centre

Real Estate

$200 $200 $99 $63

Vincom Retail Masan Consumer Hoan My Corporation Legend Hotel

Real Estate Consumer Healthcare Leisure

6 7

Mapletree

$53

CentrePoint Office

Real Estate

Sembcorp Utilities

$51

Phu My 3 BOT Power

Energy, Utilities

8

Texas Pacific Group

$50

Masan Agriculture

Agriculture

9

Prestige Sports Cards (HK)

$47

Hap Seng Star (Vietnam)

Automotive

10 EXS Capital

$37

Son Kim Land

Real Estate

11

$33

Thai An Vietnam

Business Services

12 Masan Consumer Corporation

$25

Vinh Hao Mineral

Consumer

13 En Japan

$22

Navigos Group

Business Services

14 White Horse Berhad

$21

White Horse Ceramic

Construction

15 Minor International

$16

Life Heritage Resorts

Leisure

16 Manila Water

$15

SII

Utilities

17 Masan Consumer Corporation

$13

Phu Yen Beer & Beverage Co.

Consumer

18 Unilever

$10

Tea Plantation

Agriculture

19 Kinh Do

Undisclosed

Sheraton Nha Trang

Real Estate

20 NTUC FairPrice

Undisclosed

Co.opXtra

Consumer Retail

21 Navis Capital

Undisclosed

Godaco

Seafood

22 UPS

Undisclosed

VNPost Express

Business Services

23 CDH Investments

Undisclosed

Mobile World

Consumer Electronics

24 HD Bank

Undisclosed

Société Générale Viet Finance

Consumer Finance

25 Sumitomo Corporation

Undisclosed

Tiki Corporation

E-Commerce

BJC International

Source: Mergermarket and Indochina Capital Value (US$M)

Volume

2013 Deal Value

2008

$498.30

14

Amt of Identified Deals

$1,423.80

2009 2010 2011 2012

$762.90 $2,225.40 $2,054.40 $3,509.60

16 12 14 27

Estimated for Undisclosed & Unidentifed deals Total Deal Value 2013

$200.00

2013

$1,633.80

25

$1,623.80

Source: Mergermarket and Indochina Capital

M&A Deal Volume in Vietnam $4,000

Value (US$M)

Volume

30

$3,510

$3,500

25

$3,000 $2,500

$2,225

$2,000 Company: Indochina Capital Web: www.indochinacapital.com Name: Tony Diep, Managing Director E Mail: tony.diep@indochinacapital.com Telephone: +84 43 930 6399 Name: Hawkins Pham, Head of Advisory E Mail: hawkins.pham@indochinacapital.com Telephone: +84 83 910 4855

20 $2,054 $1,634

$1,500

10

$1,000 $500 $-

15

$498

2008

$763 5

2009

2010

2011

2012

2013

0

Acquisition International | April 2014 | 17

SECTOR SPOTLIGHT: A Land of Vast Opportunities…

After a decade of rapid development (1997-2007), Vietnam stuttered through growing pains in 2008, facing stark challenges to maintain its high growth rate. Already ensnarled in its own internal economic problems at the time, Vietnam was also swept into the global financial crisis whirlwind that further exasperated its economic woes. Mr. Binh Tran and Mr. Huy Do of LNT & Partners consider Vietnam’s bright and promising future as a land of vast opportunity for foreign investment.

The Vietnam government stayed the course and has turned the tide as economic data from 2012 and 2013 indicate Vietnam’s economy is firmly in recovery, with inflation rates in single digits for the past two years, compared to over 20% in 2008. While challenges remain, the convergence of several favourable factors may be a prelude to a new stage of sustained growth for Vietnam.

banking standards are strong signs of sustained macroeconomic health.

Vietnam has generated worldwide interest and investment before. However, it has struggled to sustain such interest, expanding magnificently for a number of years and then faltering miserably. A number of factors indicate that Vietnam is poised to break away from this dreaded cycle.

The government has already allowed foreigners to increase their stake from 15% to 20% in Vietnamese financial institutions and it is expected that the current 49% cap for other sectors will increase to 60%. Experts agree that many Vietnamese stocks are undervalued relative to traditional valuation metrics.

Deeper integration into the world economy: Unlike previous periods of economic growth, this new period offers a much more open Vietnam. Under its WTO commitments, Vietnam opened almost all its service sectors to foreign investors on January 11, 2014.

China’s territorial disputes with its neighbors and higher labor costs are causing many to question the viability of a China +1 strategy. Instead many companies are opting to establish production facilities in other Asian countries and Vietnam is on the shortlist of possible destinations.

Since joining the WTO in 2007, Vietnam has entered into many other multilateral and bilateral trade agreements, creating more preferential conditions for foreign investors with one being the Trans-Pacific Partnership (TPP). Expected to finalize this year, it opens a new trade zone which includes superpowers, the US and Japan. A significant by-product of the interdependence generated by these treaties is the adoption and propagation of international business practices.

A young and large consumer market: Vietnam’s population has grown steadily, now reaching 92m people with 60% between 16 and 34 years old. This pool of young labourers is noteworthy for businesses in industries employing a large labour force. Unskilled workers in Vietnam earn $100-$150/month compared with their Chinese counterparts, who earn $300/month.

Reform, reduction and equitization of SOEs: Since 1990, the number of state-owned enterprises (SOEs) has been dramatically reduced from 12,000 to just over 1,000, with plans to equitize an additional 500 SOEs by 2020.

Vietnam plans to reduce its ownership share in four of the six state-owned banks in the next two years.

Vietnam’s stock market was one of the fastest growing worldwide exchanges in 2013 and as of January 2014, it continues to be one of top two performing, with 2015 looking positive, as the removal of foreign ownership restrictions continue to power the upward surge.

The confluence of the above factors presents a unique window for investors to engage (or re-engage) with Vietnam at a relatively early stage, especially with respect to markets that have just been opened or expanded to allow greater foreign investment and holdings.

We spotlight the following opportunities.

Financial markets under reform and more open: Vietnam has reduced the number of authorized licensed banks since the sector overheated, resulting in non-performing loans (NPLs), forced closures and/or acquisitions. The formation of the Vietnam Asset Management Company is expected to rescue close to $2bn in NPLs.

Agricultural production: As a tropical country, Vietnam has a natural competitive advantage in producing agricultural products, and is among the top three global exporters of cashew nuts, pepper, rice and coffee. With the TPP, investors are expected to recognize the long term value of investing in this sector as Vietnam is effectively the only country in the region to be a major agricultural exporter.

Vietnam has also committed to implementing Basel II capital requirements by 2015 and a more active state bank, and further implementation of international

Banking services: Commercial and retail banking requires a strong banking system, which in turn requires a large infusion of capital to upgrade systems, operations and

18 | Acquisition International | April 2014

branches. The recent loosening of limitations on foreign holdings in financial institutions will continue to drive interest in this sector.

Garment and textile manufacturing: The 12 countries involved in the TPP negotiations account for 40% of global GDP and 30% of global trade, meaning Vietnam will be able to export significantly more of its goods to countries like the US without any tariffs, making them much more competitive. This is especially true in the garments and textiles industry, where growth is expected to jump from 12-13% to 15-20%, reaching $20bn in 2017 and projected to surge to $50bn by 2025.

Electronics manufacturing: Vietnam’s large supply of low wage workers and favourable tax incentives continue to drive electronic manufacturing, with a growing number of foreign companies assembling or manufacturing electronic products in Vietnam. Electronic exports surpassed exports in garments and textiles in 2012 and by September 2013, exports of mobile phones and accessories soared to $13.39bn - an astounding 80% rise compared to the year before.

Real estate: The past few years have seen Vietnam’s real estate market drop precipitously with many commercial and residential projects abandoned or stalled. Prices continued to drop in 2013. However the construction sector is now on an upward trajectory with a growth rate of 5.3% in 2013 and a forecast of 5.8% in 2014.

Liquidity is improving, with more buyers and loan valuations on the rise and market report predictions anticipating that a steady recovery is already underway.

In short conclusion, Mr. Tran and Mr. Do believe opportunities abound in Vietnam, created by its own efforts to reform and open its economy, coupled with external and fortuitous geopolitically favourable conditions that make Vietnam a very attractive destination for doing business in the foreseeable future.

LNT & Partners Company: LNT & Partners Name: Mr. Binh Tran and Mr. Huy Do Address: Vietnam

SECTOR SPOTLIGHT: Malta: Your Partner in Business Success

Malta: Your Partner in Business Success Keith Zahra is a Manager at the Malta Financial Services Authority Communications Unit. He explains how Malta has become a global investment hub for international business.

Investment decisions are a critical phase to any business. In its millennial history, Malta has always played a strategic role due to its location right at the heart of the Mediterranean. The more recent past, since independence in 1964, has seen the country investing in a well-educated labour force, good governance standards and strategic geographic position, to put itself on the international investment map. Malta is once again inviting you to be part of its success.

Malta’s long-term vision is based on the potential of high value-added sectors in its economy which can fully exploit its investment attractiveness and competitive advantages. The financial services sector has been consistently expanding by around 25% in recent years and direct intermediation today contributes 8% to the GDP of Malta.

Why Malta?

Malta became a Member State of the European Union in 2004 and consequently benefits from the harmonisation of EU financial services regulation and from the single market passporting rights under freedom of services and freedom of establishment.

Malta became a member of the European Monetary Union in 2008 adopting the Euro as the currency, which served as strong anchor of stability throughout the past, turbulent years.

Malta has gained a reputation for a robust regulatory regime (without being unduly prescriptive) with a highly approachable regulatory authority. It has been internationally recognised that the Maltese regulations provide a secure and stable framework for prudential supervision, consumer protection, market surveillance and prevention of money laundering.

These unique selling points did not go by unnoticed –the World Economic Forum Competitiveness Report 2013-2014 ranked Malta amongst the top 20 best financial jurisdictions in terms of the soundness of its banking system, the strength of auditing and reporting standards and the regulation of securities exchanges.

In 2013, Malta was voted as the best fund domicile in Europe.

However, strong regulation does not mean that there is no room for innovation. Over the past few years, new legislation has been enacted to offer new exciting opportunities. As an example, the funds industry for has moved move from fund registration services into fund administration, fund management and custody; the insurance sector is expanding in the world of captives and insurance management, while new legislation has seen the growth of business in retirement scheme administration.

Over the past years, 120 international investment services companies mainly from the United Kingdom and Switzerland have chosen Malta as their ideal investment location. All investment companies have to be Markets in Financial Instruments Directive [MiFID] compliant and can consequently passport their services to other Member States. In July 2013, Malta was the first Member State to transpose the Alternative Investment Managers Directive [”AIFMD”] which essentially allows hedge funds to be passported within the EU. Malta has been very proactive at EU level in the preparation of this Directive and has attracted a lot of attention due to the fact that it has disapplied the remuneration policy for Third Country managers.

Tailored to your needs The Malta regulatory framework is both robust and adaptable, that allows promoters to innovate and to develop new products to meet the changing needs of the industry. This flexible, proactive, transparent and regular contact with the regulator is very much appreciated by the financial services industry. The Malta Financial Service Authority, Malta’s unique regulator, works to fixed time lines agreed with each individual applicant. It is the policy of the MFSA that all regulators meet directly with operators to discuss their requirements. Operators have generally shown satisfaction with Malta’s approach which is based on emphasis on Disclosure; reliance on Fit and Proper Status of Directors, Senior Management and Service Providers; avoidance of Prescriptive Regulation to enable flexibility for promoters. At the same time, licensing is very rapid compared to other jurisdictions.

Taxation Malta follows an imputation system of taxation agreed with the EU in 2008 under State Aid and Code of Conduct. In 2008, the G20 placed Malta on the OECD’s white list. Malta exchanges information under the EU Savings Directive and applies the OECD clauses

on exchange of information in the Double Tax Treaties.

In 2012, Malta signed the OECD Multilateral Tax Exchange Information Agreement.

Investment in the Human Asset Malta has all the necessary infrastructure in place for the continued expansion of the finance centre. It has long recognised the important of human resources as our principal asset base, and consequently invests substantially in its education and training. The MFSA has set up an Education Consultation Council composed of all finance industry training associations to co-ordinate the training and ensure that the training satisfies the competencies required by the regulator.

Newly licensed companies have no difficulty in recruiting locally qualified staff. Maltese accountants are trained under IFRS, which Malta adopted in 1998 well before other Member States.

There are currently 10,000 employees in the financial services sector. However, in order to keep abreast of developments, Malta introduced the Highly Qualified Persons Program allowing companies to import certain skills such as actuaries and investment managers.

These persons can be employed for periods of five years and pay a flat rate of 15% tax.

In conclusion Malta has a lot to offer to the international investor.

The best way to get to know the place is to visit and Malta is well-connected with direct flights to and from Europe’s major capitals. Visiting Malta gives opportunity to visit some of its historical and cultural gems, while learning more about how it can be a partner to your business success.

Company: Malta Financial Services Authority Communications Unit Email: communications@mfsa.com.mt Web: www.mfsa.com.mt Address: Notabile Road, Attard BKR 3000, Malta Telephone: +356 21441155 Direct: +356 25485386 Fax: +356 21441189

Acquisition International | April 2014 | 19

www.LNTpartners.com LNT & PARTNERS (“LNT”) is a leading full-service independently ranked local law firm in Vietnam with offices in Ho Chi Minh City, Hanoi, Hong Kong and San Francisco. The firm is among Vietnam’s most prominent, representing a wide range of multinational and domestic clients, including Fortune Global 500 companies as well as well known Vietnamese listed companies on a variety of business and investment matters.

LNT has set a high standard for providing innovative and effective legal services. Through its continued success in negotiating complex deals and resolving high-stakes disputes, the Firm is widely recognized for its legal prowess in both transactional and litigation matters.

The core team at LNT co-founded a local law firm in 2006, which quickly gained recognition in Vietnam and two short years later joined the Allen Gledhill (Singapore) Zaid Ibrahim (Malaysia) Alliance to create AGZI LCT in 2008, the first joint venture law firm in Vietnam.

AGZI LCT localized in 2009, changing its name to LNT & Partners in 2013 following the expansion and combination with Kirin Law International, a U.S. California-based law firm.

We maintain a highly-qualified team of professionals who are experts in their field. Together, we bring a diversity of legal and business experience from public to private practice. Our team can advise on Vietnamese, American, and Japanese law. We are committed to creating pragmatic solutions that bridge the gap between the law and commercial reality. Our lawyers have received accolades from and have been recognized by leading legal publications, including Legal 500, IFLR1000, Chambers Global, AsiaLaw and PLC. Key contact: Ms. Quyen Hoang, email: Quyen.hoang@LNTpartners.com Mr.| Huy Do, email: Huy.do@LNTpartners.com Acquisition International | April 2014

2014 INTERNATIONAL TAX AWARDS: Big Four International Tax Team of the Year - Brazil

2014 International Tax Awards:

Big Four International Tax Team of the Year - Brazil

EY Brazil was recently awarded an International Tax Award, as voted by AI magazine readers.

---------------------------------------------------------------------About EY EY is a global leader in Assurance, Tax, Transaction and Advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

Worldwide, our 175,000 people in more than 150 countries are united by a common purpose — building a better working world. In 2013, we launched Vision 2020, which sets out EY’s purpose, ambition and strategy. In creating Vision 2020, we spent time looking keenly at the world around us, speaking with people inside and outside of EY: leading thinkers, clients and our people. In the process, we realized that our purpose is clear — building a better working world.

Every day, every EY person is part of building a better working world — for their clients, their communities and themselves. We believe that everything they do — every audit, every tax return, every advisory

opportunity, every interaction with a client or colleague — should make the working world better than it was before.

In Brazil, EY is the most comprehensive Assurance, Tax, Transaction and Advisory firm, with more than 4,500 professionals that support and provide services to more than 3,400 small, medium and large clients.

EY Brazil is an Official Supporter for the Rio 2016 Olympic Games and an exclusive provider of Advisory services for the Organizing Committee. The alignment of the Olympic Movement’s and EY’s values was critical for this initiative.

Tax management integrated to strategy A successful tax management provides a strong base of information and sustainable planning which may help you achieve your growth potential. You need tax strategies in line with your business drivers, built on efficient compliance and transparent data reporting.

Our integrated service approach addresses current major issues. We also team with other EY colleagues to deliver integrated services in areas ranging from supply chain optimization and process improvement to financial accounting and reporting. We offer leadership in all tax disciplines, including business tax, indirect

tax, international tax, transactional tax, and taxrelated issues associated with human capital. We place particular emphasis on the most pressing issues facing companies worldwide today.

EY Tax service line is dedicated to help our multinational clients meet their complex tax obligations around the globe. By helping our clients meet all their obligations, we help them to not only manage and grow their businesses in the communities where they operate but also to understand and make better decisions surrounding the risk relating to their tax decisions.

For more information about our organization, please visit www.ey.com.br

Company: EY Brazil Name: Luiz Sérgio Vieira Filho Web: www.ey.com.br Email: Luiz.S.Vieira@br.ey.com

Acquisition International | April 2014 | 21

SECTOR SPOTLIGHT: Partnering with Cyprus – 2014’s Pipeline to Success

Partnering with Cyprus: 2014’s Pipeline to Success

Cyprus – Future Hub for Natural Gas Cyprus has increased its prominence as an international financial centre since it became a member of the EU in 2004. A fully EU compliant taxation system combined with a professional workforce, flexible to do business across many jurisdictions, has placed Cyprus as the choice of preference for structuring international investments across the EU, Russia and the CIS, India, the Balkans and the Middle East.

Natural Gas Findings off the coast of Cyprus In 2007, Cyprus added itself on the world Energy map with the discovery of substantial resources of Natural Gas and Oil. This discovery led to new strategic alliances for cooperation with Israel and other neighbouring countries for the commercial exploitation of these Energy reserves. The first exploration license was given to the US based Noble Energy International LTD. In the second round of licensing in December 2012 a whole new group of international energy companies from the USA, Norway, Canada, France, Italy, Australia, South Korea and Israel added themselves to list of interested parties to the Energy reserves of Cyprus.

What are the opportunities?

The creation of the new industry of Oil and Gas in Cyprus gives rise to a numerous investment opportunities and attracts international companies and

Company: Aspen Trust Group Name: Andreas Athinodorou, CEO Email: andreas.athinodorou@aspentrust.com Web: www.aspentrust.com Telephone: +357 22 418 888 Address: Elia House, 77 Limassol Avenue, 2121 Nicosia, Cyprus

22 | Acquisition International | April 2014

investors to the island. These investors and companies need assistance in the best way to do business on the island, tax structuring, legal administration and meeting local regulations, financial reporting requirements, HR and Immigration matters. Above all they need a service partner who can guide them through the maze of investing in a new industry in a new country.

What we can do for you?

The Aspen Trust Group has been offering since 1998 the complete range of services that are needed to structure investments through and into Cyprus.

These services include advice on the optimal legal structure for an international investment, setting up the legal entities required in Cyprus and in another 20 Jurisdictions and offering ongoing management services including day to day back office administration, banking and treasury services, accounting and financial reporting and tax compliance services.

At the Aspen Trust Group we believe that our people make our product stand out from the rest. Our team comprises of highly qualified multi-lingual individuals with extensive practical experience in their fields of expertise and who have worked in senior positions throughout Europe. We are very supportive of our staff and help them grow through rigorous on-the-job training to help them remain up to date at all times with international professional and legal requirements.

In relation to the Oil and Gas Services, we have created a dedicated Energy Desk that will support the international companies looking into setting up operations in Cyprus. Our services include: • Advice for optimal structuring of investment and operations • Compliance Assistance for the local Oil and Gas Regulations • Acting as liaison with all local authorities and key decision makers • Offering Corporate Administration and Back office Supporting

• • • •

Provision of office space and meeting room facilities Local Accounting and VAT Compliance HR and Payroll Services Immigration and Residence Services

At the Aspen Trust Group our purpose is simple: to efficiently and professionally plan, implement and manage the most suitable tailor-made tax solution for each one of our clients.

Planning your solution We have the tax advisor’s background that allows us to have full visibility of a tax solution, and the know-how and experience that enables us to personalise it to the particular corporate needs of our clients.

Implementing your solution When it comes to tax solutions, companies nowadays have many possibilities to choose from. Whether a tax solution is ideal or not for a particular client is not dependant on the tax advice itself, but on how the solution is implemented. We ensure that every tax advice is executed correctly by integrating the services of the most selective network of specialist companies required for its implementation.

Managing your solution We look after our clients’ solutions to make certain that the tax advice remains flexible enough to meet their corporate needs and to facilitate the growth of their business and wealth. Our objective is to ensure that every tax solution is implemented as a vehicle that takes our clients from where they are now to where they want to be.

Concluding Remarks In the crossroads of three continents, Cyprus has always been a centre for trade and investments. We invite you to explore the possibilities available in Cyprus now by talking to us. Let us help you build your investment focus and your wealth by offering our local and international expertise.

SECTOR SPOTLIGHT: 2014 Q1 Review

2014 Q1 Review GasTechno® is one of the world’s most capital efficient gas-to-liquids (GTL) technologies. The companies’ patents were ranked #1 in Ocean Tomo’s IP Innovation Index Top 100 for the State of Michigan in July 2013, edging out some of the worlds most recognized patent brands including; Dow Chemical, Ford, GM, Siemens, University of Michigan, Michigan State University and GE Aviation. GasTechno® has already completed numerous feasibility studies worldwide and is positioning for an aggressive international growth strategy.

GasTechno® boasts a growing portfolio of North American and global patents and intellectual property pertaining to the scalable, modular conversion of natural gas and associated gas into methanol, ethanol & diesel fuels. In March 2014, a new subsidiary called GasTechno Energy & Fuels (USA) LLC was established to raise the companies first $7 million dollars in equity capital to commercialize the technology within the United States under an exclusive license agreement.

Walter Breidenstein, CEO and founder, explains further: “We are an alternative energy company helping gas producers create value from small sources of stranded, vented and flared gas. We work with numerous sources of methane feedstock, including natural, landfill and biogas, for the conversion into liquid fuels and chemicals.”

GasTechno® Features With everything from skid-mounted modular solutions (such as GTL In A Box™ and Methanol In A Box™) to four larger commercial scales of plant designs, GasTechno® has a solution for an enormous range of sites. GasTechno® plants are estimated to have up to70% lower capital costs and 20% lower operating costs than traditional GTL plants at commercial scales.

The technology requires no catalyst and handles carbon dioxide as high as 60%. GasTechno® is able to generate valuable liquids that integrate with commercially available processes for the synthesis of methanol into diesel, gasoline, olefins, polypropylene, acetic acid, formaldehyde, biodiesel, di-methyl ether, and other market-specific products. It is the only proven technology in the world that can do this at low cost and smaller scales than tradition competitors The GasTechno® process is designed to operate profitably at gas volumes as small as 200 thousand standard cubic feet per day (mscfd) up to 30 million standard cubic feet per day (mmscfd). Because the

Company: GasTechno Energy & Fuels (USA) LLC Name: Walter Breidenstein Email: walterb@gastechno.com Web Address: www.gastechno.com Address: PO Box 640 Walloon Lake, Michigan 49796-0640 USA Telephone: 231.535.2914

24 | Acquisition International | April 2014

GasTechno process scales so efficiently, it is the only mini-GTL technology which can effectively monetize associated flare volumes under 700 mscfd.

GasTechno® Global Licensing & Commercialization Strategy Breidenstein explains a little about the company’s growth strategy: “Gas Technologies is recruiting a global network of early adopters and subsidiary partners. We have been working with our lawyers at Brooks Kushman, (Michigan), Simmons & Simmons, (Abu Dhabi) and Dechert (Moscow) to finalize a global licensing model that allows flexibility and grants exclusive territories to select companies. The global GTL market is growing rapidly and we want to expand through long-term exclusive relationships.

“Through our support of, and association with, the World Bank’s Global Gas Flaring Reduction partnership, we are studying the enormous problems of gas flaring worldwide. Their research and global network of member oil and gas companies are a focused group looking to reducing this significant environmental problem. We anticipate licensing our technology to select governments through public-private partnerships, national oil companies, and international gas flaring members through this commercialization strategy.”

“Oil demand is somewhat inelastic by nature. Even so, GasTechno was relatively insulated from the recent global economic uncertainty as resource utilization is a common objective when companies look to tighten their belt. It also helps that our business portfolio is pretty well balanced between developing and developed nations.” he says.

“We are seeing traditional project finance lenders that want low risk, yet long-term capital utilization. Our projects usually last 10-15 years at small scale, and 20-25 years on larger scale. Because our technology works on much shorter lead teams than traditional GTL projects, we are seeing increasing amounts of attention from traditional lenders” he says, “The lending market is closely watching both Shell Pearl GTL and SasolChevron Oryx GTL to see the cash flows generated from those enormous projects”.

“Regarding the current global attitude, there is definitely guarded optimism,” he continues. “The fundamentals have grown more stable and consistent in the energy sector. The USA has taken a global role in oil & gas production compared to their historical role as a large importer of crude oil. Improvements to service efficiencies and fracking technologies, as well as MENA disruptions are driving a dramatic shift in energy policy as the US moves toward a net energy exporter. As a result, The energy sector is getting more attention from growth orientated investors.”

“The mini-GTL® and small scale GTL sector has been a bright spot for the energy sector, recently attracting some of the more well-known names in the energy business. Investors are hesitant to stomach the long plays involved with traditional, capex heavy energy projects. Meanwhile, extraction costs are forcing companies to make tougher decisions and focus on

resource efficiency. Few plays offer the short term returns of gas capture and utilization technologies.

Because of that, we have seen a lot of really promising technologies surface. The macro’s around our industry have also been really positive, with low gas prices and a boom in shale gas extraction, we expect the market to have a clear winner by 2015-16 “ “We are starting to see traditional sub-sectors mature into their own entities. There is large potential in subsets of the energy sector as well, specifically in the methanol, LNG and GTL spaces.”

“There are a lot of gaps in the market right now as a result of restricted financing and investor hesitation.

We expect to see an uptick of M&A’s as the energy sector expands.”

As with most sectors, new legislation and regulations have had their impact, however Breidenstein believes that there is more to come.

“Early GTL adoption was driven by regulatory requirements. Eventually it will become commonplace but, for now, regulations remain a primary driver.

External pressure to stop flaring is coming from everyone; environmental advocates, shareholders, local communities and landowners all have reasons to curtail flaring, so we are definitely seeing positive trends. As awareness around the issue grows, we are seeing some strong moves from governments in North Dakota, Texas, Alberta and Saskatchewan in North America, with similar trends developing worldwide. We believe more needs to be done but, it is nice to see the progress over the last few years.”

Walter Breidenstein, CEO and founder, Gas Technologies LLC Mr. Breidenstein, 48, is the founder and CEO of Gas Technologies LLC, the parent company of GasTechno Energy & Fuels (USA) LLC. He has over 20 years of experience in the fields of oil & gas, renewable energy, and management and has conducted business in nearly 50 countries. In April 2007, he received the ‘Leaders & Innovators’ award by Lawrence Technological University for his contributions to Michigan’s advanced technologies. Walt earned an associate’s degree in Petroleum Technology from Northwestern Michigan College and a bachelor’s degree in Business Administration from Ferris State University, where he co-founded and became president of FACE (Ferris Association of Collegiate Entrepreneurs).

SECTOR SPOTLIGHT: 2014 Q1 Review

STOP FLARING

®

Gas Technologies LLC +1 (231) 535-2914 walterb@gastechno.com www.gastechno.com

PIPELINE™

Methanol in a Box™ GTL in a Box™

Associated Gas

Bio Gas

Natural Gas

®

NO MIDSTREAM COSTS

™

Mini-

®

Plant Scale

Plant Size (MMSCFD)

0.2

0.75

1.50

5.0

Capex ($M)

1.95

4.65

8.4

21.9

79

240

488

1675

2.61

2.48

1.87

1.30

51

68

87

129

3.07

9.69

24

99

BBLD Break Even (Yrs) IRR (%) NPV ($M)

Methanol ● Ethanol ● Diesel NGLs ● Gasoline

Commercially demonstrated and ready for production

End Products: 2-5X Higher Profit Yields Than Natural Gas

Retail Fuel

Fleet Trucking

Bunker Fuel

Mining

Industrial Chemical

Fertilizer

Rig/Onsite

Copyright 2014 © Gas Technologies LLC

Acquisition International | April 2014 | 25

SECTOR SPOTLIGHT: 2014 Q1 Review

Old West Pier, Brighton and Hove Nik Askaroff has high hopes for 2014...and not just because his firm celebrates its 25th anniversary this year.

Nik, founder and CEO of EMC Corporate Finance Ltd, believes the M&A market in the UK is set to continue the recovery it started last year after a long period in the doldrums.

“There’s every reason to think that we’re now at the start of a period of sustained growth in activity,” Nik said. “Ok, the year hasn’t got off to the greatest start with both overall volumes and values down in the first couple of months compared to 2013, but all the ingredients are now in place for the market to initially consolidate the gains it made last year and then to push ahead later on.”

Nik thinks that the SME sector, in particular, will benefit as more and more acquirers gradually re-enter the market.

“This lower end of the market has suffered worse than most in the recession. Not only was acquisition finance hard to obtain, with the virtual withdrawal of our banking system from anything other than secure asset lending, but valuations also fell through the floor,” he said.

“It has not been uncommon to see values of only 3-5 times EBITDA (earnings before interest, tax, depreciation and amortisation) for anything other than high growth or protected sectors, and even then the buyers have often just not been there. As shown by the record reserves held on corporate balance sheets, potential acquirers have been protecting their own cash or only looking for distressed bargains.”

Company: EMC Corporate Finance Ltd Name: Nik Askaroff Job Title: Chief Executive Email: nik.askaroff@emcltd.co.uk Web: www.emcltd.co.uk Address: Rochester House, 48 Rochester Gardens, Hove, East Sussex BN3 3AW Tel: 01273 945984

26 | Acquisition International | April 2014

EMC, the South East’s leading independent corporate finance boutique, saw things begin to turn around last year with both volumes and values strengthening as the year went on. According to Nik it heralded a new sense of optimism among owner/directors that the time may now be approaching for them to capitalise on their years of hard work building their businesses.

“The low values of the last few years have put a lot of people off selling, and the continuing low interest rates haven’t helped either. It has required a big increase in the amount of capital that people need to invest in order to achieve the necessary income replacement to allow retirement,” he said.

“It’s vital that business owners run the numbers before considering any sale to ensure that they will be able to live on whatever net-of-tax proceeds they might eventually receive. All too often they only do this calculation once they are in the process of selling by which time effort and money may already have been wasted. The strengthening values we are now seeing will certainly help in this regard.”

The small value sector of the UK M&A market (deals between £500,000 and £10m) rose by more than 20% in the final quarter of 2013, with more than 400 transactions being completed. EMC itself completed 11 good transactions and Nik expects this growth trend to continue throughout 2014.

“The market ended 2013 significantly more active and firmer, value wise, than at any time in the last five years. Most businesses with sustainable profits over £500,000 are finding good buyers,” he said. “As global markets hopefully continue to prosper, I expect to see further increases in activity and value.

“Another important factor is the slow but sure return of banks to the M&A sector. At last we are seeing some evidence of acquisition and mezzanine finance returning which will help to support stronger values in the future and encourage more management teams to take ownership through MBOs. “The Venture Capital and Private Equity sector will also continue to be active as they have been throughout the lean years. They really helped to keep things going, albeit it in a reduced way, once the banks pulled in their horns, frequently financing 100% of deals through

equity, and they continue to show a real appetite for any business with sustainable and growing profitability, led by an ambitious and proven management team.”

Nik said he expects financial services to continue to be the most active sector with manufacturing (particularly technology, media and telecoms) and professional/ business services following on with double digit growth.

“The UK market as a whole will benefit from the continuing growth in US activity. We’re their number one target for investment and number two for acquirers,” he said.

“We completed a major trans-Atlantic deal late last year with the sale of London-based Bellville International Ltd, a $100 million global provider of freight forwarding and logistics services, to OIA Global based in Portland, Oregon. Although the deal was highly complex – it involved more than 20 locations around the world – we managed to get it completed within just 90 days of the signing of the Letter of Intent and 100 days of the initial contact with the buyer – a record in our 25 years of advising on transactions. We were proud of that.”

Nik, a former Accountant of the Year, formed EMC in 1989 and has built it into the South East’s leading independent provider of corporate finance advice and support. It was this magazine’s UK SME Corporate Finance Firm of the Year in our annual Finance Awards last year and was also among the winners of our M&A Awards. Then earlier this year, it won the Deal of the Year Award at the 2014 Insider South East Dealmakers Awards.

The firm also pioneered the concept of the ‘mobile boardroom’. Its multi-disciplined taskforce of senior professionals, all of whom have extensive experience of running both large and small businesses, provide Board-level support and advice to companies on a short or long-term basis. They work across the main business disciplines – finance, sales, marketing, manufacturing and IT – to provide interim management (particularly finance directors), strategic planning, sales training, exporting, e-commerce, and general business advice to companies of all sizes and across all sectors.

SECTOR SPOTLIGHT: 2014 Q1 Review

Jos Raben is a Partner at Mazars Transaction Services in the Netherlands. He talks to us about the challenging current economic climate, how the firm is coping and why the future looks.

---------------------------------------------------------------------Jos Raben, partner at Mazars Transaction Services, based in the Netherlands. He has worked for the firm since 2008 and has over 15 years of experience as a financial consultant and auditor. Jos’s transaction experience includes (cross border) financial (vendor) due diligence assistance and other transaction-related work in connection with acquisitions, disposals, listings and venture capital for Small and Mid-Caps but also SMEs. He also has specific knowledge of the following industries: Transport and Logistics, Technology, Media & Telecom and Healthcare, as well as extensive experience with private equity and venture capital as financial advisor and strategic analyst.

Jos tells us more about the firm and what it is that gives it the competitive edge.

“Mazars is one of the leading audit, advisory and tax firms in the Netherlands,” he begins.

“Mazars Transaction Services provides companies with information about their potential merger, acquisition, carve-out or management buy-out.

The services include; Due Diligence, Corporate Finance, Restructuring, Project Financing, Forensic & investigation services. Mazars has a dynamic national practice backed up by our unique, international partnership - local roots with a global reach. Whilst we take a proactive, innovative approach to our clients’ issues, we never forget the importance of personal attention. Mazars Transaction Services offers a wide range of services to Private Equity, entrepreneurial and owner-managed businesses, listed companies and wealthy individuals.”

Jos continues to explain the current economic climate in the Netherlands, including what he feels has effected economic growth recently.

“In the Netherlands we are faced with positive indicators that in 2014 the economic growth will end at 1 percent rather than the previous estimated 0.2 percent. Although this looks good this is still below the average growth in the EU. Major drivers for the growth to continue will be the developments in Germany (as history has proven) but also the recent developments

in Europe because of Russian foreign activities.

Nevertheless the M&A market in the Netherlands is looking good, we see an increase of M&A activities at the Private Equity Clients but also at the Mazars Corporate Clients. The Companies are preparing for the upcoming M&A season after the ‘hibernation’ that lasted too long. There is sufficient cash available at the PE funds but also at Corporates, there might only be a problem and that is finding the right assets to invest in.”

Due to low economic growth experienced Jos expects growth to remain low for the coming year, as he explains: “Since economic growth tends to go handin-hand with customer confidence I foresee a rather modest growth for the M&A market in 2014 as well.

Next to that the financial institutions are trying to comply with regulatory mandates such as the Volker’s rule that becomes already effective on July 15, 2015.

Another important rule is the Basel III, these will have to be fully implemented on January 1, 2019 and the Solvency II applications have to be implemented in January 1, 2016.”

All these rules and regulations might become a barrier to cross-border M&A activities but also delay the growth of the economy in general. Jos tells how rules and regulations are impacting the M&A industry. “In the Netherlands the banks are downsizing their loans to companies and this is mainly the effect of the implemented rules such as the Basel III and Solvency II as the banks are trying to comply with these rules.

These rules require the Banks to hold sufficient capital against assets that they own. So the effect is that there is less or no financing for growth either organically or via acquisitions.

“Our experience the last few months, is that it still takes a lot of time to close the deal and that buyers are still lacking the confidence that is needed to create an upswing in the M&A market. I think that this will continue for the coming 3 to 6 months as well, so there will be deals but our patience will be put to a test.”

The economic crisis has certainly hit the Netherlands hard, with M&A deal value and the total number of deals still being relatively low. “It is clear that we still have a long way to go to recover to pre-crisis levels,” says Jos, but it is not all doom and gloom. “This financial crisis began in 2008, already more than five

years ago, however there are also positive signs as many PE funds in the Netherlands managed to raise cash this quarter and this cash has to be put to work.

Next to this the so called ‘mountain of cash issue’ will become more and more urgent; this might also become important already this year. And finally, the lack of good assets might increase the competition for these assets which might result in the increase of the deal values.”

But despite low economic growth and low deal values, Jos has seen some trends emerging which may hold the key to a brighter future.

“Spring has arrived early this year and the same might happen to the M&A market,” he quips. “Although the trends are not completely clear at this moment, and there are some hurdles still to take, 2014 may become an interesting M&A year after all.

“The successful raise of new cash by PE and the substantial cash reserves at Corporates need to be put to work. However in my opinion we will see these activities really lifting off by the end of the second Quarter of 2014.

“Recently, we have been contracted by various parties to assist them in the selling process; this includes offering carve-out services and the vendor due diligence. On the buy side, our corporate finance team has won various mandates and are looking for the right assets. This gives us confidence that the M&A market is back on track although there is still a long road ahead.”

Company: Mazars Transaction Services N.V. Name: Jos Raben Address: Mazars Tower, P.O.box 7266, 1007 JG Amsterdam, Delflandlaan 1, 1062 EA Amsterdam The Netherlands E Mail: jos.raben@mazars.nl Web: www.mazars.nl Tel: +31 88 277 23 89

Acquisition International | April 2014 | 27

SECTOR SPOTLIGHT: 2014 Q1 Review Ray Soudah, founder of MilleniumAssociates, speaks to AI magazine regarding current market developments in Switzerland.

---------------------------------------------------------------------MilleniumAssociates is an independent international M&A and Corporate Finance Advisory firm based in Switzerland and the UK. Founded in 2000 and owned by its partners and management, the company is uniquely positioned to offer independent and nonconflicting advice to its clients whilst providing a refreshing perspective on recent market developments.

Emi Cristea / Shutterstock.com

The companys’ high calibre M&A and Corporate Finance experts are currently active in variety of advisory assignments.The company operates two focused yet interrelated business lines; the Corporates & Entrepreneurs Practice which specialises in supporting corporates and entrepreneurial business owners all over the world with their M&A needs, while the Financial Services Practice focuses on transactions for the global financial services industry, in particular the global wealth, asset management, private banking and private equity sectors.

The emphasis on the Corporates & Entrepreneurs means that MilleniumAssociates’ clients come from a broad range of differing sectors and both they and the Financial Services’ clients can be international, regional or national organisations. Often requiring a strategic solution that involves a global perspective, clients’ benefit from MilleniumAssociates’ exceptionally broad professional worldwide network which includes a wide range of institutional and private investors.

This international reach is augmented with a number of similarly independent and unconflicted global strategic partnerships giving the MilleniumAssociates exceptional access into the key growth regions of the world and strengthening its local and regional coverage as well as supporting the service offering as required.

Ray Soudah founded MilleniumAssociates and takes a strategic advisory role supporting the operational team. Ray has enjoyed a long and varied career in the global financial services arena working in territories as diverse as the US, Asia, Middle East and Europe. Earlier positions include; Managing Director and member of the Private Banking Management Board for SBC/ UBS AG; Chief Investment Officer, Chief Financial Officer and member of the Executive Board of Cedel Bank (renamed Clearstream); Chief Investment Officer for the National Bank of Bahrain including Head of International Banking and Private Banking; CEO of Hong Kong, CEO of Japan, Head of Global Capital Markets office (London) and head of FIG for Midland Montagu Investment Banking and MD/CEO of Midland Montagu Securities as well as various senior positions within Citigroup, including Head of Asia Pacific Treasury and Capital Markets.

Ray is a Harvard Business School & INSEAD Alumnus.

He has multicultural, multilingual wealth management and private banking/investment banking expertise and speaks English, French, Greek and Japanese.

As Acquisition International’s leading expert in Switzerland, Ray gives Acquisition International his insight on current market developments.

“Confidence has returned not withstanding recent political turmoil in various regions of the world and as this is based on stronger worldwide economic growth, a larger number and volume of M&A flows are expected.”

28 | Acquisition International | April 2014

And as Q1 closes, Ray tells us that previous optimism has been justified. “Although,” he adds, “some shine has been taken off some of the emerging markets. Two regions in particular about which we are very optimistic in terms investment to and from are the GCC and Asia Pacific.”

MilleniumAssociates’ areas of expertise, as well as Ray’s specific jurisdiction, have experienced growth over the last quarter and Ray attributes this to the firm’s extensive platform and global reach, and states that the ability offer clients truly global solutions is becoming more essential even for domestic or regional players. He has also noticed trends emerging of late and states that the industrial areas, such as energy and telecom, seem to be particularly buoyant again when compared to Q1 of last year.

“There is also greater than in the Arab Gulf States than before,” he says as he predicts what he believes he will see as Q2 gets underway. “Companies and entrepreneurs which have solid regional or global

businesses or a sector specific expertise will be in greatest demand.”

MilleniumAssociates AG is a member of the Swiss Private Equity & Corporate Finance Association (SECA) MilleniumAssociates (UK) Limited is authorised and regulated in the UK by the Financial Conduct Authority

Company: MilleniumAssociates AG Name: Ray Soudah Email: ray.soudah@milleniumassociates.com Web: www.milleniumassociates.com Address: Kreuzstrasse 54, 8008 Zurich, Switzerland Telephone: +41 58 710 47 00

SECTOR SPOTLIGHT: 2014 Q1 Review

Burj khalifa, the highest building in the world, Downtown is covered by early morning fog on May 12,2013 in Dubai, UAE

Michael Kortbawi is a Partner at Bin Shabib & Associates and Nadim Bardawil is an Associate at the firm. Here, they provide an overview of the current climate in Dubai.

---------------------------------------------------------------------Michael Kortbawi is a Partner at Bin Shabib & Associates’ Corporate and M&A practice with a strong focus on Insurance & Reinsurance, based in our DIFC offices in Dubai. He has gained hands on experience in the Middle East and North Africa Region having practiced in the UAE for over ten years and supervised the organic growth of Bin Shabib and Associates into the five jurisdictions in which it now operates.

Nadim Bardawil is an associate at Bin Shabib & Associates’ Corporate and M&A, and Insurance & Reinsurance practices, based in our DIFC office in Dubai.

He specialises in transactional corporate work mainly in the oil & gas and insurance and reinsurance industries.

The global economy has experienced much uncertainty in recent years, however 2014 is predicted to be much healthier. Both Michael and Nadim have witnessed this up-tick.

“We have definitely experienced an increase in activity through the first quarter of 2014,” says Michael.

“Dubai has especially felt this surge in activity with the announcement in late 2013 of the city’s winning Expo 2020 bid. Although the World Expo is not an automatic revenue generating event, it will cater to Dubai’s ever growing service sector and its revitalized construction and real estate industries.”

Nadim adds: “We have also noticed a rise in conversations between companies seeking to find new ways of cooperation, whether through direct M&A or through other structures. The bringing together and pooling of resources, especially with large corporate players, is always a positive indicator for a burgeoning market and we expect this trend to continue throughout 2014.”

Both agree that the current attitude is one of optimism as the lifting of the shroud of gloom which has engulfed the economic climate in recent years. “There are a number of developments specific to the UAE that

Naufal MQ / Shutterstock.com

have spurned this rise in economic activity. In contrast with the somewhat stagnating emerging markets, the UAE and Dubai seems to be performing quite well. We have received a number of inquiries from our existing international clients who are seeking to expand their operations in the UAE and the region as well as from new clients who are eager to tap into the growth and potential that the UAE has to offer.

that the new federal law may be ratified as soon as the beginning of Q2 of 2014. The new framework is reported to facilitate the incorporation of new companies, increase transparency among corporate entities based in the UAE and encourage additional FDI in the country. There are reports that a law facilitating the setup of SME’s is also in the pipeline with an expected draft to be released in 2014.

“We usually see a pattern of steady growth in Q1 due to the start of the new year and a number of companies at the start of their fiscal year and thus at the peak of their spending cycle. This year, we have noticed that our clients are looking to secure more strategic long term investments through their activity than in previous years. The UAE remains one of the only jurisdictions in the Middle East which has not had to deal with any of the fallout from the “Arab Spring”. This has lead to an increased confidence in the jurisdiction as well as an influx of funds which may have previously been earmarked for other jurisdictions.”

“The above will contribute to creating a market with a regulatory framework that encourages M&A and provides for easier procedures and processes. Deal volume is usually linked to the maturity of a market and the UAE market is progressing towards the type of maturity that would encourage an increase in M&A activity.”

Certain sectors, more than others, have experienced increased activity, especially compared with last year, as Michael explains: “We have primary seen activity in the insurance industry and the oil & gas sector. This has pretty much followed the trends that we have seen in the past year although we have also witnessed M&A activity across a wide range of sectors such as the service, construction and art industries.”

By all accounts, it seems that Q2 is going to continue along the same vein as Q1 for Bin Shabib & Associates.

“We believe we will continue to see encouragement in FDI in the UAE as the country continues its economic expansion. Dubai in particular has announced several large infrastructure projects which will create a large number of jobs. Coupled with a rejuvenation of the real estate market, with many large projects announced in Q4 of 2013; Dubai is poised for more of the same in 2014.”

“The construction and real estate sectors have also had a very steep increase in activity in Q1 although this increase has been progressive since 2013,” adds Nadim. “The UAE is continuing to invest in its infrastructure with new airports and logistics centres being built in both Dubai and Abu Dhabi ensuring that trade and industry will continue to be active throughout 2014.”

Emerging trends have been noticed by both partners and associates at Bin Shabib, most notably the redraft of Companies Law in the UAE. “The UAE has long been discussing a redraft of the Companies Law,” they explain. “An initial draft was set out in Q1 of 2013 and it has been reported

Company: Bin Shabib & Associates (BSA) LLP Name: Michael Kortbawi Nadim Bardawil Web: www.bsa.ae Address: Level 6, Building 3, The Gate Precinct Dubai International Financial Centre P.O. Box 262, Dubai, United Arab Emirates

Acquisition International | April 2014 | 29

SECTOR SPOTLIGHT: 2014 Q1 Review Chain Bridge, Royal Palace and Danube river in Budapest at night.

Steven Conybeare is the name partner of boutique international law firm Conybeare Solicitors, with offices in London and Budapest, undertaking cross-border transactions in and around the CEE. ---------------------------------------------------------------------Established in 1997, we combine our English law expertise with local market experience and intelligence to provide a better perspective for our clients from the outset of negotiations all the way through to execution of a transaction. We help clients realise their business objectives in a timely and efficient manner, by fully understanding their aims, objectives, taking into account business parameters, developing and executing a strategy to minimise regulatory and legal risk and drawing together the full extent of our legal expertise and business experience.

Deal volumes in Q1 2014 have been relatively quiet, with no evidence of a seismic shift in attitudes to M&A so far, and none really expected. Compared to last year, we have seen a similar number of transactions being started and negotiated, but the speed of closing deals seems to be taking longer - we have witnessed stronger negotiation on price from potential buyers combined with a level of resistance from sellers to transact at undervalue.

The most significant factor which has been affecting attitude included the general elections, held on 6 April 2014, which saw the ruling party secure another landslide victory, so there is no reason to suppose there will be any change in policy. Other factors include the somewhat unexpected continuing reduction in base rates and the not insignificant depreciation of the local currency (HUF) since the start of the year. However, there are no clear trends which emerge with expectations of a continuation of current government and consequently an expectation of a continuation of existing policies, such as the special taxes currently levied on the energy, telecom and banking sectors.

Company: Conybeare Solicitors Name: Steven Conybeare Email: law@conybeare.com Web Address: www.conybeare.com Address: London & Budapest Telephone: +44 870 7530925 /+36 1 577 9936

30 | Acquisition International | April 2014

Due to the elections, it was perhaps not unexpected to hear the good news flowing in the local media in Q1, although headline statistics seemed to bear this out albeit with muted growth in GDP and a rise in industrial production and employment numbers. However, dig below the surface and the underlying macro trends seem to remain as before with a relatively fragile state of being, with a significant part of the good figures being generated as a result of government related projects.

There is still muted lending into the economy which appears to be holding back the realisation of a number of opportunities and there is still a lack of significant real foreign investment (outside of key industrial sectors such as automotive and related manufacturing) with construction and utility related investments being led by the government.

Recent events in Ukraine are likely to have some impact and consequentially attitudes towards risk generally, but Hungary has limited exposure to Ukrainian trade, although banking, food and pharmaceuticals may be worst impacted. Nevertheless the bigger picture, including EU sanctions against Russian interests, may yet have a greater impact on Hungary despite the government’s stance on maintaining good relations with Moscow.

Generally speaking, deal opportunities are out there with a number currently under negotiation but with limited closings within Q1. However, even with opportunistic values, across many sectors, including real estate, transactions remain muted. Smaller transactions continue against this value backdrop where buyers believe they can secure assets at a discounted value, although not all will get to closing with sellers seen offering real resistance.

Deals generally have been concentrated in the government sphere (utilities/energy/banking), with buy-outs of foreign owned utility companies and establishment of more Hungarian owned banks as part of the government’s stated intentions. These represent the largest deals which have been in the services sector as these are the 2 areas that the government is keen to restructure and so it is the most active buyer. The sellers are foreign owners who are perhaps not keen to face legislative changes or a further reduction in utility tariffs, as currently being proposed for later in the year.

Business confidence appears to be on the increase, and the hope is that this continues, although the cause of the underlying optimism is not always clear. The overall attitude seems to be one of perseverance in the sense things can only get better.

Significant new legislation arrived on 15 March 2014 with the implementation of the new civil code. This was the single biggest change in legislation for some time. Whilst we were all expecting it, it is too early to know how significant an impact it will have. However, it is clear that it will impact on restructuring existing security arrangements as well creating new such arrangements. Key corporate related developments include increasing the minimum registered capital of companies from HUF500k (EUR 1600) to HUF3m (EUR 9700) as well as new provisions relating to joint and several liability of executives in certain circumstances.

There are also new concepts being introduced, such as trusts, which will provide an opportunity for more straightforward structuring of transactions in line with international expectations, but at the same time as none of these concepts have yet been tested in practice, there will inevitably be a number of challenges arising in due course.

During the course of 2014, we expect Hungary to continue to be on the tail end of global sentiment, with continued focus on its base rates and the value of HUF. It is unlikely that Hungary will experience a strong upturn, as this would indicate a sudden change of direction from the past 2-3 years where deal volume has remained low and mainly the preserve of government and related entities. There may be an increase in deal volume but I do not expect to see any miracles, with foreign investment remaining muted.

Even though Budapest was recently named as the most attractive Eastern European city for FDI in 2014 by FDi magazine, there remains an inherent preference for Hungarian owned investments to bolster the economy.

There remains cautious optimism going forward partly driven by an expectation of a more consistent business environment, as a result of far less policy adjustments being made on a regular basis. However, the forthcoming elections, along with the impact of continued talk of further reductions in utility tariffs and further adjustments to FX currency mortgages and the new legislation affecting farming land in Q2, as well as the events in the Ukraine, may have yet unseen repercussions both on the economy as well as attitudes to doing deals in Hungary in 2014.

Overall there seems to be a growing confidence for a rise in underlying asset values by both buyers and sellers which should lead to resurgence in the number of transactions being undertaken across a range of industry sectors, but this is by no means certain and 2014 is likely to remain a fragile year for the M&A market in Hungary.

SECTOR SPOTLIGHT: 2014 Q1 Review

Petronas Tower and KL Tower, Kuala Lumpur, Malaysia Vincent St. Thomas / Shutterstock.com

iii. Corporations continue to grow via acquisition and the integration of acquired assets into their group. It has allowed for sustained growth of these corporations which are the focal of investment and capital markets activity. iv. Inward investment in manufacturing and added value manufacturing continues. Despite regional rivals, the superior infrastructure and the availability of core support services has enabled the country to sustain a respectable level of FDI and re-investment. 2013 saw the highest ever recorded FDI of RM 38.8 billion alongside RM 161 billion in private investment.

“Premised upon this, there is every reason to anticipate that the factors which constitute the impetus for growth will continue.”

The future holds promise Malaysia and Rutheran forsees scope for M&A activity in 2014, with the real estate, engineering, oil and gas and financial services sectors appearing to be at the focal point of M&A activity.

Rutheran Sivagnanam is Head of Chambers & Director of Chambers Group. He speaks to AI about the tough climate that Malaysia is currently experiencing.

---------------------------------------------------------------------Rutheran speaks about the firm and the services it offers: “Our services encompass advisory and dispute resolution services in the field of Corporate Law, Joint Ventures, Construction & Engineering Contracts, Employment and Public Law, Commercial Law, Commodity Supply Contracts and international trade as well as Capital Markets work.

“We function as a dynamic boutique practice leveraging upon strategic alliances in several major markets including Singapore, Hong Kong, India, London and Middle East.”

The mood in Malaysia is one of cautious optimism, says Rutheran and he goes on to explain more about the current economic climate.

“The Malaysian economy did not encounter a serious correction in the last year and hence the economic consciousness of an “uptick” is not consciously felt.

The focus is one of sustaining, deepening as well as spreading the quality of growth. The completion of key infrastructure especially in regard to transport systems and financial services lies at the heart of this.

“Caution stems from the unknown consequences and conflicting predictions of the fallout following the tapering of quantitative easing in the USA. It is perceived that the exercise will result in capital being withdrawn from Asia. The reality however is far more complex and is a function of relative corporate earnings and risk across sectors, regions and nations.

Caution also stems from the fact that we are nearly 7 years down the road from the last economic down-cycle and a historical revisitation is anticipated.

Regional economies such as China and Singapore have respectively taken measures to cool their real estate markets. At a macro level, the government has committed itself to greater fiscal discipline. Thus the hope for a public sector push factor has moderated.

“Optimism stems from the anticipation of the completion of several major infrastructure projectsthe MRT Mass Transit System, the 2nd Penang Bridge, enhanced aviation links following the opening of the

new terminal at KLIA and the continued progress of the Iskandar Region and the East Coast Growth Corridor.

Each of these projects possess a catalytic character.

They have the capacity to draw in investment and the capacity to draw in an investor who seeks not just market entry but one who seeks a regional platform.

This optimism presents itself via the continued acquisition of landbanks and corporate exercises to position corporations to enter a launch phase.”

Despite evident challenges, the impetus for sustained growth remains. Rutheran has even noticed some trends emerging of late.

“The sense of optimism is rooted in pragmatism and continues to hold good,” he says. “The projected growth for the first quarter of 2014 appears to be in hand. Q4 of 2013 closed at 5.1% - beating market expectations. That momentum has carried into Q1 of 2014 where a 4% growth in GDP is anticipated. 2014 as a whole is expected to grow by 5.1%.

“If we go behind the data, the following is apparent: i. the real estate sector has gained in depth, sophistication and long term added value. With land prices that are amongst the lowest in South East Asia, the upside potential is tremendous.

Developers have been quick to apprehend that their interests lie in cluster development comprising of an optimal mix of commercial, residential and leisure assets- the financial centre TRX (Tun Razak Exchange), Mid Valley, Eco-City and others subscribe to this model.

“There is no institutional push for M&As, akin to the case for the consolidation of the financial services sector in the late 1990s and into 2000.

“The M&A impetus that we expect is purely market driven, as firms generally see an advantage in growth via acquisition. The Affin Banking Group is the latest in a series of Malaysian Banks who had embarked upon regional expansionism.

“As a whole the country has over the last 10 years progressively enhanced its fundamentals and key infrastructure which has the capacity to transform and to position it for longer term growth and progress towards a high wage economy.

“The underlying challenges which need to be managed in and throughout this process are: i. the enhancement of standards of governance in terms of – tendering, corporate governance, rights of investors etc; ii. the effective handling of the program of subsidy reduction on a graduated step off and step on via high growth and higher income; iii. dealing with bottle necks of progress eg the water crisis that has affected the west coast; iv. transforming the Government machinery into one that is public and business friendly.” v. the interesting inroads made in life sciences, green technology and alternative energy, by corporations who are prepared to take a long view. We wait in anticipation to see the commercialization of these investments and the ability to draw and to hold investor confidence.”

They leave behind developments that are part of the nation’s real estate infrastructure to support and to energize the services sector, which has quietly emerged as the single largest employer.” ii. The growth that is projected lies rooted in pragmatic reality via the continued growth of agriculture sector (the up and down stream – has created a fast emerging hub for Crude Palm Oil and Oleochemicals)), sustaining and adding value in the manufacturing sector, the continued advance of services and the momentum built up in new growth areas eg the Iskandar Region, the Eastern Corridor etc.

Company: The Chambers Group Name: Rutheran Sivagnanam E-mail: chambers@pd.jaring.my Website: www.rsachambers.com Address: 7th Floor Wisma Genting, 28, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.

Telephone: 603-2732 9530 Fax: 603- 2732 9531

Acquisition International | April 2014 | 31

SECTOR SPOTLIGHT: 2014 Q1 Review

Indonesia: Emerging Economic Giant

One of the economic policies to be released by the Indonesian Government to support growth in Southeast Asia’s biggest economy is the revision of the negative investment list. In general, it would be less restrictive and more investment friendly. It reflects a series of efforts by the government to attract foreign direct investment, reduce capital outflows, boost exports and reduce imports. The new list would be effective in early 2014.

The government permits higher percentage of foreign ownership or even open the previously closed business field for foreign investors in certain business fields, including construction of land terminal for public purpose (49%), pharmaceutical (85%), advertising (51%) and ventura capital (85%).

The new policy would also simplify for foreign investment with the higher percentage of ownership, such as in fixed telecommunication network and multimedia fixed telecommunication network to become 65% from previously only 16%.

Certain business fields are still quite restrictive, e.g. distribution, warehousing, and cold storage for the certain areas in Indonesia. Maximum foreign ownership is 33%.

In an effort to show the serious commitment in developing the infrastructure, the government facilitates the foreign investment in the privatepublic cooperation projects (PPP). In the business of harbor facility – PPP, the foreign participation could be up to 95%. This is significant increase from 46% previously. The similar approach is also applicable on the power industry. The government allows foreign investors to hold 100% for PPP and maximum of 95% for nonPPP for the 10MW scale or above.

Our firm has substantial experience and influence to help various international clients in doing business in Indonesia and in broad range of transactions. Our practices captures in each practice the dynamism and experience to deliver real business results. BE Partners’ experience has been endorsed by various recognized international publications.

Company: BAGUS ENRICO & PARTNERS Name: Bagus S D Nur Buwono Email: bagus@bepartners.co.id Web: www.bepartners.co.id Address: DBS Bank Tower 17th Floor, Ciputra World I, Jl. Prof. Dr. Satrio Kav 3-5 Jakarta 12940 Indonesia Telephone: 62 21 2988 5959 Fax: 62 21 2988 5958

32 | Acquisition International | April 2014

SECTOR SPOTLIGHT: 2014 Q1 Review

Panayiotis Diallinas, of Eurofast, discusses the current economic climate in Cyprus with Acquisition International.

-------------------------------------------------------------The current economic crisis facing the world constitutes a great threat to the business world and to the survival of many firms. A number of firms are at the edge of bankruptcy due to this downturn, whilst those that remain above this level must increase their profitability urgently in order to secure their success for the coming years.

Cyprus has not been left unaffected.

Eurofast is offering solutions which can effectively assist businesses ensure their survival and also accomplish for their welfare.

In these difficult times, restructuring of business through mergers, acquisitions and joint ventures prove to be a viable option for reducing operational risks and avoiding insolvency.

Eurofast can provide tax and business advice as well as guidance on these subjects, both at a local and international level through our offices in the Southeastern Europe and our exceptional network of external associates. We have fully fledged offices in Bulgaria, Romania, Serbia, Montenegro, Croatia, Bosnia, Albania, FYR Macedonia and Georgia.

The M&A of companies aims generally to the union of companies for the purpose of the creating a more powerful and stable structure of companies.

Through proper planning companies can also achieve very favorable results in terms of reduction of risk and tax efficiency. M&A can also be used for expansions into new markets, with new prospects, while internal reorganizations can restructure the internal activities of a business for greater efficiency and significant cost savings. Similar outcomes can also result from a joint venture.

Eurofast has been recognised as a leader in professional services. We have achieved worldwide

market recognition for our exceptional advice, capabilities and innovation. The nominations and awards received by Eurofast are a true recognition to the valued client work we deliver every day, as well as to our knowledge, accountability, innovation and excellence in our field of expertise.

Company: Eurofast Name: Panayiotis Diallinas Email: panayiotis.diallinas@eurofast.eu Web Address: www.eurofast.eu Address: Cypress Centre, 5 Chytron Street, P.O Box 24707, 1302 Nicosia, Cyprus Telephone: +357 22 699 222

Acquisition International | April 2014 | 33

SECTOR SPOTLIGHT: 2014 Q1 Review Salli Anne Swartz is Partner at Artus Wise Partners, a Paris-based international law firm which specializes in French and international commercial and business law and cross border transactions, private clients as well as in litigation, arbitration and labor law. The firm regularly follows the evolution of French legislation to assist its clients in planning for their current and future mergers and acquisitions and other types of investments in France and abroad. Maitre Swartz tells us more.

----------------------------------------------------------------As the world becomes smaller, our clients are buying and selling businesses and companies worldwide. As their outside advisors, we must be business oriented, practical, and efficient and cost conscious.

Some of the most daunting issues which we encounter in preparing and negotiating complex documentation in different legal systems and cultures are: • Organizing, in a cost efficient manner, teams of outside local counsel in each jurisdiction who are knowledgeable, responsible and efficient. Note that even if a company is using a big international firm, this does not necessarily imply that all offices of such firm in all jurisdictions will be the best counsel possible for all types of acquisitions and mergers; • Choosing a formulae for earn-out portions of the price and management incentives which make sense in light of the business; • Obligatory application of national labor laws and collective bargaining agreements which

34 | Acquisition International | April 2014

•

•

•

•

•

could prevent or otherwise hinder post-merger/ acquisition reorganizations; Identification of the proper sector and applicable geographic region for noncompetition/anti-trust issues; Negotiating baskets, ceilings and carve outs for indemnification of breaches of warranties and declarations, as the laws and statute of limitations in different jurisdictions may be contradictory; Definitions of types of damages, such as indirect, consequential or other types of damages which do not exist “as such” in civil law jurisdictions; Choice of governing law and dispute resolution options, particularly in light of the existence and applicability of blocking statutes which can hinder effective discovery, cost of litigation, confidentiality and other factors such as the execution of judgments and asset location; and Timing and methodology of closings and signatures (electronic, in person, timing differences for wire transfers of price etc.).

The days of champagne toasts at closings in (unfortunately) less and less frequent.

acquired advantages of national collective bargaining agreements when two French enterprises with different national collective bargaining agreements merge, the impact of European Union and national laws, regulations and directives or decrees on environmental, social and regulatory matters such as antitrust, data privacy, and compliance, protective labor law provisions, obligatory employee consultations , applicability of internal ethical codes with whistle blower provisions and the like.

What works in a strictly Anglo Saxon legal world will not necessarily be appropriate in a civil law jurisdiction and may in fact be illegal.

Our best advice is to seek competent outside counsel, not only as legal service providers to negotiate and document the transaction, but also as business advisors who, by looking at the “big legal and economic picture” can save the business endless pre and post acquisition nightmares.

Each client’s business is different and each acquisition must be treated as unique. One size definitely does not fit all.

For example, in acquisitions and mergers of French businesses and companies, one must be mindful of the special rights of minority shareholders and employee representatives, the applicability of the value added tax to transferred assets as part of the purchase price, the difficulty of commercial lease termination, the

Company: Artus Wise Name: Salli Anne SWARTZ E Mail: sswartz@ArtusWise.com Address: 154, Boulevard Haussmann, Batiment B, 4ème étage, 75008 Paris – France Telephone: + 33 1 45 02 38 38 Fax: + 33 1 49 53 01 38

Profile QUALMS Group is a Technical Services Organisation dedicated to promoting business standards and reducing clients’ risks through the maintenance of quality, health and safety.

Through our range of technical services; Project Technical Staffing, Plant Maintenance and Shutdown, Site Construction and QHSE Training and Consulting to clients in Mining, Construction, Engineering, Oil & Gas, Manufacturing, Food Service and Hospitality industries.

Today, QUALMS Group corporate office is in Accra Ghana, serving it offices and project sites across Africa providing clients with wide-ranging expertise and access to thousands of project specialists and tradesmen for turnkey projects. Bringing clients integrated solutions to ensure QHSE and delivering on-time and to specification.

QUALMS Group remains one of the larger, Technical Services Organisation with a focus on local content development. QUALMS Group has staffed some of the most demanding projects in Construction, Mining, Engineering and QHSE in Africa.

ServiceS Portfolio QUALMS Group offers extensive capabilities through the following service lines;

project technical Staffing @

Contract Staffing

@

Assignment Support

@

Onboarding Services

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Local Content Training & Development

Site conStruction @

Fabrication

Delivering on-time anD to specification

@

Welding

Today’s major engineering and construction turnkey projects are increasingly more complex and demanding. QUALMS Group is committed to providing outstanding assignment support to clients through the entire lifecycle of project development and operations. QUALMS Group team are an experienced, knowledgeable and dedicated group of Engineering, Construction and QHSE related professionals all sharing backgrounds in the international resources industry from Human Resource management to turnkey mining, construction, engineering, oil & gas and project administration.

@

Conveyors

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Mechanical Piping & Pipefitting

@

Structural Steel Erecting / Rigging

our mission QUALMS Group take an integrated approach to project technical services, training and knowledge management to meet clients’ needs and promote business excellence by delivering on time and to specification. our vision Become the continent’s leader in technical services, quality and safety business solution providers, by creating and sustaining a long-term partnership with our clients and promoting compliance, reducing risk and continual improvements.

Plant Maintenance & Shutdown @

Shutdown & Outages

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Mechanical & Electrical (M&E)

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Custom Fabrication

QhSe training & conSulting @

Quality

@

Food Safety

@

Environmental

@

Occupational Health & Safety

auditS and aSSeSSMentS @

Gap Assessments

+233 (0)302 816 242 +233 (0)544 324 942

@

2nd Party Audits

@

Supply Assessment and Audits

info@qualmsconsult.com www.qualmsgroup.com

@

Supplier Quality Assurance

CONTACT

SECTOR SPOTLIGHT: Australia: A Global Platform for Growth

Australia: A Global Platform for Growth

The current business environment in Australia is positive with GDP growth in the Australian economy over the last quarter of in the region of 2.3%.

Business confidence and investment is relatively stable.

The Australian economy is well placed against many of the European, US and South American economies.

Australia’s GDP grew faster than expected in the three months to December 2013 at 0.8% (3.2% annualised).

Retail sales were strong. Australia’s interest rates for investment remain at an all time low, however there is likely to be slight rises in rates over the next later part of the year. The Australian property market has also seen positive growth over the past 12 months. The Australian dollar is back above 90 cents.

There are five great reasons to invest in the Australian economy.

1. 22 years of uninterrupted growth with Australia’s strong diverse and growing economy offering excellent opportunities underpinned by strong trade in Asia, Europe and the Americas.

2. Australia has a “AAA” rating by the three major global rating agencies and the GDP is projected to out perform every major advanced economy to 2018.

3. More than 80% of Australia’s economy is services based, despite the heavy focus on mining and resources.

Prudentia Legal is an incorporated law firm, established in Sydney and Melbourne and providing legal service to the clients throughout Australia.

The firm offers a wide range of services, from general legal practice to specific legal practice, including conveyancing, litigation, migration, finance, family and commercial legal matters.

More about some of the services offered by Prudentia Legal: Property Law: Property conveyancing, real estate development, commercial and retail leasing are among Prudentia’s strengths. The firm has extensive experience of drafting and providing legal advice and services on conveyancing agreements, contracts for individuals or company buyers, commercial and retail leases for commercial investors and real estate development applications for developers.

We firm has carried through complex projects and

36 | Acquisition International | April 2014

4. Australia has strong trade links and a highly educated multilingual workforce with eight out of Australia’s top ten export markets in Asia.

5. Australia’s westernised consumer culture makes it an excellent test market for products intended for launch in North America and Europe with a highly sophisticated corporate governance and franchising code which regulate businesses Australia wide rather than state by state. This uniform legislation provides efficiency to companies looking to enter the market, whether in Queensland, New South Wales or Western Australia.

Australian regulated transparent commercial environment makes it easy to establish and operate a business in Australia.

$130 billion in revenue annually with approximately 73,000 franchise businesses in Australia that employ approximately 400,000 people. Franchising has grown at a faster rate than any other small business and franchise businesses have seen average annual revenue growth of 10% per annum. The areas in franchising that are experiencing excellent potential and growth are aged care services, due to Australia’s aging populate, courier services, health and fitness and beauty, food retail.

Wisewould Mahony has over 30 years of experience in advising overseas companies and franchise business in Australia. We are a member of the International Franchise Lawyers Association (IFLA), the Franchise Council of Australia (FCA), Franchise Association of New Zealand (FANZ) and the US Commercial Service.

Wisewould Mahony act for a number of foreign companies having assisted them to establish their business operations in Australia by incorporating a new subsidiary entity or registering as a foreign company.

Wisewould Mahony also has the resources of reputable consultants and accountants that can assist overseas companies, conduct feasibility, due diligence enquires and provide tax and corporate compliance advice.

Key developing markets in the Australia are in tourism, science and technology, new energy and digital technologies.

Australia’s franchise industry turns over approximately

transactions of commercial and residential properties worth in total of over $10 million.

Immigration Law: Prudentia’s extensive understanding of foreign cultures and the multiculturalism of the community allow it to formulate visa solutions catered for individual situations and needs. The firm has extensive experience in the areas of family visas, general skill migration visas, working visa, student visa and business visas. The firm is also familiar with MRT, RRT and AAT procedure and rules.

Family Law: The firm understands that divorce is a stressful and traumatic event for most people. It has experienced family law practitioners, able to provide legal advice in divorce, annulment of marriages, financial agreement, property settlement, and parent arrangements.

Litigation: Prudentia focuses on finding effective, commercial, fast and affordable solutions to disputes and always

Company: Wisewould Mahony Lawyers Name: Robert Toth, Franchise Partner Email: Robert.Toth@wisemah.com.au Web: www.wisewouldmahony.com.au Address: Level 8, 419 Collins Street, Melbourne VIC 3000, AUSTRALIA Telephone: +61 3 9617 7297 Fax: +61 3 9629 8333

tries to keep the litigation costs to a minimum. With their experienced team in litigation, the firm is able to provide legal advice and services for individuals and corporations ranging from simple debt recovery or traffic offences, to complex shareholder disputes, international trade claims and criminal appeals.

Sydney Office Level 12, 37 Bligh Street, Sydney NSW 2000 Phone: (02) 8188 1983 Fax: (02) 8233 6199 Melbourne Office Level 4, 466-468 Little Lonsdale Street, Melbourne VIC 3000 Phone: (03) 9600 1688 Fax: (03) 9600 1868

DEEP & FAR Attorneys-at-Law 13th F1., No. 27, Sec. 3, Chung San N. Rd. Taipei 104, Taiwan, R.O.C. Tel: +886-2-2585-6688 Fax: +886-2-25989900/25978989 email@deepnfar.com.tw Deep & Far was founded in 1992 and is one of the largest law firms in this country.

The firm is presently focused on the practice in separate or in combination of all aspects of intellectual property rights (IPRs) including patents, trademarks, copyrights, trade secrets, unfair competition, and/or licensing, counseling, litigation and/ or transaction thereof. Since this firm edges itself into the IPRs field, the firm quickly comes to fame. As an illustration, this firm often is one of the largest sources from which foreign filing orders originate.

The fascinating rise of this firm begins from the founder of Deep & Far attorneysat-law, C. F. Tsai, who is the one first patent practitioner in this country who both has technological and law backgrounds and is qualified as a local attorney-at-law.

The patent attorneys and patent engineers in this firm normally hold outstanding and advanced degrees and are generally graduated from the top five universities in this country and/or the university in the US. Our prominent staffs are dedicated to provide the best quality service in IPRs. As a proof, about one half of top 100 incorporations in this country have experiences of seeking patented their techniques, but more than one fifth of the top 100 incorporations are/were clients of this firm.

Furthermore, Hi-Tech companies in the science-based industrial park located at Hsin Chu play an important role in booming the economy of this country. About one half of which have experiences in seeking patented their techniques, and out of more than 60% of the patent-experienced companies in that park have ever entrusted their IPR works to this firm.

We have experienced in seeking IPR-protections for our clients in more than 100 territories all over the world. We have thousands of IPR-cases respectively prosecuted before official Patent Offices of major industrialized countries.

This firm not only is the most competent in IPR-related matters in this country but also is very familiar with IPR-practices in major industrialized countries. As a matter of fact, this firm oftentimes tries and makes precedents of new claim-drafting styles. While we might have become wonderfully famed locally with remarkable appreciation and respects, we would like to extend our services for internationalized or quality service-requiring foreign conglomerated giants, corporations or individuals. We strongly believe that we will win more applause from clients all over the world.

www.deepnfar.com.tw

SECTOR SPOTLIGHT: China: The World’s Hot-Spot for Foreign Investment

China: The World’s Hot-Spot for Foreign Investment Michael Sheng is partner at Ashurst, Here, Michael speaks to AI magazine about the current economic environment in China, and the trends he has noticed emerging in the market.

-------------------------------------------------------------Ashurst is a leading international law firm with core business in M&A, corporate and structured finance.

Ashurst has the strength, depth, industry knowledge and jurisdictional reach necessary to provide high-quality advice to the world’s leading organisations, wherever they are located. We have provided legal services in China for more than 13 years. Our China practice focuses on all aspects of cross-border investment involving China. This includes advising foreign investors on their direct investments into China and mergers and acquisitions of Chinese companies and assets, as well as advising prominent Chinese companies on their investments overseas.

Current business environment in China China was ranked number 1 in the Foreign Direct

Investment (FDI) Confidence Index (an index that is created based on a survey of 300 plus executives from 28 countries and was established in 1998 by A.T Kearney, a leading global consulting firm) between 2001 and 2013 and number 2 since 2013. The double-digit growth in FDI (reported in January 2014 by the Ministry of Commerce of China) is a strong evidence that China’s investment environment is still favoured by foreign investors.

In the past, we have seen more foreign investment in the labour–intensive sectors such as manufacturing. However, in order to achieve its economic restructuring and under China’s 12th five- year plan, the Chinese government’s focus has been shifted from attracting FDI inflows towards fostering and developing several strategic emerging sectors (including conventional energy and new energy sectors).

For foreign clients considering investing in China, the key challenges would include understanding the China market.

We can help in meeting this challenge by offering practical and commercial solutions to clients’ proposed projects

In the past decade, mergers and acquisitions in China has seen unprecedented growth as China was somewhat removed from the global recession. In response, China has introduced a number of financial reforms and regulations. In addition, China is now in its sixth year of enforcing its Anti-Monopoly Law. China’s various antimonopoly agencies have obtained global importance given the strength of China’s economy.

While Chinese rules and regulations are similar to European laws in most respects, there are many unique aspects that set it apart, and given the inadequacy of many translations and the lack of published materials, it can be very difficult to navigate.

Given the relatively newness of AML laws and regulations, and mandates for constant reform, there is also a lack of precedent and clarity in many cases.

However, we at Zhong Lun Law Firm (recently awarded China National Law Firm of the Year by Chambers Global) are uniquely equipped to handle all these issues. Our services include the full range of M&A and antitrust and competition, such as merger control and trustee services. Zhong Lun offers a deep understanding of AML and merger filings, good rapport with Chinese antitrust agencies, and a wealth of past experience.

Many of our lawyers were involved in the making of the landmark precedent cases of China’s M&A and Antitrust & Competition legal history. I myself was involved in some of China’s biggest antitrust civil litigation cases as lead counsel, for example the Rainbow Medical v. Johnson & Johnson case and the Qihoo 360 v. Tencent case.

China’s goal is to become a society based on law, and with the increased deference to court decisions, it is imperative that any company with a significant presence in China should have the right legal strategy in matters of M&A and antitrust.

38 | Acquisition International | April 2014

because we understand the market and have extensive experience in advising on projects in China. For foreign investors that already have existing operations in China, the key challenges would include risk management, and we would be able to help them in meeting this challenge through measures such as maintaining an updated and robust internal compliance policy and operating compliance trainings.

Company: Zhong Lun Law Firm Name: Zhaoqi Cen, Partner Web: www.zhonglun.com/en/ Email: Cenzhaoqi@zhonglun.com Telephone: +86 10 5957 2288

Company: Ashurst Name: Michael Sheng, Partner Email: Michael.Sheng@ahsurst.com Telephone: +86 21 6263 1818

SECTOR SPOTLIGHT: Introducing 2014’s Most Regarded Insolvency Practitioners

Introducing 2014’s Most Regarded Insolvency Practitioners

Amura Partners is a leading Spanish firm formed by a team of professionals with extensive experience in the management of special corporate situations. Director, Vicente Canosa, tells AI more about the firm and its focus.

-------------------------------------------------------------Companies go through different periods throughout their life cycle. Periods of strong growth and development, periods of stability, and of course, periods of less growth and of crisis. In all these stages they are faced with changes that need to be well managed.

• With a comprehensive offer, ranging from the identification and analysis of measures or actions to their full implementation.

In these situations, we provide the experience, knowledge and involvement required:

Focus • A senior team with extensive professional experience who are highly specialised in various disciplines of corporate, strategic, industrial, commercial, HR and financial management.

• We provide and implement our services as a specialised firm, with the support and participation of all our partners.

• We provide all the capabilities needed to immediately integrate into the company’s management team to analyse, contrast, design and implement complex and nonrecurring plans along with the management team in record time.

• Independent and unconditional protection of our client interests.

• Exclusive focus on results, our fees are subject to our customers’ success.

• We specialise in processes of change.

• With a practical and professional approach.

• With a complete focus on results.

Much more than advice: management, implementation, experience, independence, accountability and results.

It is relatively common to see strong management teams who have invaluable experience in daily activities but are not completely prepared to face any of these situations of change, which result in critical or difficult times that may affect the value of the business.

Services: Amura Partners specialises in turnarounds, financial restructuring and acquisitions or divestitures of companies or business units.

The firm has a strong track record in financial and operational management and in supporting owners and management teams in managing insolvency proceedings and private equity transactions.

• Analysis and assessment of the company´s situation: Focused primarily on companies with below expected performance, the objective is to identify the causes of weak performance and obtain a clear view of the expected short and medium term effects in order to make more informed decisions.

• 100-day Action Plan: The objective is to support or reinforce the company’s management team, for the practical identification and implementation of urgent and necessary measures in order to maximise liquidity, value, and management’s efficiency in special or change situations. Assumption of CRO positions: independent, objective, external and focused on restructuring.

• Interim Management: Availability to temporarily strengthen the company’s management capacity in order to address special situations or projects or to cover the absence of sufficient management resources in key positions.

• Feasibility Plans: Advisory, preparation or presentation of Feasibility Plans, based on management experience in situations of crisis, restructuring or change.

• Company Directors: Assumption of Board of Directors responsibilities, assuming executive functions according to the interests of the shareholders.

Team The Amura Partners team includes five senior professionals with a strong experience and a successful track record in operational and financial management, including acquisitions and divestitures of companies or business units, management of restructurings or turnarounds and administration of companies in special situations.

For more information please refer to www.amurapartners.es

Company: Amura Partners Name: Vicente Canosa, Director Email: vcanosa@amurapartners.es Web: www.amurapartners.es Address: Lagasca 84, 6º D, 28001 Madrid Tel: 91 310 54 92 Mob: 609 06 72 37

Acquisition International | April 2014 | 41

SECTOR SPOTLIGHT: Introducing 2014’s Most Regarded Insolvency Practitioners Maury W. Bradsher is Chairman and CEO of District Equity, LLC, a multinational investment company with interests in a diversified portfolio of companies.

Maury explains more about the firm and what sets it aside from the rest.

-------------------------------------------------------------“We own and operate government contracting businesses,” he begins. “Some of our portfolio firms have been doing business with the government for over 30 years, so we understand the government environment and we’re comfortable with the pace of government contracting. Additionally, through surface level relationships we are in a strong position, which allows us to gain added insight into the industry. We take that positioning and insight and use it to help our portfolio companies restructure and recover from difficult periods.”

“We’ve invested in businesses that were losing accounts and had falling revenue. We helped refinance them, reposition them and re-deploy them into the commercial and government contracting spaces. In taking those steps we are able to get companies major partnerships, clearances, contract vehicles and help companies develop Intellectual Property they can use to continue to grow their business.”

Insolvency trends have shown a 2% increase in corporate insolvencies in 2013 due to the slowdown in the global economy, and Maury describes the methods used to ensure a successful outcome for clients.

“For us it starts with the people. It doesn’t matter who you know or what your capabilities are; if you’re

not good at the people process and putting the right people in the right place, the business will ultimately stall and a lot of times fail. So in order for us to ensure success, as part of the business evaluation, we start with making sure there’s a skill-set and cultural match. We do an extensive financial scrub and then we deploy our internal resources (HR/ Financial/ Proposal Writing/ IT/ Business Development). So we focus on the right people doing the right things in order to be successful and some of that takes time.

For instance, it can make for a challenging process when you partner with businesses and founder’s who are used to doing things a certain way and are a bit resistant to change. So what we try to do there is assuage the fear of the founder and let him or her know that by getting the right people in; the business gets a shot in the arm and the business is ultimately successful.”

Maury also has predictions for the insolvency jurisdiction in terms of insolvency for the coming 12 months.

“With shrinking budgets throughout the US government it leads to the cancellation and non-renewal of certain contracts which means it becomes harder for middle and lower middle market businesses to convince their banks and investors to increase lines of credit. By doing this it puts a heavy burden on these businesses and if they can’t refinance their debt it leads to increased insolvency cases.”

Campbells is Cayman’s leading independent law firm with over 40 years’ experience advising local and international clients on Cayman Islands law and regularly represents and advises large corporates and financial institutions in substantial international transactions and disputes.

-------------------------------------------------------------LITIGATION AND INSOLVENCY GROUP Our Litigation, Insolvency and Restructuring Group is widely recognised as a market leader in Cayman, and we have a strong and growing practice in the British Virgin Islands. The team’s 12 litigators have the experience and strength in depth to handle the largest and most complex disputes and liquidations, but we always ensure that each case is staffed appropriately and cost effectively to ensure value for our clients.

strong reputation in the litigation field and receives a steady stream of instructions relating to complex insolvency, shareholder disputes and trust matters” (Chambers & Partners, 2013); and “has the knowledge and experience to handle matters confidently and economically” (Legal 500, 2013).

The group deals with the full range of civil litigation for our international and local clients, but we are particularly well known for our expertise in insolvency and restructuring, investment fund litigation, shareholder disputes, and contentious trust work. We take pride in our responsiveness and levels of service, the quality of our advice and advocacy, and above all our long track record of achieving our clients’ objectives in and out of court.

Department head Ross McDonough is “very smart, grounded, direct and effective… he knows the law extremely well, is very practical in his suggestions and is very efficient in trials” (Chambers & Partners, 2014); “extremely incisive and experienced... one of the most well-recognised litigators in the Cayman Islands” (Chambers & Partners, 2013); and “brings keen insight and a commercial perspective to his advice and advocacy” (Legal 500, 2013). He is also ranked in Band 1 for dispute resolution.

(Chambers and Partners).

WHAT THE DIRECTORIES SAY Campbells has “a prominent reputation in the litigation field. Extensive experience in restructuring and insolvency cases, frequently representing an impressive client base of liquidators, distressed companies’ creditors or shareholders, and accounting firms. A popular choice for referral work amongst peers” (Chambers & Partners, 2014); “enjoys a

Chambers & Partners’ sources say: “They are really effective and really strategic – they’ve done a terrific job in every aspect of litigating, advising on strategy and Cayman law issues, and handling the Cayman aspects of litigation” (2014); “We would highly recommend them – they were very smart and efficient” (2014); “[we] found them to be very good. They are organised, thoughtful, they guide you through the process and give you recommendations on top of the advice” (2013).

Guy Manning is a “stupendously clever man, according to sources, and has quickly established an impressive reputation in the Cayman Islands” (Chambers & Partners, 2014); has “a strong presence in the market and is... extremely knowledgeable in the ins and outs of the legal system and how it applies to hedge funds”

TM

Company: District Equity, LLC Name: Maury W. Bradsher Email: info@districtequity.com Web Address: www.districtequity.com Address: 1100 17th Street, NW Suite 1140 Washington, DC 20036 Telephone: (202) 822-8100

(Chambers & Partners, 2013); and is ”effective at identifying potential issues with respect to Cayman law, and is very knowledgeable of local practices and customs” (Legal 500, 2013).

Alistair Walters is “an esteemed litigator” (Chambers & Partners, 2014) who gives “the legal perspectives with the business option. He is a good person to get straight advice from that is more than just legal advice — my first stop for any problems” (Chambers & Partners, 2013).

Ross, Guy and Alistair are also recognised by the International Who’s Who Legal as being three of only eight insolvency and restructuring experts in the jurisdiction. No other Cayman firm has more than one recognised lawyer in this area.

Company: Campbells Name: J. Ross McDonough Managing Partner and Head of Litigation Email: rmcdonough@campbells.com.ky Web: www.campbells.com.ky Address: PO Box 884, Grand Cayman KY1-1103, Cayman Islands Telephone: 345 949 2648 Direct: 345 914 5859 Cell: 345 525 5859 Fax: 345 949 8613

Acquisition International | April 2014 | 43

SECTOR SPOTLIGHT: The Gaming Industry: A Global Phenomenon

The Gaming Industry: A Global Phenomenon

Cristina Romero is Partner at LOYRA, a specialised gaming and entertainment boutique. She talks about the endless possibilities which present themselves within this sector, and how to stay ahead of the game.

-------------------------------------------------------------LOYRA has been active as a specialised gaming and entertainment boutique in Spain and LATAM for over 30 years and is a one stop shop providing both regulatory and corporate, tax, IP, structuring and licensing advice: Cristina’s banking background is key for acting as counsel on capital markets transactions and M&A, as well as for dealing with financial institutions and international

Company: LOYRA Name: Cristina Romero Email: Cristina.romero@loyra.com Web Address: www.loyra.com Address: Paseo de la Castellana, 144 Piso 13 A 28046 (Madrid) Telephone: +34 636 35 12 83

44 | Acquisition International | April 2014

investments. She has access, through a powerful network of well- established relationships to main stakeholders of the gaming and entertainment industry across many jurisdictions.

Romero describes the current gaming industry as “picking up from an all-time low” and attributes this to new regulation and M&A cross border activity, as well as integrated resort projects and gaming technology opportunities increasingly gaining investor interest.

Variation in the gaming industry has increased over recent years, with social and mobile gaming now playing a huge role in overall market growth.

Romero comments: “Well-sized integrated resort projects for Spain and LATAM present an interesting outlook. Customers are increasingly looking at “brick and click” platforms.

“There are challenges, including working towards a market-friendly regulatory framework, however these challenges can be met head on by increasing interaction with stakeholders in the industry, and bringing international investors to understand the many opportunities out here.”

The regions LOYRA covers have ample niche gaming industry opportunities, with much room for consolidation and growth. Most of them also benefit from legal certainty and from being key tourist destinations. The pull factors for investors also include a robust and stable framework.

However Romero admits that there are steps which need to be taken to ensure a maintained growth and a highly-competitive offering in this increasingly popular sector.

“Spain and LATAM countries are working on making their legal framework even more attractive to foreign investors. Gaming companies are expanding their international profile and working on innovative tools at a fast pace. First mover advantage will be key.

“History has shown that tapping into these markets requires a local partner and a lot of reliable pre- investment work. Gaming is a sensitive industry with many implications that reach out to a lot of stakeholders that should be managed in an effective and integrated way to bring a deal successfully over to the finish line.”

SECTOR SPOTLIGHT: The Gaming Industry: A Global Phenomenon Maria Cristina Machado Cortez & Heitor Carmássio Miranda -------------------------------------------------------------The Brazilian scenario: opportunities and challenges With a very relevant consumer base for video game products, the Brazilian videogame market is quite a relevant one: in 2012, approximately 30% of Brazilians owned video game consoles.

An outstanding increase in this market from 2012 to 2013 has led analysts to call Brazil the “goose that lay the golden eggs”.

Online game services are certainly among Brazilian games preferences, and although no research precisely reveals the number of Brazilian accessing such services, it is known that nowadays Brazil is the third country in number of active Internet users, and the first regarding time spent on Internet.

Playing by new rules: will online game services be affected by the Brazilian internet civil regulatory framework?

While the economic scenario seems prosperous for the online game services, the legal scenario might soon become challenging, as the so-called Brazilian Internet Civil Regulatory Framework – “Marco Civil da Internet” – might come into force in the upcoming months.

The Marco Civil da Internet The Marco Civil is a bill of law conceived to be the “Brazilian Internet Constitution”, setting principles and rules for the use of Internet in Brazil. It addresses Internet-related subjects such as net neutrality, freedom of speech, consumer protection, privacy and data protection and ISPs liability for user-generated content (UGC).

Even though it was not aimed at the game industry, it will inevitably affect every business performed through the Internet – including online game services. Such services will certainly qualify as Internet application ISPs under the Marco Civil, thus being subject to its strict legal obligations.

Accordingly, online game services will need to comply with the privacy and data protection rules of the Marco Civil – which represents a relevant change in the Brazilian legislation, since Brazil still does not have a data privacy law, differently from other Latin America jurisdictions. Regarding data retention, these services will have to keep access logs for a period of six months – if not otherwise requested by judicial order.

The Marco Civil will also contemplate rules on net neutrality, even though this issue remains under an intense arm wrestling dispute. Since online gaming demands more bandwidth than other services, the outcome of this matter shall directly affect the gaming industry.

Further, the provisions on ISPs’ liability for UGC might as well affect game services. Under the Marco Civil, ISPs will be held liable in case they fail to remove infringing content upon specific

judicial order – and this might be quite relevant on an interactive environment such as the online gaming one.

Finally, the obligation to retain data in datacenters within Brazil – once the biggest concerns in this bill of law – was excluded from the version approved by the House of Representatives. Nonetheless, this version kept the obligation of foreign companies to comply with local laws when collecting, storing or treating personal data in Brazil, provided that such companies have at least one entity of the same economic group established in Brazil.

The Marco Civil shall not impair the expected growth of the Brazilian video game market.

Nevertheless, online game services will certainly have to adapt to this new regulation, by amending their terms of use, privacy policies, marketing campaigns for compliance purposes

and even reviewing the current business models – especially if the datacenter requirement remains in the approved text of Marco Civil.

Andrioli Giacomini Porto e Cortez Advogados Company: Andrioli Giacomini Porto e Cortez Advogados Name: Maria Cristina Machado Cortez & Heitor Carmássio Miranda E Mail: aga@agaadvogados.com.br Web: www.agaadvogados.com.br Address: Rua Samuel Morse, 74, 7° andar Brooklin, São Paulo - SP, CEP 04576 060 Telephone: 55 11 5502 6740 Fax: 55 11 5502 6744

Acquisition International | April 2014 | 45

SECTOR SPOTLIGHT: Greece: A New Economy in the Making

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Greece: A New Economy in the Making

Founded in 1933 by Elias Paraskevas (1912-1991), widely referred to as the “Dean of Greek lawyers”, Elias Paraskevas Attorneys1933 consists of one of the most internationally minded Greek legal teams.

Elias Paraskevas Attorneys1933 is the only Greek law firm with a branch in London and an affiliate in Monaco. The firm’s clients include many of the leading multinational corporations, financial institutions, governments, international organizations, large stateowned concerns and private foundations.

Areas of practice: M&A and Privatisation / Banking, Finance and Capital Markets / Corporate Reorganisation and Restructuring / Dispute Resolution / Personal Tax and Private Clients.

After six (6) consecutive years of recession, which eroded more than a quarter of its GDP, the Greek economy is set to return to growth in 2014, while a series of leading indicators proves that the business climate is stabilizing after a long period of uncertainty.

On April 9, 2014 the Greek Government tapped the financial markets, drawing EUR 3bn in a bond issuance, after four (4) years in quarantine. The ATHEX General Index is now up approx. 175% compared to the bottom of June 2012, while the spreads of 10-year

Company: Elias Paraskevas Attorneys1933 Name: Dimitris E. Paraskevas Email: dparaskevas@paraskevaslaw.com Web: www.paraskevaslaw.com Address: 7 Asklepiou Street, 106 79 Athens, Greece Telephone: +30 210 36 10 333 ext. 102 Mob: +30 6937 19 19 00 Fax: +30 210 36 45 329

46 | Acquisition International | April 2014

Greek Government bonds are comparable to the ones prevailing before the beginning of the EU/IMF financial assistance program in 2010. FDI figures continued to increase in 2013, while the business climate indicator of DG ECFIN is now at 94.8, comparable to the rate prevailing in September 2008 before the global financial meltdown. Most importantly Greece has now after decades a primary fiscal surplus and a current account surplus, while recent legal reforms are set to increase the extraversion of Greek businesses (reference is hereby made to the new plan “Enterprise Greece”) creating hope for the establishment of sustainable export-led growth model.

However, at the same time unemployment is still at unusually high levels (27.5%), with youth unemployment reaching extreme levels (55.5%), 23.7% of Greeks were at the risk of poverty in 2013, the privatization program remains stagnating despite some modest progress in certain high-profile projects and the Greek economy still lags behind in competitiveness pursuant to WEF’s latest data despite a jump in the ratings of the World Bank with regard to the sub-category of starting of a new business. This shows that Greece still has a long way to cover before the wounds of the crisis are healed for good.

The transformation of the Greek economy though creates opportunities for investors in an array of industries, providing the potential for returns that may not be easily found in the developed world.

Greece benefits from large inflows from the European Investment Bank/European Investment Fund and thus it is forecasted that opportunities will arise in the near future for investors in the energy and infrastructure sectors, whereto the EIB/EIF flows are mainly channelled.

Tourism remains the backbone of the Greek economy and projections indicate that growth in this sector will continue in 2014 creating opportunities for investments in hotels, whose values, as with all residential and commercial real estate in Greece, have been depreciated

greatly since the beginning of the crisis. Considerable growth is expected in the coming years in the logistics sector, particularly given the government’s plans – reflected in a recent bill- to turn Greece into a logistics hub for Southeastern Europe. Banking equity is another field where activity has been observed lately and in the aftermath of the latest stress tests conducted by the Bank of Greece in the banking sector it is expected that the Greek systemic banks will go for a new round of seasoned equity offerings, wherein opportunities will lie for investors. The foreign funds that participated in the latest recapitalisation programs of the Greek banks are expected to increase their stakes in the new rounds, while new funds seem to be interested in joining them.

In accordance with the rise in the ATHEX General Index many funds have eyed high returns in listed Greek companies, so activity in this field has also heightened and is expected to heighten further.

In line with the economic environment described above, legal work has also undergone transformations.

During 2013 we represented –for the first time in years- many new investors in real estate, listed and private companies and green field investments. At Elias Paraskevas Attorneys1933 recent work has also focused on large-scale restructurings, where we advised on the largest cases ever in the private and public sectors and the restructuring of banks in Greece, Cyprus, Germany and Ireland together with foreign counsel, on multi-jurisdictional distress and insolvency litigation and debt collection, privatization finance and international tax planning. At the same time during 2013 we also preserved our traditionally strong position in M&A, as we have been involved in three over $1bn transactions including the largest one in the world, the largest one in the jurisdiction and the largest one in the automotive industry and in Banking, Finance & Capital Markets, where among else we advised on the largest programme of SMEs financing in the country, complex derivatives and alternative investment funds.

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SECTOR SPOTLIGHT: Measuring the Pulse of Africa’s Economy

Measuring the Pulse of Africa’s Economy Jason Kazilimani Jr is the Senior Partner and Chief Executive of KPMG in Zambia.

----------------------------------------------------------------Jason begins by describing the current environment in Zambia.

“I would describe the current business environment in Zambia as among the most attractive in the world,” he enthuses. “We’ve enjoyed a decade of sustained economic growth and the ongoing investment in key road, rail and power infrastructure will establish a platform from which to continue this impressive trend.

“This country offers political stability, a rich resource base and rapidly expanding markets. It’s also worth noting that many of the leading companies in the region have their most profitable operations located here. What’s more impressive is that this profitability is not limited to one or two sectors, it’s a cross cutting trend.

“Another positive for would be investors is that we boast a social and ethnic togetherness that’s the envy of all of our neighbours. Zambia has 72 different tribes that live and work peacefully together.”

Key sectors enjoying strong growth in Zambia include mining, construction and agriculture which Jason explains has been this way for the last five years and looks set to continue.

“Zambia is synonymous with mining so it’s a natural choice for investors especially with the good copper prices that have been obtaining over the past few years. However, construction and agriculture are among the fastest growing industries in the country.”

The recent growth that Africa has enjoyed is attributable in part to economic challenges in the West, but Jason states that these have had a positive outcome: “The global economic crisis made a few key investors look at Africa for the first time and say to themselves,’’ let’s take a calculated risk’’.

They’ve done very well and we are reaping the benefits of a new wave of optimism in Africa.”

Company: KPMG Zambia Limited Name: Jason Kazilimani, Jr Email: jkazilimani@kpmg.com Web Address: http://www.kpmg.com/zm Address: KPMG Zambia, First Floor, Elunda Two Addis Ababa Roundabout, Rhodespark, Lusaka, P.O Box 31282, Lusaka, Zambia Telephone: +260211372900

48 | Acquisition International | April 2014

SECTOR SPOTLIGHT: Measuring the Pulse of Africa’s Economy

Felix Ntrakwah is founder of Ntrakwah & Co. He speaks to AI about the current climate in Ghana.

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

ventures, company formation and privatisation of state enterprises. In litigation the firm represents clients in corporate, commercial and constitutional law cases.”

Mr Ntrakwah explains more about the firm and its background.

Apart from advising private investors and drafting the relevant documents in relation to multi-million dollar acquisitions, Ntrakwah & Co. has, in association with other professionals, been involved in conducting the sellers due diligence for some state institutions in Ghana and other West African countries in preparation for the privatization of some state enterprises.

The firm was established in 1984 to take over the practice of Mr. Felix Ntrakwah which he started in 1981, after leaving the civil service as an Assistant Registrar General of Companies, Trademarks, Patents and Designs. The firm has made tremendous strides and established the name Ntrakwah & Co. in Commercial, Corporate, Intellectual Property, Investment Laws practice. The clients of the firm include major Ghanaian, foreign and international financial and industrial corporate bodies.

Foreign investors and financial institutions have benefited from legal opinion and due diligence prepared by Ntrakwah & Co. “The firm has rendered various professional services in relation to foreign financed joint

“Ntrakwah & Co. is a household name in corporate and commercial law practice. The firm is known for its professionalism and integrity in its areas of practice. It comprises a team of lawyers with both local and international training.”

Mr Ntrakwah says that Ghana is a very investment-friendly destination and tells us more about the country as an economic hub and about the activity he has seen emerging recently.

“Ghana has for many years been known to be relatively self-sufficient in energy supply and as an exporter of energy. However, recent requirements of industry demand that the challenges in power supply should be addressed.

“The agricultural sector, financial services, mining and oil and gas have seen a lot of activities.

Currently the greatest opportunities lie in the power and energy sector, agricultural and manufacturing sector.”

Company: Ntrakwah and Company Name: Felix Ntrakwah Email: ntrakwahlawoffice@yahoo.com or felix@ntrakwahandco.com Web Address: www.ntrakwahandco.com Address: F. 37 Labone Crescent, Labone, Accra, P.o.box 12556 Accra –North Telephone: 0302 760776

Online readers please click here.

Acquisition International | April 2014 | 49

SECTOR SPOTLIGHT: 2014: Growth and Trends in Relocation

2014: Growth and Trends in Relocation Making the Most of Global Mobility Global trade has undoubtedly transformed the world of business and a positive outlook for Britain’s future export market1 means this trend is set to continue.

Worldwide trade requires an international workforce, and Britain is now leading the way in the export of skilled talent. In fact, according to recent research2 the UK is now Europe’s largest exporter of talent.

The lure of relocating has been attributed to the ease of global mobility in the modern age3, perhaps proven by the 1.16 million UK nationals recorded as living overseas last year.

Peter Sewell, Regional Director, at Crown World Mobility, explained: “Investigating the trend of relocation further is essential in order for businesses to future-proof their business – particularly as the positive figures don’t necessarily mean all countries have an equal appeal.”

“Some nations which previously saw Britons flock to their shores are experiencing fluctuations in this

Company: Crown World Mobility Name: Peter Sewell Web site: www.crownworldmobility.com

50 | Acquisition International | April 2014

demand. At Crown World Mobility, we’ve noticed this trend affecting Australia in particular, where we’ve seen a drop in expats of 23.4% over the past year. This followed the introduction of tighter visa requirements, which were announced in response to rising unemployment for nationals within the country.”

The desire to move abroad is still strong with Briton’s however, and whilst some countries have seen demand falter, professionals are exploring other opportunities elsewhere, in continents which are experiencing growth and showing promise for the future. Countries such as the USA, New Zealand, Canada and the UAE are emerging as some of the more popular destinations for UK expatriates. These countries boast a similar lifestyle to Australia and their lure could also be due in part to the growth of various industries.

Canada’s energy industry has shown green shoots of promise for the future. Moreover, the country provides a welcome opportunity for British workers to experience life abroad, as the nation looks to encourage 15,000 more expats into the country over the next year. This forms part of a wider plan to encourage future economic growth and build upon the existing success seen within the nation’s top industries of energy, manufacturing and agricultural exports. In Dubai and Qater, opportunities in the construction sector are also rife.

“Alongside countries which have cultures similar to Britain, we’ve noticed new trends emerging as Britons move to destinations which might have previously been

perceived as less desirable,” continued Peter. “Africa is one example, with many of our clients branching into the continent.”

“Whilst Africa is showing appeal to professionals, a move can prove problematic due to extensive variances to the rest of the world. Alongside the business issues associated with a move to the country, potential employees can be put off moving due to differences in culture and its security infrastructure. Professionals moving to the country therefore need support, guidance and reassurance in order to ensure they have a successful assignment.”

Finding ways to overcome negative issues can make the difference when trying to encourage top talent to consider a career abroad. Spousal, immigration and relocation support can make a big difference in helping professionals to settle into a new life abroad.

Peter concluded: “It’s expected that by 2017 UK expatriates abroad will number approximately 1.21 million. If businesses can help potential new talent overcome their concerns, the benefits to their international expansion and growth from these enthusiastic new recruits stand to be beneficial.”

1 2

3

HSBC Global Trade Forecast, published October 2013 Finaccord report, published February 2014, available: http:// www.telegraph.co.uk/expat/expatnews/10614636/Britain-isthe-biggest-exporter-of-people-in-the-EU.html Finaccord report, published February 2014, available: http:// www.telegraph.co.uk/expat/expatnews/10614636/Britain-isthe-biggest-exporter-of-people-in-the-EU.html

SECTOR SPOTLIGHT: 2014: Growth and Trends in Relocation The current business situation in Germany is quite satisfying. As Germany could make it through the financial crisis astonishingly well, companies from all over the world are entering the German market in order to realise sizeable business opportunities.

However, one of the challenges they face is a skills shortage in some sectors. Qualified technical workers (engineers, IT and health specialists) are in particularly short supply.

Some companies address this challenge by planning their market entry through joint ventures or M&A. In a country where critical skill shortages intensify, competition for recruiting and retaining the best and smartest employees, professional group move relocation services are key throughout the M&A process.

The difference between good enough and excellent relocation services Relocation services can make essential contributions to a company’s success – if carried out with a focus on attention to detail, quality and empathy. Empathy and the ability to take another person’s perspective often make the difference between a good enough and an excellent relocation service provider. These are mission critical factors of success of international assignments and the whole project. Let us take the situation of an expatriate that goes on assignment with his/her family.

Traditionally all the planning is around the potential assignee and the family is not in the focus of the project.

The following suggestion of a change in perspective often causes amazement followed by enthusiasm: “Imagine, we will send a family abroad, of which one person ‘by coincidence’ happens to work in our company.”

This change of perspective can set free enormous energies of responsibility and care towards the employee. And with this holistic view, RSB offers the full range relocation services with orientation, home search, settling-in and immigration issues, including the social and intercultural preparation.

It is quite obvious that during the M&A phase company leaders focus on strategic and financial factors– which were the original reasons for the deal. They cannot take enough care of the human element. Often a relocation following the merger or the acquisition is necessary, therefore mobility of whole groups of employees - including their families - is mission critical. Retention of talented people will be the decisive competitive advantage for future economic success and will maximise potential and profitability.

A well planned and personalised group move support program increases chances that top skilled personnel can be retained and will say yes to relocation. It is important to realise that this approach is more than just a feel-good-strategy - it is risk management with the clear goal to lower reluctance to relocate. During the earliest possible stages an experienced relocation service should be involved in strategic discussions, identifying potential problems and preparing possible solutions.

processes and improving quality at the same time.

As a first ‘player’ in the industry, RSB facilitates the planning and budget calculation by a tailor-made uniform price worldwide for frequently ordered services like orientation, home search and settling in.

HR departments can react much faster by knowing that these services cost the same whether it is in Italy, Sweden, South Africa or Mexico. This does not mean that relocation service is a commodity. As before, the job is to settle an expatriate and his family as smoothly as possible to his new home, including a suitable housing, prompt and proper filings with authorities, kindergartens and schools and other supporting services.

Due to the events in Crimea, the confidence of German companies in future business development fell slightly, the majority however seems to remain optimistic about the export business. We intend to capitalise on cross-border opportunities by simplifying

RSB Deutschland GmbH Founded in 1990 by Helmut Berg, RSB Deutschland GmbH is one of the first and leading providers of relocation services in Germany and Austria. About 30 staff at headquarters and more than 140 freelancers in

over 70 cities form a dense network of social and local expertise. At an international level RSB can support companies on assignments in over 100 countries through membership in various global mobility networks.

Company: RSB Deutschland GmbH Name: Helmut Berg Email: helmut.berg@rsb-relocation.de Web: www.rsb-relocation.de Address: Dreieichstr. 59, 60594 Frankfurt, M., Deutschland, Germany Telephone: +49-(0)69-61 09 47 - 0

Acquisition International | April 2014 | 51

SECTOR SPOTLIGHT: Canada: A Resilient Globalised Economy

Canada: A Resilient Globalised Economy

KSA Attorneys is a firm that prides itself on loyalty.

Deep loyalty to its clients and to its environment. This is what distinguishes it.

Company: KSA Attorneys LLP Web: www.ksavocats.com/en Address: 5790, Étienne-Dallaire Boulevard, Suite 205, Lévis (Québec), G6V 8V6 Telephone: 418 838-5500 Fax: 418 838-5518

Located in Lévis, near Quebec City, KSA is dedicated to the service of small and medium size businesses, manufacturing businesses, construction businesses, financial institutions and public and parapublic institutions.

KSA boasts more than 20 professional, passionate and dedicated law professionals who practice in sectors as diverse as Business Law, Construction Law, Environmental Law, Entertainment and Intellectual Property Law, Civil and Commercial Litigation, Bankruptcy and Insolvency Law as well as Labour and Administrative Law. Most of the firm’s lawyers are bilingual and regularly perform work outside the province of Quebec and even abroad. Some also have a complementary education in common law or business management and are members of the Law Society of Upper Canada

or similar professional orders, such as the Ordre des Ingénieurs du Québec.

KSA’s Counsel, Serge Kronström, started his practice with his father Roger Kronström and the firm relies on a combination of experienced lawyers with more than 30 years or practice and a dynamic team of young professionals devoted to customer service.

KSA Attorneys was created with one vision in mind – the unwavering commitment of all its partners and team to provide clients with a high quality service that is always courteous and, most importantly, tailored to their needs.

Geared towards meeting the client’s objectives, KSA’s lawyers combine professionalism and creativity to ensure that the firm constantly exceeds the expectations of every single one of its clients.

The Improving Climate for SOE Investment in Canada’s Resource Sector

By Peter Glossop & Frank Turner ----------------------------------------------------------------------

Company: Osler, Hoskin & Harcourt LLP Name: Peter Glossop & Frank Turner Email: pglossop@osler.com / fturner@osler.com Web: www.osler.com Address: 100 King Street West, 1 First Canadian Place, Suite 4600, P.O. Box 50, Toronto ON M5X 1B8 Telephone: 416.362.2111 Fax: 416.862.6666

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Canada’s vast energy resources require significant investment to unlock their full potential beyond what Canada’s own capital markets can provide. Accordingly, foreign investment must be accessed. More than $50 billion has been invested in western Canadian oil and gas projects by Asian state-owned enterprises (“SOEs”) with more than $28 billion of investment coming in 2012 alone. The availability of SOE capital has been one of the drivers of the growth in the Canadian oil and gas sector.

In 2013, SOE investment in the sector declined precipitously due in part to policy changes under the Investment Canada Act announced at the end of 2012 which placed limited restrictions on SOEs investing in Canada. Other reasons for the decline include concerns regarding the pace of the infrastructure development, the availability and timing of required regulatory approvals and uncertainty regarding the price that energy products will receive in international markets.

The relative absence of new SOE capital in the Canadian oil and gas sector in 2013 represented a serious

impediment to the growth plans of many Canadian energy enterprises.

However, 2013 saw material progress in addressing some of the issues that were deterring further SOE investment.

Representatives of both the federal and provincial government made concerted efforts to convince the SOE community that Canada continues to welcome foreign investment and that many forms of investment continue to fall outside the new policy changes. These efforts appeared to be gaining some traction at year end.

In addition, concerns about the pace of infrastructure development appeared to be lessening somewhat in light of positive movement in public support for infrastructure projects combined with the Government’s commitment to shorten timelines for regulatory approvals. Further, certain prominent SOEs affirmed their commitment to the Canadian energy projects in which they were invested.

Accordingly, there is reason to be optimistic that there will be significantly more SOE investment in the Canadian oil and gas sector in 2014, albeit not at levels seen in 2012.

SECTOR SPOTLIGHT: Regional Review

Regional Review: Acquisition International highlights key issues in a variety of jurisdictions from around the world, with expert commentary from leading players.

Acquisition International | April 2014 | 53

SECTOR SPOTLIGHT: Arbitration Seats: Weighing Up the Pros and Cons

Arbitration Seats: Weighing Up the Pros and Cons

Dr. Karim Youssef is Partner and Head of Middle East Arbitration at Amereller Legal Consultants.

-------------------------------------------------------------Amereller Legal Consultants is an international law firm with offices throughout the Middle East (including Dubai, Cairo, Syria, Iraq) and Germany.

Dr. Youssef heads the firm’s arbitration practice in the Middle East, with focus on Cairo and Dubai. The powerhouse of the arbitration group is located in Cairo. The firm represents many international and local companies, national and international government organizations and State entities in the MENA region, but also regularly act for European, American, and Asian clients.

Dr. Youssef’s practice focuses on international commercial arbitration, international law and investment arbitration. He has extensive experience in complex and multiparty arbitrations, and handles complex multijurisdictional disputes. He represents local and international parties both in large domestic and international arbitrations, under a variety of arbitration rules and has acted in some of Egypt’s highest profile cases.

Karim Youssef serves regularly as an arbitrator in domestic and international proceedings, ad hoc (UNCITRAL) and institutional. He also acts as expert in arbitral and foreign court proceedings, in particular on matters of Egyptian and Arab laws.

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Dr Youssef describes the legal and practical infrastructure of his jurisdiction as an arbitration seat, and how Egyptian arbitration differentiates.

“Cairo has the baseline legal infrastructure you would expect in a modern arbitration jurisdiction: A modern arbitration law -- by that I mean inspired from the UNCITRAL Model Law – (Law No. 27 for 1994 Promulgating the Law Concerning Arbitration in Civil and Commercial Matters, as last amended by Law No. 8/2000). Egypt was also one of the earliest signatories of the New York Convention (March 9, 1959), and has signed the ICSID Convention on February 11, 1972.

“Beyond that baseline, the practical infrastructure is there as well. The Cairo Regional Centre is a reputable institution which offers state of the art services and compare favourably to known regional institutions. Certain technical services, such as transcribing services, one would hope would become more developed.”

“The Egyptian Arbitration (Law No. 27 of 1994) is inspired from the UNCITRAL Model Law. However, the law is not a literal adoption of the Model Law. There is an Egyptian twist to the law, I would say, with some provisions which depart from the Model Law. One of them is the ground of challenge of awards based on the failure of the Tribunal to apply the law agreed by the parties, which in practice operates in a way similar to the US manifest disregard of the law.

“It is fair to say that since the introduction of the Arbitration Law (Law No. 27 of 1994), Egypt is a rising and friendly arbitration jurisdiction. In recent years, Cairo has become a more popular seat, and from my practice, not only for purely Egyptian cases, but also for Arab-Arab or Egyptian-European arbitrations. I have to say a significant part of that is structural, and is owed to Egypt as crossroads of legal cultures in the Middle East, but also a significant part of that is owed to the rise, in recent years, of the Cairo Regional Centre as a prime regional centre. The Rules of the centre were revised in 2010 and the caseload of the centre grows steadily.

“My expectation is that the future is bright for Cairo. Cairo would continue to grow as an arbitration seat.”

Company: MENA ASSOCIATES in association with Amereller Legal Consultants Name: Dr. Karim Youssef, Partner, Head of Middle East Arbitration Email: kyy@amereller.com Web Address: www.amereller.com Address: 21 GIC Tower, Soliman Abaza St., Mohandiseen, Cairo, Egypt Telephone: +20(2)37626201

SECTOR SPOTLIGHT: Regulating Competition Disputes

Regulating Competition Disputes

Samir Gandhi is a partner at AZB & Partners’ New Delhi office, where he deals with a range of competition, antitrust, international trade and WTO issues. Who’s Who Legal 2013 lists him as a leading competition practitioner in India.

---------------------------------------------------------------------AZB & Partners (‘the Firm’) is closely associated with the development and practice of competition law in India. The Firm participated in the consultation process leading up to the framing of merger control regulations under the Competition Act 2002 (‘CA02’) and has since interacted closely with the Government of India (‘GoI’) and the Competition Commission of India (‘CCI’), India’s competition regulator. Most recently the Firm assisted the Confederation of Indian Industries in making representations to a Parliament of India Committee on the proposed amendments to the CA02.

The first quarter of 2014 has witnessed significant developments in competition law and policy in India.

On 28 March 2014, the CCI introduced certain changes to the CCI (Procedure in Regard to the Transaction of Business Relating to Combinations) Regulations, 2011) (‘Combination Regulations’). Some of the key changes include the introduction of a substantive test for pre-merger filing assessment and deletion of the exemption available to entirely off-shore transactions with insignificant nexus to India from the prior notification requirement. The CCI would now have the unfettered powers to look beyond the structure

of a transaction and examine the ‘substance’ of a transaction while assessing whether it requires prior notification. The CCI has also increased the filing fees for Form I, from INR 1 million to INR 1.5 million and for Form II, from INR 4 million to INR 5 million.

On the enforcement front, the CCI has recently imposed a penalty of INR 38.1 million on Hiranandani Hospital for restricting the patients availing maternity services at the hospitals from using the services of a stem cell bank of their choice. In the process, the CCI has clarified that the scope of Section 3 of the CA02 is broad and that the disciplines on horizontal agreements under Section 3(3) and vertical agreements under Section 3(4) of the CA02 do not restrict the CCI from looking at agreements that do not necessarily fall within the two categories. In another interesting development, the CCI has initiated an inquiry against the construction equipment manufacturer, JCB India Ltd. for allegedly abusing its dominant position by engaging in false and vexatious litigation. This would be the first case in India on the issue of sham litigation as an antitrust violation.

While the CCI appears to have ramped up its enforcement activities, it has also suffered a significant setback. In a recent decision, the Competition Appellate Tribunal (‘COMPAT’) has set aside one of the most important decisions of the CCI till date on the issue of abuse of dominance. In March 2013, the

CCI had found Schott India Private Limited (‘Schott India’), the Indian subsidiary of the German speciality glass maker Schott AG guilty of abusing its dominant position by offering rebates and discounts and engaging in tied in sale of two different types of glass tubes and imposed a penalty of INR 5.66 million on Schott India. While overturning the CCI’s decision, the COMPAT held that for a pricing or discount scheme to be discriminatory and hence abusive, it must result in discrimination between two equal transactions and vice-versa. The COMPAT also disagreed with the CCI’s decision on tied- in sales and functional discounts because it had relied on oral testimonies from certain downstream users of glass tubes without extending the opportunity to Schott India to cross-examine them.

The decision marks the need for the CCI to streamline its investigative procedures and conduct more robust economic assessment.

Company: AZB & Partners Name: Samir Gandhi Web: http://www.azbpartners.com/

Acquisition International | April 2014 | 55

Asset Sale of the only Steel Mill in the Baltic States The insolvent joint stock company “Liepajas Metalurgs”, incorporated in Republic of Latvia, Brivibas street 93, Liepaja, LV-3401 (hereinafter the “Company”), represented by its administrator Haralds Velmers (hereinafter the “Administrator”) invites all interested investors (hereinafter the “Investors”) for submission of non-binding expression of interest to participate in the sale of steel mill assets (hereinafter the “Process”) owned by the Company.

The main factors in the selection process of investor will be (1) the purchase price and its payment conditions, (2) the strategic rationale and integration, as well as investor’s reputation and experience, and (3) the availability and source of financial resources. The Company stopped the operations of steel mill in May 2013 due to lack of working capital and the ensuing Company’s insolvency process was initiated by the court in November 2013. With the availability of required financing from the creditors of the Company, Administrator has ensured that the equipment of steel mill is being maintained in operational condition and is in position to be fully operational in short time after purchased by Investor.

According to the approved transaction structure it is expected that the investor will be offered to purchase a consolidated asset package including real estate and equipment required for operations of steel mill, as well as the legal entity operating in deep water unfreezing port.

All information inquiries and correspondence should be addressed to the financial advisor of the Administrator AS IBS “Prudentia”, addressed to Mr. Karlis Krastins, AS IBS Prudentia, 2a Republikas square, Riga, LV-1010, Latvia, email: investorsLM@prudentia.lv After the confirmation of the initial interest, all potential investors will be provided with a non-confidential investment overview. Detailed information and visits to Company will be available after signing a non-disclosure agreement. The deadline for submission of non-binding offers for the purchase of the Company’s steel mill assets is set at June 13th, 2014.

The Administrator reserves the right to select and not to enter into any agreement with an Investor in the Process without liability for any damages. Furthermore the Administrator reserves the right to stop or amend the Process and, or the timetable, or other elements of the Process on their discretion and without any explanation. In case of such exclusion the Advisor will send written notice to the Investor on the behalf of the Administrator. Investors agree on these terms with their participation in the process.

Information on the steel mill of the Company: l Steel mill is located in Liepaja city, Latvia, a member of the European Union and euro zone. It has strategically good location and connection to CIS countries and EU countries by all strategic means of transport, providing efficient logistics solutions for supplies of raw materials and sales of ready products. l Part of the consolidated asset package available to Investors include a stevedore company operating in port of Liepaja – a deep water unfreezing port, perfectly suitable for supporting the steel mill’s operations by handling the raw materials and ready products for export. l Steel mill has direct access to port by railway (distance of 2 km) and direct connection to main railway network of Latvia that allows to deliver raw materials straight to the plant. Also geographic location in EU, close proximity to CIS countries are very favorable factors in terms of cost effective delivery. l The scrap supply from the Baltic States reach up to 0.8 - 1 million tons annually, which amounts to 80-90% of the necessary scrap for maximum production of steel mill. Also other scrap export countries are close and can provide low freight costs. l Steel mill has the newest technology electric arc furnace, which was commissioned in September 2011 by STG Group (Italy) and can be considered as one of the most modern and efficient melt shops in Europe.

SECTOR SPOTLIGHT: New Developments in Belarusian Competition Law on M&A issues

New Developments in Belarusian Competition Law on M&A Issues

By: Tatiana Ignatovskaya, Partner at law firm “Stepanovski, Papakul & partners” Maxim Nikolaev, Counsel at law firm “Stepanovski, Papakul & partners” -------------------------------------------------------------The Belarusian Act Against Restraints of Competition (The Law of the Republic of Belarus ‘On Counteraction To Monopolistic Activity And Development Of Competition’ – known as the ‘Competition Act’) has been in force since 1992.

During a process of harmonisation with the regulatory frameworks of the Common Economic Space of the Russian Federation, the Republic of Belarus, and the Republic of Kazakhstan, the new Competition Act was finally adopted in December 2013 and will come into force on July 1, 2014.

One of the most important new provisions of the Competition Act is the imposition of new requirements and thresholds for merger control tests and the requirement of prior consent

on concentration deals from the Competition Authority. At the moment, only concentration deals involving more than 30% of market share, majority share deals of more than 25%, or direct control require the prior consent of the Competition Authority.

natural monopoly. Persons who, in the terms of Competition Act, are members of a group are exempt from obtaining prior consent on concentration deals and need only notify the Competition Authority.

After July 1, 2014, however, additional factors, including balance sheet assets value (more than 100,000 base rates – approx. €1m) and annual revenue (more than 200,000 base rates – approx. €2m) will also be taken into account.

The new Competition Act calls for a more detailed determination of dominant position (commonly more than 35% market shares, but other more complex criteria can be applied) and actions treated as abuse of dominant position.

At the same time, despite the application of other criteria, the legal entity or individual entrepreneur cannot be treated as dominated if its market share does not exceed 15%.

The last does not apply to the legal entity or individual entrepreneur who registered as

Company: Stepanovski, Papakul & partners Name: Tatiana Ignatovskaya, Maxim Nikolaev Address: 16 Kuibyshev Street, 4th Floor, 220029 Minsk, Belarus Email: info@spplaw.by Web: http://spplaw.by Telephone: +375 17 209 44 83

Acquisition International | April 2014 | 57

SECTOR SPOTLIGHT: The Bahamas: A Paradise for Many Reasons

The Bahamas: A Paradise for Many Reasons

Laura Harris is a Senior Associate at Lennox Paton, based in The Bahamas. Ms. Harris explains to Acquisition International more about the law firm and its areas of specialism.

The Bahamas is a mature, politically stable and independent offshore financial centre. The Bahamas has a modern and business friendly legislative and regulatory regime. It offers sophisticated structures including International Business Companies, Foundations, Trusts, Private Investment Funds and Limited Partnerships, administered by a highly qualified financial community. The Bahamas is tax neutral, with no Income, Capital Gains, Estate or Inheritance taxes, and no withholding tax on dividends or interest.

Lennox Paton is a leading offshore, full service commercial law firm with offices in Nassau, The British Virgin Islands and London. It is recommended

by Chambers & Partners and consistently ranked as a Tier 1 firm in The Bahamas by the IFLR 1000 Leading Lawyers Guide.

The Firm has approximately 25 attorneys and 50 support staff making it among the largest in The Bahamas. Lawyers in the firm are frequent contributors to various professional journals, speakers at conferences and seminars, members of Government and industry appointed task forces, committees and statutory bodies and are published authors.

The Firm is widely recognized for its expertise, professionalism, responsiveness and commitment to excellence.

The Firm represents numerous financial institutions, both domestic and international, which complements the Firm’s large and diversified private client practice.

Company: Lennox Paton Name: Laura D Harris Position: Senior Associate Email: lharris@lennoxpaton.com and/or info@lennoxpaton.com Web Address: www.lennoxpaton.com

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The Private Client Group provides comprehensive legal advice and services to clients with respect to the establishment of private investment companies, trusts, estate planning, real estate acquisition and immigration.

The Banking and Finance Group represents and assists clients in all areas of regulation for financial institutions in The Bahamas.

The Corporate and Commercial Group has extensive experience in advising on the establishment of special purpose vehicles in The Bahamas including holding companies, limited partnerships and trusts for the holding and management of investment portfolios and assets. The Group also advises clients on mergers and acquisitions, joint ventures and disposals.

The Trust Group has a wealth of experience in relation to complex estate planning using trusts, foundations, private trust companies and holding companies, as well as on matters relating to the construction of trust structures and the administration of trusts.

The Real Estate Group advises on all aspects of residential and commercial real estate transactions, individual and project financing.

The Shipping Group provides advice to international law firms and major banks on a variety of ship finance transactions involving vessel and yacht registrations, mortgage registrations and sale and purchase.

SECTOR SPOTLIGHT: Cyprus: On the Road to an Economic Miracle

Cyprus: On the Road to an Economic Miracle

Nandia Savvides Zannetou is Director at N. Savvides Zannetou LLC. Zannetou tells us more about the climate in Cyprus and the opportunities it presents.

-------------------------------------------------------------N. Savvides Zannetou LLC is a “boutique” law firm, specialising in the incorporation of companies in the shipping sector, real estate and general trade and registration of vessels under the Cyprus flag. It is a small firm, offering a very personal touch to the services offered. Through its co-operation with Schwenke and Partners, Hamburg and Piccinini Avocati, Genova, it offers its clients the possibility of more international services Zannetou describes the climate in Cyprus and which sectors have seen the most activity recently.

“The current business environment in our region is picking up and is having an upward trend having in mind the oil and gas in the region “The sectors with the most activity are in real estate investment in Cyprus and I think this is where most opportunities lie, without undermining the shipping sector and the interest for registration of vessels under the Cyprus flag.”

Zannetou explains the challenges that the country has faced, and how they can be met.

“Key challenges are the crisis imposed on Cyprus economy last year through the bail in imposed on the two main Banks on the island. These can be met by proper governmental moves and the hard working Cypriot mentality.

“It was a major overcoming of last year’s bailin, but there are plentiful opportunities with oil and gas. Cyprus needs to continue the hard and efficient work it has always practised and which is evident in the excellent and impressive results and progress it has showed over the last year.”

Company: N. Savvides Zannetou LLC Name: Nandia Savvides Zannetou Email: savlaw@cytanet.com.cy Web Address: www.zannetoulaw.com Address: 3 Demetriou Vikella, Nicosia 1061,Cyprus Telephone: 22-673974

Acquisition International | April 2014 | 59

SECTOR SPOTLIGHT: The Banking Industry: The Road Ahead for Denmark

The Banking Industry: The Road Ahead for Denmark

Joergen Kjaeldgaard is partner at MazantiAndersen, Korsoe Jensen & Partners. He speaks frankly about the Danish economic climate.

-------------------------------------------------------------Mazanti-Andersen, Korsoe Jensen & Partners was initially established by Supreme Court Attorney C. C. V. Liebe in 1853, and is the oldest existing law firm in Denmark.

The firm is today amongst the medium-sized law firms in Denmark with 50 lawyers and with an expertise within a number of demanding areas of legal work.

The firm provides assistance in all matters in respect of banking and financing law matters; from public governance of banks to re-financing of companies, financing of transactions and raise of capital.

The current business environment in this region is still suffering considerably under the financial crisis. The development of getting out of the crisis is slower than expected, and is also slower than that of Germany. However, we see small signs of improvement, and the banks are expecting a decrease in the enormous depreciation caused by intensive inspection activities from the Danish FSA. This will hopefully show in the banks’ annual reports for 2014.

The expectation of global growth across most major developed economies is due to a

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combination of the signs of the consumers’ (less recessive) behaviour and the banks’ hopefully decreasingly restrictive financial and lending policies and probably the ongoing reported “small” signs of positivity and optimism. Also the improved job market seems to play a role.

One of the largest Danish banks, Danske Bank, has just issued bonds regarding hybrid core capital with an enormous success. The IPO was oversubscribed several times, and the book price was in the high end of the fixed scale. Another large Danish bank, Jyske Bank, has just published the take-over of BRF, a player which finances real estate by bond issuing through the Danish real estate bond system.

One of the main factors which we believe has contributed to a rising of equity markets will probably be the general expectations regarding the growth, which is supported by the facts.

However, the rise seems to be fragile, and experts are talking about “second waves” of depreciation. Consumers’ behaviour also plays a role in this matter. Regarding the general professional expectations, we can show to the breaking news that the Danish National Bank (the central bank) has decided for the first time ever to buy shares and company issued bonds for part of the proceeds of the still and rapidly growing foreign currency reserves. Such decision is historic and underlines the level of trust regarding equity markets.

In spite of the positive signals regarding the financial and economic markets, the industry results for 2013 are still not impressive for many banks. A major reason for this is the FSA’s depreciation of many banks’ assets by inspections conducted in 2013 in combination with a still ongoing financial reluctance and brutal security requirements from the banks.

Obtaining of senior debts is still a difficult issue for minor and medium-sized banks. We also have examples of surprises with the surviving bank after some mergers and acquisitions.

A signal corresponding to growth and positivity is one of the major banks, Danske Bank, showing muscles by paying out 28% of the surplus to the shareholders on the upcoming general assembly.

Company: Mazanti-Andersen, Korsoe Jensen & Partners Name: Joergen Kjaeldgaard, Partner E Mail: JOK@mazanti.dk Address: Amaliegade 10, DK – 1256 Copenhagen K Telephone: +45 3319 3715

SECTOR SPOTLIGHT: Lithuania: The Go-To Economy of 2014

Lithuania: The Go-To Economy of 2014

Paulius Gruodis is a partner at law firm GLIMSTEDT, based in Lithuania. Here, he speaks to AI magazine about how Lithuania is emerging as a go-to economy.

-------------------------------------------------------------GLIMSTEDT is a leading Lithuanian business law firm with strong international reach. We maintain our professional ties worldwide. GLIMSTEDT acts in most of the major local and cross-border transactions in Lithuania. Close to 40 lawyers locally cover all areas of law in order to accommodate any type of business clients at short notice with sufficient manpower.

Partner at the firm, Paulius Gruodis, describes the current business environment in Lithuania and where he believes the biggest opportunities lie for investors.

“The region has outgrown the initial stages of wild capitalism,” he says. “We are now maturing markets with competitiveness growing every year through increasing management capabilities and specialisation of activities.

“Lithuanians are smart for business and indeed very skilful. There is still a lot of room for rise in the productivity, especially by fine-tuning the business processes. Foreign investors should grab this opportunity of efficiency profits by making things work better in Lithuanian factories, service providers and other businesses. Specialisation and process management would indeed raise the productivity while the costs of labour and services still being considerably lower than in Western Europe.”

To ensure economic growth is maintained, Paulius explains what the firm must focus on to ensure continued success.

“If one looks at the structure of Lithuanian exports, it is clear that there is no detailed recipe for this.

Lithuania’s businesses are diversified among high tech manufacturing, IT services, agricultural products; trade in almost any commodity or goods, and anything else. The driving force is not some particular type of natural resources or historic skills or industrial focus but rather a high level of entrepreneurship and a pursuit for the better life. Lithuanians indeed undertake a variety of activities and make this better and better. If this continues, and the productivity is always in mind, the country’s potential should not be wasted.

“The legal business is a witness and a participant of the same environment. While every year continuing to grow, the legal market is getting more and more competitive when new skilful and educated professionals grow and the establishment firms manage the legal process better and better.”

Company: Law Firm GLIMSTEDT Name: Paulius Gruodis Email: p.gruodis@glimstedt.lt Web Address: www.glimstedt.lt Address: 4 Jogailos street, 01116 Vilnius, Lithuania Telephone: +370 5 279 07 00

Acquisition International | April 2014 | 61

SECTOR SPOTLIGHT: Morocco: Attracting Foreign Investment in 2014

Morocco: Attracting Foreign Investment in 2014

Nadia Kettani is Partner at Kettani Law Firm.

Originally established in 1971 it is now one of the strongest independent law firms in Morocco, covering contentious and non-contentious cases. Here, Nadia describes the economic climate in Morocco.

---------------------------------------------------------------------“Morocco is the fifth largest economy in Africa and, in the past 15 years, its GDP Growth Rate averaged around 5 per cent. Morocco’s economic development model supports economic liberalisation with stateof-the-art legislation. In recent years, the country has gained a reputation as a safe place for business and lot of multinationals (banks, consultancy and insurance companies) have created their North Africa or Africa hubs in Casablanca, the business and financial centre of Morocco.

“Traditionally the greatest opportunities for investors lay within the agricultural sector, however the Moroccan economy continues to improve in other sectors, such as tourism, energy, mining, textiles, telecoms, automotive and aviation industries. Morocco also seeks to invest into, and expand, its renewable energy capacity.

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Morocco’s business law is based on the civil law system. The country is also member of key international organisations and has entered into a wide array of international investment treaties and free trade agreements. Arbitration procedures relating to its investment treaty portfolio as well as in relation to local business contracts are widely available to provide for an efficient alternative to the official state judiciary in Morocco.

“This is important because key domestic challenges for Morocco include enhancing transparency at the administration level (clear rules for tender bids) at the judicial level (more efficient justice) and reforming the education system, the judiciary, and the government’s costly subsidy program (the country’s state aid fund (Caisse de compensation), provides subsidies for basic necessities such as cereals and sugar as well as petroleum products). Moroccan economy further suffers from high unemployment, poverty, and illiteracy, particularly in rural areas.”

“Another key challenge for the country’s economy is to maintain the level of growth which still depends on

uncertainties related to the political context of North Africa and the debt crisis in the euro zone. However, Foreign Direct Investment into Morocco has shown an unprecedented increase of 24% in 2013 (as compared to the previous year) reflecting a total annual FDI value of 3.5 billion dollars.

Company: Kettani Law Firm Name: Nadia Kettani Email: nadia@kettlaw.com Web site: www.kettlaw.com Address: 8, rue Lahcen el Basri, 20100 Casablanca, Morocco Telephone: +212 522 438 900

SECTOR SPOTLIGHT: The Philippines: The Road Ahead

The Philippines: The Road Ahead

Foreign Investments in Nationalized Activities in the Philippines: Challenges and Relief The Philippine Securities and Exchange Commission, in Memorandum Circular No. 8 (May 20, 2013), provided guidelines on the Filipino-Foreign ownership requirements prescribed in the Constitution and/or existing laws for corporations engaged in nationalized or partly-nationalized activities, in light of the Supreme Court ruling in Gamboa v. Teves et al. (2011;2012). According to the Court, the requisite 60% Filipino ownership in Section 11, Article XII of the Constitution applies to “both (a) the total number of outstanding shares of stock entitled to vote in the election of directors; AND (b) the total number of outstanding shares of stock, whether or not entitled to vote in the election of directors.” The Court also stressed that “[B]oth Voting Control Test and the Beneficial Ownership Test must be applied to determine whether a corporation is a ‘Philippine national.’”

In the quasi-reorganisation of Bayan Telecommunications Inc., the creditors’ position that they are entitled to 77.7% equity, in a layered corporate structure via the conversion of the unsustainable debt into equity, was declared unconstitutional. The debt-to-equity conversion proposal, the creditors asserted, followed the Control Test in the Foreign Investments Act that considers a 60% (Filipino) - 40% (foreign) corporation as a Philippine national. But, the Supreme Court rejected the formula.

The Philippine House of Representatives Resolution No. 1 seeks to amend the economic provisions of the Constitution. If successfully adopted, foreign investment in and participation in the management of the companies engaged in nationalized activities like mass media, telecommunications and mining industry in excess of the present limits may be allowed

by law, thereby providing a big relief from the Filipinization provisions in the Constitution.

Company: Belo Gozon Elma Parel Asuncion & Lucila Name: Roberto Rafael V. Lucila, Senior and Co-Managing Partner Email: mail@bgepal.com Web: www.bgepal.com Address: 15th & 16th Flrs. Sagittarius, Condominiums, 111 H.V. dela Costa Street Salcedo Village, Makati City 1227, Philippines Telephone: +63-2-816-3716 to 19 +63-2-812-4496 to 97

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SECTOR SPOTLIGHT: Poland: Europe’s Growing Investment Hub

Poland: Europe’s Growing Investment Hub Dorota Rzazewska of JWP Patent and Trademark Attorneys speaks to AI about why Poland is fast becoming the investment hub of Europe.

-------------------------------------------------------------The JWP Group is made up of three entities: JWP Patent & Trade Mark Attorneys (intellectual property protection), JWP Attorneys at Law (legal assistance & litigation), JWP Foundation (IP education/training & pro bono actions). The group provides today a unique combination of legal, advisory and training services focused on strategic IP business management and corporate law that is unique to the Polish marked and addresses the needs of the clients seeking comprehensive assistance in IP business management under the global competitive conditions.

The economy in Poland still favors foreign investment capital. In the middle of 2013 the Government made a decision on continuation of operating Special Economic Zones till 2026.

Within the SEZs investors may obtain beneficial tariff reductions and tax exemptions. Innovative entities may apply for a status of an S&R centre and this further reduces the business costs. Due to the fact that in the EU budget for 2014-2020 financial resources are going to be distributed with a priority given to development of cooperation between science and business, and in recent years Polish research centers basing on Community funds have considerably improved their research infrastructure, the prospects for the foreign investment capital seem to be promising.

More than a half of the clients of JWP Patent and Trademark Attorneys are foreign entities.

Our firm enjoys many-year expertise in adopting optimum strategy for Intellectual Property management. In the process of selection of IP instruments we always take into account the specific field, business profile, business objectives of the entity as well as markets where the entity is planning to operate. We provide professional support for enterprises planning their investments in Poland or considering a possibility to cooperate with Polish firms.

Company: JWP Patent and Trademark Attorneys Name: Dorota Rzazewska Email: info@jwp.pl Web Address: http://www.jwp.pl Address: ul. Zelazna 28/30, 00-833 Warsaw, Poland Telephone: +48 22 436 05 07

Swietokrzyski suspension bridge in Warsaw, Poland

64 | Acquisition International | April 2014

SECTOR SPOTLIGHT: Forming a Company in Singapore

Forming a Company in Singapore

There are many considerations that come to mind when one is facing a choice of countries in which to form a company. The more immediate considerations may include the requirements and costs of incorporation, the time needed, compliance matters, and the company’s intended purpose. Beyond that, one may also make comparisons between countries for applicable advantages such as those in the areas of law enforcement and tax treatment.

Incorporation. In Singapore, incorporating a company is a straightforward process done via an online application at the Accounting and Corporate Regulatory Authority’s one-stop business services portal. Generally, a company can be incorporated within one business day once all the necessary documentation (including the company’s memorandum and articles of association and the consents of the proposed company secretary and directors, at least one of whom must be local), an approved name, and a proposed registered address are in place. For a private company limited by shares, a restriction on the right to transfer the company shares and a limit on the total number of members apply.

Companies wishing to engage in certain types of activities such as banking or financing business upon incorporation are subject to the relevant regulatory approvals. The total fees payable to ACRA for a one-time reservation of name, approval of name and registration for a company limited by shares are S$350 approximately.

Compliance. A Singapore company is required to hold its first Annual General Meeting within 18 months of its incorporation and file its Annual Return with the Registrar within one month of the AGM. The AR filing requirements are designed to be business-friendly and are tailored to suit the company’s size and activities.

For instance, solvent small exempt private companies with annual revenue up to S$5 million and exempt private companies which do not have any business activities need not have their accounts audited; a normal exempt private company and a non-exempt private company must have their accounts audited.

Purpose and Advantages. Whether one is looking to commence business operations or undertake projects in Singapore or in its neighbouring countries, a Singapore incorporated company offers a credible and effective vehicle for contracting and financing purposes. The Singapore Courts are accessible and committed to rendering fair and independent judgments, and the strict and swift enforcement of laws in Singapore provides much comfort to contracting parties and financiers. Where projects are undertaken in neighbouring countries, banks often like to see the holding or borrowing company located in Singapore. The fact that many international asset management funds and hedge funds have Singapore offices and restrict themselves to direct investments in Singapore companies also

facilitates the raising of funds for a Singapore company, be it for business activities or listing on the SGX Mainboard or Catalist. In addition, a Singapore tax resident company can enjoy tax exemption on its specified foreign income that is remitted into Singapore. Singapore also adopts a one-tier corporate tax system under which tax paid by a company on its chargeable income is the final tax and all dividends paid by a company are exempt from tax in the hands of the shareholders (with no withholding tax obligation for dividends paid to non-residents or non-resident companies). * The above information is accurate as at March 2014. For more information or assistance on corporate, mergers and acquisitions, commercial and taxation matters, please contact us at admin@abrahamlawoffice.com or +65 65132382.

Firm: Abraham LLC Name: Mohan Raj Abraham Email: mohan@abrahamlawoffice.com Name: Claudia Poon Email: claudia@abrahamlawoffice.com

Acquisition International | April 2014 | 65

SECTOR SPOTLIGHT: Uganda: The Next Global Boom

Uganda: The Next Global Boom Although Uganda has shown phenomenal economic growth there are still challenges to be faced; however with high risk comes high returns. Within this feature we will examine the strategies Uganda has in place to overcome challenges as well as the plans in force to maintain growth. We will also explore the pull factors which are attracting a vast amount of FDI, and finally how Uganda will respond to the crisis in surrounding countries.

Shonubi, Musoke & Co. Advocates, which recently celebrated 25 years, remains the leading law firm in Uganda and has been recognized as such for the past decade by Chambers Global, IFLR 1000, and PLC Which Lawyer.

With the relative political stability, liberalized economy that is largely private sector driven, favorable climate, mineral resources, and a functioning legal system governing investment and predictability, Uganda has seen remarkable progress in the business sector and continues to grow exponentially.

At the forefront of the boom there has been sectors such as manufacturing and agriculture which have seen new markets open up with the resumption of the East African community. The government has been pivotal in encouraging foreign investment through incentives in these sectors as well

Uganda’s economy has been growing steadily over the last fifteen years. This growth is both in the private sector and in the streamlining of service delivery in some key government institutions. The growth will continue. The services sector has also grown tremendously.

Legal services have improved and we see a shift towards specialized practice firms and indeed, this will be the next frontier of successful legal practice.

While the focus has been put on the emerging oil and gas sector, we anticipate a surge in the use of alternative energies as a source of electricity. This is because the demand for power is consistently growing at an average 12% and yet the resources available for hydroelectricity are simply insufficient both to meet the demand and in terms of the time it takes to develop these energy sources. In the result, we are seeing

66 | Acquisition International | April 2014

as through privatization and public private partnerships; policies which have distinguished Uganda from its neighbors. The discovery of oil and the impending commencement of oil production in Uganda has led to a flurry of business activity and investment, not only in production but in support sectors. Uganda’s recognition as a top tourist destination in 2013 cemented its arrival on the global tourism scene.

The firm has set the pace in its leading practice areas notably corporate/commercial advisory, banking and finance, mergers & acquisitions, intellectual property, public private partnerships, aviation, general conveyancing and real estate, litigation & ADR, tax & securities, telecommunications, energy, oil and gas, company secretarial services and presently provides advice to various local and multinational/ international clients of impressive repute.

a shift in other practice areas, such as Banking and Finance and Mergers & Acquisitions. This will only continue and grow to higher levels of intensity. At Kirunda & Wasige Advocates, we are privileged to be at the forefront of these dynamic shifts to renewable energy and specialized the interrelated transactional practice.

The biggest challenge to the growth of Uganda’s private sector in the coming years is access to capital. Investor confidence has slightly improved but needs to shift radically for the better, preferably sooner. With 26 licensed banks, the biggest challenge to the investment explosion that we have anticipated for a while will be how conservative the banks in Uganda are. This presents a unique opportunity for the international investment banks to come in. there are far more promising ideas suitable

With a potent investment-friendly climate, the pearl of Africa has established itself as a goldmine and haven for both local and foreign investment.

Investment in Uganda is a chance worth taking.

Company: Shonubi, Musoke & Co Advocates Name: Noah Edwin Mwesigwa Email: nmwesigwa@shonubimusoke.co.ug Web Address: www.shonubimusoke.co.ug Address: Plot 14 Hannington Road, SM Chambers P.O Box 3213 Kampala Telephone: +256414233204

for the investment banking model today than there were in the last decade. This will be the catalyst that sets Uganda on its next course of development.

Firm: Kirunda & Wasige Advocates Name: Robert Kirunda, Partner Email: robert@kirundawasige.co.ug Web Address: www.kirundawasige.co.ug Address: Suite C, Plot 2, Wampewo Close, Kololo, Kampala Telephone: +256 414 255 656

Michael Wilson & Partners, Ltd. (MWP) is a full service law practice and business consultancy with offices in both Baku and Almaty covering Azerbaijan, Kazakhstan, the Central Asian Region and the Caucasus. Combining years of collective experience in the CIS, MWP’s key personnel have been actively practising in this Region for more than 20 years on a resident full-time basis, taking a leading role on many of the groundbreaking transactions in a variety of sectors. Today, MWP continues to maintain its position as the region’s largest independent law firm and is as well considered a key strategic partner to its clients - both foreign and domestic - in mining and natural resources sectors, utilities, cross-border transactions, all aspects of foreign investment, joint ventures, financing, privatisations, restructurings, transportation, domestic and international dispute resolution, intellectual property, trademarks and general corporate and commercial law.

MWP office in Azerbaijan, Baku was established in 2003. Michael Wilson &Partners, Ltd. in Azerbaijan maintains an office to represent key clients in the jurisdiction.

Nurly Tau Business Centre, 7th Floor, Building 1A, 5 Al-Farabi Avenue, Almaty 050059, Kazakhstan Telephone: +7 727 258 48 90, Facsimile: +7 727 258 48 94 BAKU OFFICE: Telephone: +994 12 4978948, Facsimile: +994 12 4978947

www.mwp.kz

DEAL DIARY: M&A from around the world

Deal Diary

CONSUMER

70

MBO FOR AMG

70

DELIVERY HERO

70

GROVEPOINT BACKS GRENADE

71

LABEYRIE ISSUANCE

71

LCY COMBINES WITH KRATON

71 MAKEMYTRIP 73

TRAFFICWARE ACQUIRES PSI

73

WORLD CLASS INTERNATIONAL COMPLETES MBO

73

ACCENT EQUITY DIVESTS HÖÖKS TO ALIPES

ENERGY & RESOURCES

75

ALS ACQUIRES BMP

75

UNIVERAL ACQUIRES NEW CLYDESDALE COLLIERY

75

YANCHANG PETROLEUM ACQUISITION OF NOVUS ENERGY

HEALTHCARE

77

MOBEUS INVESTMENT IN BOURN BIOSCIENCE LIMITED

77

ORPEA ACQUIRES SENEVITA

77

TOTAL THERAPEUTIC MANAGEMENT

Leading global SaaS provider of content management and collaboration solutions, Intralinks Holdings, Inc has released its quarterly predictions on global deal volume, as part of its Deal Flow Indicator (DFI). The latest data shows a 16% increase in year-on-year (YoY) early-stage global M&A activity, with particularly strong performances in Europe (21%), Middle East and Africa (EMEA) and Asia Pacific.

Intralinks also surveyed 1000 global M&A professionals to gauge their opinions on the current deal environment. Highlights from the EMEA sample include: • 75% predict M&A deal volume will increase over the next 6 months • Industries with the most activity: High Tech, Energy and Power, Financials • 48% think the Ukraine/Russia crisis will negatively impact global M&A Of the UK responses: • 85% expect negative impact on M&A if Britain left the EU • 48% expect value of UK companies to decrease if Britain left the EU • 63% expect negative impact on UK M&A if Scotland became independent • 68% expect number of Scottish de-mergers to increase if Scotland became independent

INDUSTRIAL

79

AKOMEX ACQUIRES DRUK-PAK

79

INCLINE RECAPITALISES HARTLAND

79

TAMINCO CORPORATION ACQUIRES KEMIRA OYJ

REAL ESTATE

81

BYTEGRID ACQUISITION OF CHICAGO FACILITY FROM CNA

81 COMMIF 81

WEALTHCAP PROVIDES FUNDING

SUPPORT SERVICES

83

ECI PARTNERS ACQUIRE AVANTIA GROUP

83

MAJORITY STAKE OF IT INVEST ACQUIRED

83

NVM EXITS FROM ALARIC SYSTEMS

On the latest figures, Matt Porzio, vice president of M&A strategy at Intralinks said: “Global M&A markets are healthy, maintaining high levels of activity and continued optimism among dealmakers. Many factors are driving a highly competitive market, including a good lending environment and the need of corporations and private equity to put their money to work and buy growth. Deal volumes across the value chain are up, and we expect to see more high profile deal announcements through 2014, especially in hot sectors like technology, telecommunication and Energy and Power.”

TMT

He added: “Currently, dealmakers are worried that an independent Scotland will seriously impact the UK economy. If the people of Scotland voted ‘YES’, the decision could seriously jeopardise market confidence and negatively impact M&A activity in the subsequent months.”

68 | Acquisition International | April 2014

84

ADAR SECURES FUNDING

84

HISCOX TO ACQUIRE DIRECTASIA

84

ALBION VENTURES INVESTS IN EGRESS

85

INVESTMENT IN I-TEN

85

NOVISOURCE LISTED FOR FIRST TIME

85

DISCOVERY ACQUIRES RAW

87

CAPIDEA INVESTS IN XSTREAM

87

MONITISE ACQUISITION OF POZITRON

87

TVBEAT SECURES FUNDING

DEAL DIARY: M&A from around the world

Acquisition International’s Q1 round up of M&A activity with data from Zephyr, published by Bureau van Dijk The opening three months of 2014 have so far generated a fairly low level of investment, according to data from Zephyr, the M&A database published by Bureau van Dijk. Between January and the end of March there were a total of 17,431 transactions worth an aggregate USD 903,501 million.

The first three months of the new year are at an end and we are beginning to get an indication of how deal activity is shaping up so far. So far the main sectors to have benefitted from high investment levels are the banking industry, which was targeted in deals worth USD 106,800 million, and the machinery, equipment, furniture and recycling sector, which has so far brought in USD 92,015 million. These industries recorded total dealmaking of USD 542,933 million and USD 394,296 million, respectively, in 2013. As such there is still some way to go if results are to surpass these levels and it is still early days as far as 2014 is concerned.

The most commonly targeted region worldwide thus far this year is Western Europe with 5,159 transactions. This places it well ahead of its nearest competitors, the Far East and Central Asia, which came second with 4,072 and North America, which came third with 3,735. It was a different story by value, as North America led the field with investment of USD 371,491 million, followed

by Western Europe on USD 242,637 million and the Far East and Central Asia, which trailed with 153,682 million. South and Central America placed fourth by value with USD 63,556 million. This is notable as it could only reach sixth by volume, being targeted in 561 transactions.

In conclusion, it remains hard to say how this tentative start to 2014 will play out over the coming months. A number of blockbuster transactions may be needed to bring results up to the levels recorded over the last couple of years.

NUMBER AND AGGREGATE VALUE (MIL USD) OF DEALS GLOBALLY: 2006 - 2014 YTD (as at 31 March 2014) Deal half yearly value (Announced date) H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 TD

Number of deals 36,108 36,765 41,034 38,439 36,488 33,630 35,676 38,961 36,582 36,629 36,609 36,573 35,852 37,312 36,088 40,606 17,431

Aggregate deal value (mil USD) 2,176,298 2,327,359 3,129,163 2,499,533 2,981,666 2,128,600 1,999,299 1,777,836 1,639,820 1,771,899 1,857,346 1,541,502 1,464,742 1,775,803 1,621,817 1,970,467 903,501

Acquisition International | April 2014 | 69

DEAL DIARY: Consumer Deals MBO FOR AMG CONSUMER

AMG Group Ltd, the Scotland-based owner of Vango, one of Europe’s leading camping, footwear and outdoor equipment brands, has competed a management buyout of the company.

After ownership by the Moodie family for almost 50 years, directors Stephen Newlands, Managing Director; Steve Craig, Commercial Director; and Glenn Andrews, Product Director have successfully bought out AMG Group.

The company’s brand portfolio includes the UK’s best-selling tent and camping equipment range, Vango, the iconic high performance expedition and mountaineering collection, Force Ten and Lichfield family camping products.

The company also distributes Rossignol winter sports equipment, Asolo footwear, Trangia camping stoves, Wayfayrer camping foods and an innovative new, gel based bio fuel known as Fuel4.

AMG Services Division, which services and repairs all brands of tent and is the only business of its kind still left in the UK, is also included in the deal.

Wylie and Bisset LLP assisted in the transaction, acting for the management behind the buyout. Lorna Wylie was lead advisor whilst Marc Shenken, Tax Partner, assisted with the tax side of things.

Wylie commented: “This was an excellent transaction as it allowed an important Scottish business to stay under local control, whilst ensuring that the management in place to run the business can maximize the potential in the marketplace. The Lorna Wylie management are an exceptionally talented pool of people and were greatly enjoyable to work with. Our advice helped them to complete this deal successfully and ensure that the structure will help them achieve their commercial objectives.”

MBO FOR AMG

DRV Corporate Finance

DELIVERY HERO RAISES $88 MILLION IN FUNDING ROUND Delivery Hero, the Berlin company behind the giant international online food ordering network, participated in Insight Ventures, one of the largest growth equity funds, raising $88m in funding.

Total Delivery Hero has over the past years about $ 200 million recorded. With the fresh cash the Series D financing the Berlin wants to expand its growth in existing markets. Around 55,000 restaurants in 14 countries work together with the company, including in Germany, Great Britain, Sweden, Finland, Russia, China, Mexico and India. For the participating restaurants the company generates per year claims to own half a billion Dollars in sales of around 6 million customers. Among the previous delivery Hero investors still belong next to Kite Team Europe Ventures, the investment company of Tengelmann and Holtzbrinck, Point Nine Capital and the lenders Kreos Capital, and the two Russian VCs Runet and Phenomen Ventures.

The company stated it will “primarily use the funds to fuel growth in its existing markets and expanding its position as an innovation leader”.

Delivery Hero has been fully advised by the GLNS partners Dr. Matthias Mitter Meier, Dr. Ludger Schult (both venture capital / private equity / M & A), Georg Lindner (M & A, Tax Law) and Dr. Reinhard Ege (tax) advice.

GROVEPOINT BACKS GRENADE Grovepoint Capital has acquired a majority interest in UK sports nutrition business Grenade.

Founded in 2009, Grenade produces a range of nutrition products that assist weight gain, weight loss and recovery after exercise. The global sports nutrition market is worth $7.5bn (€5.4bn).

The company has focused on the premium end of the market and built up distribution in 100 countries. The products can be found in GNC, Holland & Barrett and Bodybuilding.com, as well as large general retailers like Walmart and Tesco.

Grenade also sells its products directly to the US military via the PX stores on Marine Corps bases worldwide. The business was founded by husband and wife team Alan and Juliet Barratt.

The deal is Grovepoint’s second in the food supplement sector within the last 12 months, following the acquisition in February 2013 of a majority interest in Algatech, a manufacturer of the antioxidant Astaxanthin.

Aspire Corporate Finance is the retained adviser of Grenade (UK) Limited and advised the shareholders and company directors throughout the sale process.

The team was led by managing director, Konrad Rutkowski, who commented: “Grenade has grown rapidly since launching in 2009 and the rate of growth is set to increase even further in the forthcoming years.

The investment by Grovepoint will Konrad Rutkowski allow Alan and Juliet to continue to focus on their strengths, whilst ensuring the right infrastructure and support is put in place behind the scenes to facilitate this expansion.” konrad@aspirecf.com www.aspirecf.com Other firm’s assisting in the deal include DLA Piper, Altium, Solomon, Taylor & Shaw, Grovepoint Capita, Magma, Bromwich Hardy and Merrill.

DELIVERY HERO RAISES $88 MILLION

IN FUNDING ROUND DRV Corporate Finance

GROVEPOINT BACKS GRENADE

DRV Corporate Finance

Financial Adviser to the Vendor

Virtual Data Room Provider Tax Adviser Legal Adviser to the Vendor

70 | Acquisition International | April 2014

Financial Adviser

Property Valuer

Legal Adviser to the Vendors

Legal Adviser

Financial Adviser

Tax Adviser

DEAL DIARY:

LABEYRIE ISSUANCE

LCY COMBINES WITH KRATON

Labeyrie Fine Foods S.A.S., a fine foods company, has issued EUR275m of senior secured notes due 2021, priced at par with a 5.625 per cent coupon. The company was backed by backed by LBO France, which acquired a stake in Labeyrie in January 2012.

LCY Chemical Corp is to combine its styrenic block copolymer (SBC) business with Kraton Performance Polymers, Inc, a global producer of highly engineered polymers.

The proceeds, combined with cash on hand, will be used to repay in full the company’s financing arrangements – EUR160.6m of term loans, EUR35.2m of senior mezzanine bonds and EUR28.5m of junior mezzanine bonds.

They will also be used to repay subordinated shareholder convertible bonds (EUR52.1m and EUR7.4m), and to redeem senior mezzanine warrants (EUR1.1m).

The firm will also enter into a EUR80m three-year factoring facility agreement and a EUR35m 6.5year revolving credit facility.

As a result of this refinancing, Labeyrie has moved to an all-bond debt structure.

DragonKnight Advisors assisted in the transaction, acting as financial advisor to the issuer and the guarantors. The team was led by founder and managing partner, Stephan Gaude, who commented: “DragonKnight was the interface between the advisors of the banks for high yield note, the RCF, the shareholders and the management team. DragonKnight contributed to getting all parties aligned and insured they reached a position beneficial to the Issuer.”

Tresoptim, an expert in factoring solutions and trade receivables financing, advised Labeyrie in the deal, with owners of the firm, Luc Merlin and Sylvain Poissonnier, heading the team.

LABEYRIE ISSUANCE

DRV Corporate Finance

Kraton invented highly engineered synthetic elastomers and is a leading global producer of SBCs. Kraton has developed a broad, high-value product portfolio and market-leading innovation platforms, and it has manufacturing operations in North America, South America, Europe and Asia and sales outlets in over 60 countries worldwide.

The combined company will integrate LCY’s costefficient SBC manufacturing and production process with Kraton’s product breadth and R&D technology.

As a result, the combined company will be geographically balanced across its three regions – Asia, Americas and Europe – and well positioned to serve customers around the world with an industry-leading platform of innovation-grade products.

This combination is consistent with the Company’s key strategy of developing high-value petrochemical products in Taiwan. LCY will continue to research and develop products through its innovation platforms and will focus on manufacturing high-value products in an environmentally conscious way. The Company will also continue to produce medical polypropylene, electronicclass chemical products, high-performance plastics and solvents. LCY’s strategy is expected to raise the technical standard and production yield rate of the chemical industry in Taiwan, strengthening the country’s manufacturing advantages and creating more business opportunities.

Zejun Lin

Changrong Xu

Zhong Lun Law Firm acted as Kraton’s PRC legal advisor in the transaction, with Zejun Lin, partner, and Changrong Xu, partner, making up the legal team. linzejun@zhonglun.com xuchangrong@zhonglun.com www.zhonglun.com

LCY COMBINES WITH KRATON

DRV Corporate Finance

MAKEMYTRIP LIMITED ANNOUNCES PROPOSED PUBLIC OFFERING India’s largest online travel company, MakeMyTrip Limited, is proposing to offer and sell up to 3,000,000 ordinary shares and certain selling shareholders are proposing to offer and sell up to 1,500,000 ordinary shares in an underwritten public offering. The selling shareholders and another shareholder have also granted the underwriters a 30-day option to purchase up to an additional 675,000 ordinary shares.

MakeMyTrip Limited is the parent company of MakeMyTrip (India) Private Limited, India’s largest online travel company, MakeMyTrip Inc. (USA), MakeMyTrip FZ LLC (UAE), Luxury Tours & Travel Pte Ltd (Singapore), Luxury Tours (Malaysia) Sdn Bhd, the Hotel Travel Group (Thailand), the ITC Group (Thailand) and the EasyToBook.com Group. The Company’s services and products include air tickets, customized holiday packages, hotel bookings, railway tickets, bus tickets, car hire and facilitating access to travel insurance.

Shearman & Sterling advised Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. as underwriters in connection with the US$145.5 million registered follow-on offering of 6,325,000 ordinary shares by Matthew Bersani MakeMyTrip Limited, India’s largest online travel agency, and certain selling shareholders. The transaction was led by Asia Managing Partner Matthew Bersani and Singapore associate Jeremy Wang.

Commenting on this transaction, Matthew Bersani says “we are delighted to have represented the underwriters on this important transaction for a great Indian company with whom we have worked since their 2010 IPO”, and highlights “this transaction reflects our commitment to our India practice even during challenging periods. We are committed to leveraging our success to benefit clients in many sectors in India, including e-commerce and TMT.” Other firms assisting in the transaction include Latham & Watkins and S&R Associates.

MAKEMYTRIP LIMITED ANNOUNCES

PROPOSED Finance PUBLIC OFFERING DRV Corporate

Financial Adviser to Labeyrie Advisers

Legal Adviser

Factoring

S&R Associates

Acquisition International | April 2014 | 71

CONSUMER

Consumer Deals

DEAL DIARY:

TRAFFICWARE ACQUIRES PSI Trafficware Group Inc, a KRG Capital Partners Fund IV portfolio company and leading participant in the intersection control hardware and software segments of the intelligent transportation systems market, has acquired PSI Acquisition, LLC, an Oregon-based manufacturing company that specialises in intelligent traffic solutions.

PSI’s product line includes a variety of CALTRANS traffic control cabinets, controllers and conflict monitors, innovative power backup technology, and industry-leading Cyberlock Security Access System.

KRG made an investment in Trafficware in November 2011, representing the 10th of 14 platform company investments made to date in KRG Fund IV. PSI represents the 192nd investment for KRG since inception.

“Trafficware is committed to bringing innovation and technology to the traffic industry, as well as a broad portfolio of products. Our goal is to equip our customers with the ability to solve the most complex traffic management problems, whether through organic product development, partnership, or acquisition,” said Jon Newhard, CEO of Trafficware.

Bradley Consulting Group provided buy-side transactional assistance to Trafficware, including quality of earnings analysis, working capital analysis, and structural assistance.

Brian Wagner, Principal & Success Strategist, led the team and commented: “There were several challenges in the PSI transaction. PSI had recently spun off another segment of the business to another party; bifurcating their internal accounting and Brian Wagner management system records in order to perform the Q of E analysis and financial due diligence proved to be a fairly significant challenge, along with the related working capital issues. www.bcgpc.com msmith@bcgpc.com “This bolt on acquisition was synergistic for Trafficware’s existing operations in several ways including market share growth, introduction into new markets, product line expansion, and operational synergies.”

TRAFFICWARE ACQUIRES PSI

DRV Corporate Finance

Financial Due Diligence Provider

WORLD CLASS INTERNATIONAL COMPLETES MBO Capital Partners has advised World Class International Management Team on the execution of a Management Buyout of the Romanian, Serbian and Polish operations.

Word Class Romania is a leading local fitness operator. Until recently, the company was a subsidiary of World Class International, a fitness chain with presence in 9 countries and more than 60,000 members across Europe. With the first club opened in 2001 in Marriott Grand Hotel with a clear scope to test the infant Romanian fitness market, in 2005 World Class Romania opened its second club in Bucharest Radisson Hotel, which became the starting point of a successful expansion to 11 clubs in 2013, which put the company in the forefront of, now a EUR 64 million, fitness market.

Traila, Stratulat, Almasan, Albulescu - Attorneys at Law assisted in the transaction, representing the vendor, with the team being led by Silviu Stratulat, Managing Partner, and assisted by Andrei Albulescu, Senior Partner.

Stratulat commented: “Once the optimal structuring of the transaction was agreed by the Parties involved, the deal developed as expected and has a smooth closure mostly given to the professionalism of all parties involved in the transaction and of the internal organization of WCR and WCSI. The transaction involved a set of highly Andrei Albulescu comprehensive and extensive documents that had to envisage the actual sale between WCSI and the Buyer as well as the future relationship between the Buyer and the Management Team.

ACCENT EQUITY DIVESTS HÖÖKS TO ALIPES Investment fund, Accent Equity 2008, has agreed to divest all Hööks fund’s share capital to Alipes Invest AB. Hööks CEO, Joachim Höök, will remain in his present position and will also, together with company management, remain as a substantial minority owner alongside the new owner. The transaction is conditional upon approval from relevant competition authorities.

Hööks is the leading retailer in equestrian sports in the Nordic countries. Net sales in 2013 amounted to SEK 365 million (EUR 41m) and the company is growing very fast. The company is currently opening stores numbers 44 and 45 and Hööks is thereafter represented at 33 locations in Sweden, 6 in Norway, 4 in Finland and 2 in Denmark.

Silviu Stratulat

“The deal will allow WCR to grow and develop even further by a broader and easier access to investment capital while benefiting of the extensive management experience of Resource Partner’s team alongside the existent highly qualified company’s management team.” www.tsaa.ro office@tsaa.ro silviu.stratulat@tsaa.ro andrei.albulescu@tsaa.ro

“Hööks has, during the fund’s ownership period, developed very favourably,” says Niklas Sloutski, CEO of Accent Equity Partners AB, advisor to Accent Equity 2008. “Net sales have grown by 15 per cent per year and the company’s profits have doubled. It is very satisfying to hand over the baton to Alipes that have the resources, ambition and competency to support Hööks’ further expansion.”

Gunnar Selving, Alipes: “Hööks has through its long history and corporate culture established itself as a leading specialist retailer with a strong brand and a unique customer offering.”

Firm White & Case assisted as legal adviser to the vendor, and PwC acted as financial adviser to the vendor in the transaction.

Other firms which assisted in the deal include RTPR Allen&Overy and Ernst & Young Romania.

WORLD CLASS INTERNATIONAL

COMPLETES MBO DRV Corporate Finance

ACCENT EQUITY DIVESTS HÖÖKS TO ALIPES

DRV Corporate Finance

Legal Adviser to Management Team Virtual Data Room Provider

Financial Adviser to the Management Team

Capital Partners

Legal Adviser to the Vendor

Legal Adviser to the Equity Provider

Legal Adviser to the Purchaser Legal Adviser to the Equity Provider

Financial Due Diligence Provider

Financial Adviser to the Vendor

Acquisition International | April 2014 | 73

CONSUMER

Consumer Deals

DEAL DIARY: Energy & Resources Deals

New international oilfield services company ALS Oil & Gas, has acquired the North American completions services provider, BMP Enterprises LLC (BMP).

The acquisition further enhances ALS’ ability to service the upstream Oil & Gas industry with leading technical services across all major geographies.

BMP specialises in turnkey monitoring solutions for the down-hole Oil & Gas, downstream, industrial and pipeline monitoring markets. BMP’s team has market-leading knowledge in design, planning and installation of monitoring solutions using memory tools, permanent tools and fibre optic-based acoustic and temperature monitoring. The acquisition of this leading service capability adds to ALS Oil & Gas’ Specialist Well Monitoring division’s technical and product expertise. With this combination, ALS Oil & Gas now has a powerful monitoring capability to present end to end solutions to clients and to continue its focus on evolving new and improved monitoring solutions. The transaction also provides access to new areas of industrial and pipeline markets for ALS Oil & Gas. ALS Oil & Gas MD, Pascal Bartette commented: “The addition of BMP’s US base and experience offers tremendous opportunities to our customers in our traditional down-hole market as well as exciting new markets in industrial and pipeline monitoring where there is significant potential.”

BoyarMiller represented the seven equity owners of BMP Enterprises in the sale of their equity interests to ALS, with Gus J. Bourgeois leading the legal team.

Bourgeois commented: “The transaction will allow BMP Enterprises to further develop a global customer base and to have greater access to capital, while taking advantages of economies of scale provided by the combination with ALS.” Gus J. Bourgeois

ALS ACQUIRES BMP

DRV Corporate Finance

UNIVERAL ACQUIRES NEW CLYDESDALE COLLIERY Universal Coal is to acquire all assets of Exxaro Resources and assume liabilities of Exxaro’s New Clydesdale colliery in a move that will transform the company into a multi-mine producer.

Universal Coal Chief Executive Officer, Tony Weber, stated that the acquisition of the NCC marked a “major step forward” to becoming a mid-tier coal producer, and expedited the development of the company’s second operation immediately on the heels of commissioning its Kangala mine. Kangala is to produce 2.1-million tonnes a year of thermal coal in the first half of 2014.

“Our Roodekop deposit contains an 84-milliontonne coal resource, 82.9-million tonnes of which is measured and is awaiting only the granting of a water use licence before development activities can commence,” said Weber.

He added that in combination with NCC’s established operation and infrastructure, the path forward to bringing the Roodekop mine on stream had been fast-tracked.

The NCC has one of the oldest mines in the country, and has been operational, sporadically, since 1949.

Alexis Fox-Mills, of Merrill DataSite, acted as virtual data room provider, whilst Rand Merchant Bank and EOH Legal Services acted as financial adviser and legal adviser to the vendor respectively. Cliff MacGregor led the team at EOH, and Pieter Nienaber headed the team at Rand Merchant.

UNIVERAL ACQUIRES

NEW CLYDESDALE COLLIERY DRV Corporate Finance Virtual Data Room Provider

Legal Adviser to the Vendor

YANCHANG PETROLEUM INTERNATIONAL ACQUISITION OF NOVUS ENERGY INC Novus Energy Inc. (TSXV: NVS) announce that the previously announced acquisition of the Company by Yanchang Petroleum International Limited (“Yanchang Petroleum International”) through its indirect wholly-owned subsidiary, Yanchang International (Canada) Limited, pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement”) has been completed. Pursuant to the Arrangement, Novus shareholders will receive C$1.18 in cash per common share of Novus.

Mr. Hugh G. Ross, President and Chief Executive Officer of Novus, stated “The Novus team is excited about our future with Yanchang Petroleum International and I would like to personally extend my sincere thanks to our board members and staff for their dedication, hard work and contribution which has made the completion of the Arrangement possible”.

Cormark Securities Inc., as lead, and FirstEnergy Capital Corp. acted as financial advisors to Novus in the transaction. GMP Securities L.P. acted as special advisor to the Special Committee of the Novus board of directors, and Canaccord Genuity Corp. and Haywood Securities Inc. acted as strategic advisors to Novus. Blake, Cassels & Graydon LLP acted as legal counsel to Novus.

With the completion of the Arrangement, the common shares of Novus are expected to be de-listed from the TSX Venture Exchange in a few trading days.

YANCHANG PETROLEUM INTERNATIONAL

NOVUS ENERGY INC DRVACQUISITION CorporateOFFinance Financial Adviser to the Vendor

Legal Adviser to the Vendor Legal Adviser to the Purchaser

Legal Adviser to the Purchaser Financial Adviser to the Purchaser Financial Due Diligence Provider

Financial Adviser to the Vendor Financial Adviser to the Purchaser

Acquisition International | April 2014 | 75

ENERGY & RESOURCES

ALS ACQUIRES BMP

DEAL DIARY: Healthcare Deals

Mobeus is pleased to announce an investment to support the geographic expansion of Bourn Bioscience Limited, trading as Bourn Hall Clinic. An initial £3.5 million investment for a minority shareholding is supplemented by a commitment to invest significant follow-on finance.

Bourn Hall Clinic owns and operates the internationally renowned Bourn Hall, near Cambridge; the first IVF clinic in the world. The clinic was founded in 1980 by Robert Edwards and Patrick Steptoe, the IVF pioneers whose work led to the birth of the first testtube baby, Louise Brown, in 1978. Since its formation, Bourn Hall Clinic has been responsible for the birth of over 15,000 children.

Today the company comprises three full service IVF clinics in Cambridge, Colchester and Norwich, supported by a number of satellite units based in NHS hospitals and its own satellite unit in Wickford. Bourn Hall Clinic is the largest independent fertility services provider in the East of England, employing 120 staff and delivering over 2,500 IVF cycles per annum.

The UK market for fertility services has grown significantly in recent years, driven by increasing acceptance and awareness of IVF procedures, favourable demographics and improved success rates. Bourn Hall Clinic is looking to continue expanding its geographic footprint, leveraging its strong and respected brand and reputation.

Adam Pang, director at Merrill DataSite who represented Bourn Bioscience Limited commented: “Merrill DataSite works closely with Life Science’s businesses and were delighted to be engaged with Bourn through this project to preAdam Pang pare and present their documentation for due diligence, helping secure the investment from Mobeus.”

Adam.Pang@merrillcorp.com www.datasite.com

MOBEUS INVESTMENT IN

BOURN BIOSCIENCE DRV Corporate Finance LIMITED

ORPEA ACQUIRES SENEVITA The ORPEA group, a leading European player in Long-Term Care (nursing homes), Post-Acute Care and Psychiatric Care, has acquired Senevita, a subsidiary of Austrian group SeneCura.

Senevita is a leading Swiss provider of long-term care, with a network of 21 facilities at end-2013.

With the ORPEA group’s support and financial resources, Senevita’s management and development team will naturally be able to gain new authorisations and make new acquisitions, starting in 2014 and continuing into the future.

This will enable it to grow revenue beyond the figure of CHF160 million, which only takes into account the opening of the eight facilities currently under construction.

Yves Le Masne, ORPEA’s CEO, made the following comments: “This strategic acquisition in the first quarter of 2014 is fully in line with ORPEA’s international development aims.

“Senevita is a unique opportunity to obtain a platform for development in Switzerland, where growth in high-quality care facilities and sector consolidation are expected to accelerate in the next few years.

“This deal marks a new phase in ORPEA’s international expansion strategy, which will continue in the next few months since the group has a large amount of financial flexibility.”

Acxit Capital acted as the exclusive financial advisor to Orpéa S.A, with managing partner, Thomas Klack, heading the team. Klack commented: “The acquisition target will give ORPEA a strong position in the German-speaking part of Switzerland with excellent further growth potential because of a Thomas Klack secured expansion pipeline. Also the capital market appreciated ORPEA’s acquisition strategy: the transaction lead directly to an increase of Orpéa’s share price by 3.9% on the first trading day post transaction announcement.” www.acxit.com info@acxit.com

TOTAL THERAPEUTIC MANAGEMENT Indegene, a leading global provider of clinical, commercial, and marketing solutions to global life science, pharmaceutical, and healthcare organizations today announced that it has acquired Atlanta-based quality improvement, outcomes research, and clinician engagement services company Total Therapeutic Management, Inc. (TTM) to expand its healthcare division service portfolio and market presence.

Founded in 1995, TTM provides solutions to several large healthcare organizations including the federal government in the areas of academic detailing, HEDIS/STAR improvement, outcomes research, and medical record retrieval/review.

Seyfarth Shaw LLP represented Indegene Healthcare in the acquisition of TTM, which specializes in medical chart retrieval, abstraction and clinician engagement for educational outreach. Suzanne L Suzanne Saxman Saxman, partner at Seyfarth Shaw LLP led the team, she explains: “We were able to assist our client in achieving a very tight timeframe, which allowed the transaction to close as of December 31, 2013.

“This acquisition further increases Indegene’s market presence as a global provider a leading provider of clinical, commercial and marketing solutions to global pharmaceutical healthcare organizations, while offering a broader range of services from Indegene’s healthcare portfolio.”

The company reported that TTM will continue to grow its business as Indegene TTM Inc. with the same leadership and organizational structure. Dr Nair summarized by saying: “TTM’s clients will continue to receive the same level of superior service and expertise and will additionally have the extended Indegene eco-system to rely on.”

Bredin Prat also assisted in the transaction.

ORPEA ACQUIRES SENEVITA

DRV Corporate Finance

TOTAL THERAPEUTIC MANAGEMENT

DRV Corporate Finance

IP Due Diligence Provider & Legal Adviser to the Purchaser Virtual Data Room Provider

Virtual Data Room Provider

Financial Adviser to the Purchaser Financial Due Diligence Provider

Legal Adviser to the Management Team Financial Adviser to the Purchaser

Acquisition International | April 2014 | 77

HEALTHCARE

MOBEUS INVESTMENT IN BOURN BIOSCIENCE LIMITED

Tanzania and Beyond Managing Partner: Hon. Nimrod E. Mkono MP Numberof partners:4 Numberof associates/counsel:20

FirmOverview:Mkono&Co.isaleadingEast-Africanlawfirmheadquartered in Dar es Salaam, Tanzania. Founded in 1977 by Managing Partner, Hon. Nimrod Mkono, the firm has gradually developed to become Tanzania’s leading lawfirm and a prominent corporate, commercial and financial practice in the East-African region. The Firm’s growth is reflected in the unique and dynamicteamofbothcommonlawandcivillawpractitionersfromaroundthe world. We thoroughly understand the key political, economic, regulatory and legalissuessurroundingdoingbusinessinourregion.InTanzania,Rwandaand Burundi, we have an exclusive network of contacts with governments, banks, local companies and other consultants and are able to successfully steer investors through often challenging and unfamiliar business environments.

The firm is recognized by international professional directories and has received multiple awardsfor itslegal leadership and quality ofservice. Thefirm hasbeenrankedinTieronebyChambersGlobalsince2000andcountsseveral lawyers ranked as leaders in their field.

Key Practice Areas: Corporate and Commercial, Securities and Capital Markets, Intellectual and Real Property, Institutional and Public Law Reform, InternationalLaw, Banking andFinance, Dispute Resolution.

Head Office: 8th Floor, EXIM Tower, Ghana Avenue.

PO Box 4369, Dar Es Salaam, Tanzania Tel: +255 22 2118789-91, 2194200 & 2114664 Fax: +255 22 2113247 & 2116635 Email: info@mkono.com Website: www.mkono.com Burundi Office: 2nd Floor, Old East Building, Place de l’Independence P.O.Box 2341, Bujumbura, Burundi Tel: +257 22 256219, +257 22 256220 Fax: +257 22 256221 E-mail: info@mkono.co.bi Website: www.mkono.co.bi

DEAL DIARY: Industrial Deals

Highlander Partners is to acquire Druk-Pak from Penton Partners, through its portfolio company, Akomex.

The potential acquisition will result in creating one of the largest consumer packaging companies in Poland with substantial growth opportunities throughout the EU market. In addition to this add-on investment, Highlander will also finance the construction of a new manufacturing facility at Akomex, which will commence immediately after the closing of the transaction, as well as adding significant equipment for the two existing plants of Druk-Pak and Akomex.

Druk-Pak is one of the largest manufacturers of cardboard packaging in Poland. The company has been operating for 40 years and is based in Aleksandrów Kujawski in Northern Poland. The firm focuses on packaging production for Polish and other international pharmaceutical companies. The company was the first enterprise in the Polish printing industry certified for ISO 15378. Druk-Pak maintains the latest and most state-of-the-art equipment and technology, with the highest quality and environmental protection. The firm has been listed on NewConnect, the alternative market of the Warsaw Stock Exchange, since 2010.

KPT Doradcy Podatkowi Sp.zoo represented Akomex in the transaction, with Krzysztof Hejduk, Tax Partner, and Lukasz Koziol, Senior Tax Consultant, lead the team.

Hejduk commented: “As a result of transaction two organisms was merged. Both with a lot of experience as well as with established position on the market. From a tax perspective it was a great opportunity to revise tax procedures and to implement the most effective solution which could optimize the taxation of business.”

Krzysztof Hejduk

INCLINE RECAPITALISES HARTLAND Pittsburgh-based lower middle-market private equity firm, Incline Equity Partners has announced the recapitalisation of Hartland Controls.

Hartland, headquartered in Rock Falls, IL, is a premier supplier of electrical system components to the heating, ventilation and air conditioning market, as well as other industrial end markets. Hartland is the leading provider of definite purpose contactors in North America. The company also boasts a growing portfolio of complementary products including transformers, relays and capacitors.

CEO Steve Schreiner says, “This is an exciting time for Hartland; our company is growing quickly.

Incline will give us the tools we need to support that growth.”

That growth includes continuing to build upon its presence in the contactor sector while expanding adjacent product line offerings. Incline will assist the Hartland team in developing strategic rollouts of these efforts to ensure that the company’s growth is steady, measurable and successful.

Jack Glover, a partner at Incline, adds that “Hartland is everything we look for in a company. They have a strong value-added distribution model, a proven management team and a solid financial profile, with incredible growth opportunities.”

Incline Principal Leon Rubinov, who worked closely with management to recapitalize the company, remarks, “working with the Hartland team has been a pleasure; they’ve reinvested substantial proceeds into the transaction, thus creating an ideal transaction structure. The Hartland team has built a great brand and the entire team brings a real energy to their work. I look forward to the future - which will, no doubt, be promising.”

TAMINCO CORPORATION ACQUIRES KEMIRA OYJ Taminco Corporation has completed the acquisition of the formic acid business of Kemira Oyj. The formic acid business has a global footprint and serves a number of selected markets that are driven by key global megatrends, such as animal nutrition, agriculture, water treatment and energy.

“This transaction is consistent with our strategy of making investments in niche businesses with attractive end-markets and a high level of similarities with Taminco’s core competencies. We are very pleased with the successful completion this transaction and the attractive repricing amendment of our credit agreement that we were able to execute in connection with the transaction,” said Laurent Lenoir, Taminco’s Chief Executive Officer.

Merrill DataSite acted as Virtual Data Room Provider with Alexis Fox-Mills heading the team.

White & Case acted as legal adviser to the vendor, with Timo Airisto leading the team.

Environ provided environmental due diligence, headed by Satu Juntunen.

KPMG assisted the vendor in providing due diligence and the capable team was led by Kenneth Blomquist.

INDUSTRIAL

AKOMEX ACQUIRES DRUK-PAK

Other firms assisting in the transaction include Gessel, TS Partners, Data Point and Holon Consultants.

AKOMEX ACQUIRES DRUK-PAK

DRV Corporate Finance

INCLINE RECAPITALISES HARTLAND

DRV Corporate Finance

TAMINCO CORPORATION

ACQUIRES KEMIRA OYJ DRV Corporate Finance

Tax Adviser

Legal Adviser to the Purchaser & to the Equity Provider

Virtual Data Room Provider

Virtual Data Room Provider

Financial Due Diligence Provider & Tax Adviser

Vendor Due Diligence Provider

Virtual Data Room Provider Environmental Due Diligence Provider Legal Advisers to the Debt Providers Financial Advisor to Target

Financial Due Diligence Provider

Legal Adviser to the Vendor

Acquisition International | April 2014 | 79

Doherty Advisors, LLC Doherty Advisors, LLC was founded and registered as a CTA/CPO in 2003 in New York and specializes in options trading in liquid exchange traded markets. The firm’s mantra is attractive and consistent risk-adjusted absolute returns.

Our six person team has over 100+ years of options trading experience. Currently managing upward of $300 million, we offer three programs: • Relative Value (RV) - an absolute return market-neutral strategy • Grey Swan (GS) - an equity tail risk hedge • Relative Value Plus (RVP) - a hybrid of the RV and GS, which makes it a protection and return strategy.

The flagship Relative Value options strategy trades the slope of volatility skews. Its focus is short-term, agnostic to market direction, minimal “greek” exposure”. It trades highly liquid instruments.

Mr. Robert Doherty, the CIO, since the start of his career focused on generating low risk, consistent returns by pursuing relative value opportunities in options trading. His approach is one of melding together science and art. The alpha comes from his vast experience (25+ years) in options trading. He is proud to have achieved a Sharpe Ratio of over 1.00 for a 10 year long track record. By structuring a series of highly correlated positions with derivatives and futures contracts, the portfolio manager is able to exploit pricing inefficiencies often created by natural sellers or hedgers.

Whilst being agnostic to the direction of volatility and underlying markets, we use discretionary strategy together with math to make sound relative value decisions.

400 Madison Avenue, Suite 6A, New York, NY 10017 t: +1 646 213 2310 f: +1 212 213 9170

E: ir@dohertyadvisors.com

DEAL DIARY: Real Estate Deals COMMIF ACQUIRES PARTNERSHIPS VICTORIA IN SCHOOLS PROJECT

BYTEGRID Holdings LLC, a leading data center company focusing on the nationwide acquisition, development and operation of premier multi-tenant data center facilities, recently announced the acquisition of a 70,000 square foot, Tier III data center on 5.25 acres of land in Aurora, Illinois, approximately 30 miles west of downtown Chicago.

The AMP Capital Community Infrastructure Fund (CommIF) is to acquire a 100% interest in the Partnerships Victoria in Schools Project from the Royal Bank of Scotland. This project involves the operation and maintenance of 11 school facilities located in the Greater Melbourne area for the remaining 22-year term.

Under a sale and partial leaseback agreement, BYTEGRID acquired the facility from Continental Casualty Company, an affiliate of CNA Financial Corporation (“CNA”), the country’s eighth largest commercial insurance writer headquartered in Chicago.

BYTEGRID will immediately convert the facility into a multi-tenant data center and begin leasing approximately 25,000 square feet of enterpriseclass, Tier III data center space featuring 6 megawatts of power capacity available to serve enterprise, government and service providers seeking premier multi-tenant data center space in suburban Chicago.

Greg Gerber, Kevin McLennan and Scott Merz all of global commercial real estate services firm Studley represented Continental Casualty Company (CNA) to sell its 70,000 RSF data center at Meridian Business Park, Aurora, IL to Greg Gerber BYTEGRID Holdings. CNA, one of the country’s largest commercial insurance writers, will occupy part of the facility in a sale leaseback transaction.

By selling its building and leasing back a more efficient footprint, CNA will monetize its asset, increase flexibility and reduce annual expenses while maintaining or increasing the high level reliability that it requires for its critical data through BYTEGRID’s exceptional data center experience.

BYTEGRID ACQUISITION OF

CHICAGO FACILITY FROM CNA DRV Corporate Finance

AMP Capital Investors Limited called on PwC expertise and advice throughout the project with a team consisting of Andrew Cloke advising on financial due diligence, backed up by Chris McLean on tax structuring and due diligence, Andrew Cloke with Ian Bennett working on deal modelling.

McLean said: “We have an experienced team who are together able to provide a broad range of specialist services with advice tailored to our clients’ needs. This allows us to provide market leadChris McLean ing deal solutions to our clients in the infrastructure industry.”

He added: “We have deep longstanding relationship with the AMP and they are a high priority client of ours.”

The asset was financed before the global financial crisis. The complexities were mainly associated with the financing structure. PwC’s services involved providing the existing financiers an exit from the project in a manner that preserved value for AMP while minimising consent requirements from stakeholders, such as the government.

Ian Bennett

The Public Private Partnership (PPP) acquisition of the Victorian schools by CommIF complements the existing social infrastructure assets held by CommIF in Australia and New Zealand. The investment provides further geographical diversification following acquisitions of similar PPP projects in South Australia and South East Queensland over the past 18 months.

COMMIF ACQUIRES PARTNERSHIPS

IN SCHOOLS DRV VICTORIA Corporate Finance PROJECT

WEALTHCAP PROVIDES FUNDING pbb Deutsche Pfandbriefbank has refinanced the purchase of real estate by investment fund provider WealthCap. The contracts for the ten-year facility – with an approximate volume of around € 30 million – were signed in December 2013, and the loan disbursed in January 2014.

The portfolio consists of commercial properties sold and rented back under a longterm lease by Munichbased wholesale agricultural traders BayWa AG – for example, trading operations for agricultural products, as well as DIY and gardening stores. The properties are mainly located in Bavaria, as well as in Baden-Wuerttemberg, North Rhine-Westphalia and Saxony. pbb Deutsche Pfandbriefbank is a specialist bank for commercial real estate finance and public investment finance. Together with Germany, pbb’s focus is on Great Britain, France, the Nordic countries and countries in Central and Eastern Europe. The Bank is also active in other selected European countries. The bank plays an important role in supplying credit to the real estate industry and supports the public sector with financing for projects and measures designed to improve public infrastructure.

In real estate financing, pbb’s range of services is targeted at professional national and international real estate investors such as real estate companies, institutional investors, real estate funds as well as SMEs and customers with a regional focus in Germany. The focus is on the less volatile real estate types, including offices, retail properties, apartments and logistics. pbb focuses on medium to large-scale financing arrangements, and offers its customers local expertise and international know-how.

The WealthCap team was led by Thorsten Diepold and Werner Harteis heading the team.

Dr. Tobias Hagner

www.satell.de

SATELL Rechtsanwälte Steuerberater assisted in the transaction with the team being headed up by Dr. Tobias Hagner. t.hagner@satell.de

WEALTHCAP PROVIDES FUNDING

DRV Corporate Finance

Financial Due Diligence Provider & Tax Adviser Legal Adviser to the Debt Providers Advisers

Debt Providers, Financial Adviser to the Purchaser, Financial Adviser to the Equity Provider & Debt Advisory to the Equity Provider Legal Adviser to the Debt Providers Legal Adviser to the Purchaser & Legal Adviser to the Equity Provider

Acquisition International | April 2014 | 81

REAL ESTATE

BYTEGRID ACQUISITION OF CHICAGO FACILITY FROM CNA

DEAL DIARY: Support Services Deals MAJORITY STAKE OF IT INVEST ACQUIRED

ECI Partners has acquired Avantia Group, which operates the online consumer home insurance brand HomeProtect, in a Management Buyout (MBO) worth £57m.

Da Vinci Private Equity Fund II acquired a controlling 63% stake of IT Invest. The Russian Funds group and company management remain as shareholders of IT Invest with the remaining 37%.

Investment will also support company development via increasing company’s capital to RUB 350m.

Avantia has invested heavily in R&D, capitalising on its rich domain knowledge, which allows the business to offer home insurance to many households when others consider it too difficult. The business maintains the most effective online quote ability of any household insurer in the UK, returning a quote to over 97% of applicants. More than 80% of its new customers are in what other insurers would deem to be ‘difficult to insure’ risk categories.

Phillip Walter, CEO of Avantia and HomeProtect said: “We are delighted to be working with ECI to further grow HomeProtect and our other evolving brands. This investment from ECI will allow us to grow faster organically as well as by acquisition, to offer more customers the peace of mind that HomeProtect delivers.”

Da Vinci Private Equity Fund II is an investment fund managed by Da Vinci Capital Management, focused on investments in financial infrastructure, a broad sector covering everything from stock exchanges to financial IT services, brokerages and B2B providers. In 2013, the European Bank of Reconstruction and Development (EBRD), acting as a cornerstone investor, committed $30 million to the fund which will target Russia and the rest of the Commonwealth of Independent States (CIS).

In the summer of 2013 Yurbureau LLC commissioned by DVCM have conducted legal due diligence in respect of IT Invest. The procedure was led by managing partner Elena Kazankova and advisor Timur Niazbaev.

Humatica supported ECI with the assessment of Avantia’s organisation and leadership.

Andy Cook, Humatica’s UK Vice President, said: “We are enthusiastic about the opportunity Avantia and ECI have to deliver the investment plan together. We wish all outstanding success.”

Yurbureau LLC experts carried out a comprehensive audit of the IT Invest, including compliance with the requirements imposed on the company as a professional participant of the securities market. The audit examined the documents and information provided by IT Invest, and other data from open sources.

Humatica works with leading private equity investors and corporations to make highimpact changes in the way they are organised and managed. Its hard-facts approach enables leaders to dispel complacency and unlock the value of their business.

Yurbureau LLC works on the market of legal services in Russia since 2006. The main activities of the company are: support for real estate transactions, mergers and acquisitions, conducting legal due diligence procedures of different investment objects.

ECI PARTNERS ACQUIRE AVANTIA GROUP

DRV Corporate Finance

Management Team Due Diligence Provider

MAJORITY STAKE OF IT INVEST ACQUIRED

DRV Corporate Finance

Legal Due Diligence

Financial Due Diligence Provider Commercial Due Diligence Provider Pensions and Actuarial Adviser

NVM EXITS FROM ALARIC SYSTEMS A syndicate of venture capital investors led by NVM Private Equity (NVM) has made a successful exit from Alaric Systems. London-based Alaric has been acquired by a subsidiary of US based NCR Corporation, in an $84M deal.

Mike Alford, MD of Alaric Systems, comments: “NVM has been a major support over the years providing both finance and commercial input, and Tim Levett has been our chairman for Mike Alford the last five years. Finance from NVM and Foresight has helped to ensure we have got to the stage where things are really booming. NVM’s faith in our vision back in 2000 is paying off now.”

Tim Levett, NVM Private Equity, comments: “Alaric has been a rewarding investment in every sense. Over the long period of our investment, we have always believed in the concept of innovative card authorisation and fraud detection systems, and it is a credit to the team that they have taken their products through to becoming technical market leaders in the payments market. Technical excellence has been the key, and Mike has built a world leading team to deliver this. We have enjoyed the journey.”

NVM are among the leading investors in UK SMEs and were advised by Larry DeAngelo, who runs the Technology and Services Merger and Acquisition team at SunTrust Robinson Humphrey Inc. (STRH), a leading full-service corporate and investment bank. STRH is dedicated to helping grow clients companies through a comprehensive range of strategic advisory, capital raising, risk management, financing and investment solutions. They also offer a complete array of sales, trading and research services in both fixed income and equity.

NVM EXITS FROM ALARIC SYSTEMS

DRV Corporate Finance

Corporate Finance Adviser to NVM

Legal Adviser to NVM

Financial Due Diligence Provider Legal Adviser to NCR

Legal Adviser to the Equity Provider

Acquisition International | April 2014 | 83

SUPPORT SERVICES

ECI PARTNERS ACQUIRE AVANTIA GROUP

DEAL DIARY: TMT Deals ADAR SECURES FUNDING

HISCOX TO ACQUIRE DIRECTASIA

Chicago-based cloud computing company, ADAR IT, has secured $2.4m in Series A funding from MK Capital. Alongside this, Adar has engaged BOSI Global as an operating partner to build on 84% compounded annual growth and 97% customer retention.

Global specialist insurance group, Hiscox, is to acquire its direct-to-consumer online operation DirectAsia.

ADAR IT is an innovative cloud IT services company bringing enterprise-level cloud solutions to small and medium-sized businesses. Each customer is set up with their own ADAR Private Cloud™ - so their entire IT infrastructure gets virtualised. Power outages and disasters affecting an office infrastructure no longer affect productivity or data security. Individuals can access their entire virtual desktop from anywhere with a high-speed connection - using even a tablet or smartphone. Customers pay a flat monthly fee to access this end-to-end technology on demand—from desktops, servers, and data storage—to unlimited technical support and IT consulting.

“We are a next-generation managed service provider that cares deeply about the customer experience,” says CEO and co-founder Vadim Vladimirskiy. “We bundle all of the IT services a business owner needs into a secure, sophisticated and reliable solution. One fixed monthly price covers all things IT.” BOSI Global LLC represented ADAR IT in the transaction, with the team being led by founder, Joe Abraham, and including CEO Charlie McClary, and CSO Barry Saltzman, CSO.

Joe Abraham

Charlie McClary

Abraham commented: “We worked with them for several months leading up to the funding event. Our initial engagement was to come in and scale the company to 10x revenues. As we built the plan for sustainability and scale, we identified a need for growth capital. So we teamed up with the company CEO to find the right funding source - and led the company through the funding event. Now that the funding is complete, we’re engaged as the Operating Partner to deploy the funding and operate the company through its eventual acquisition.”

ADAR SECURES FUNDING

DRV Corporate Finance

Founded in Singapore in 2010, DirectAsia’s primary business is motor, one of the few non-discretionary insurances in Asia, with ancillary lines in travel, personal accident, healthcare and life. DirectAsia has a strong business model, operates in markets where agent based channels with high distribution costs predominate, and uses market leading rating mechanisms. It has over 54,000 customers, employs 140 people across the three locations in which it operates and in 2013 had gross written premiums of USD25.3 million.

The business will continue to operate under the DirectAsia brand and with the existing local management team, which will be led by Steve Langan – Hiscox UK and Europe MD and now CEO of DirectAsia Group.

CEO of Hiscox, Bronek Masojada, commented: “DirectAsia is a challenger brand with real potential.

It gives Hiscox a 21st century distribution platform in Asia that leapfrogs traditional routes to market.

DirectAsia complements our direct-to-consumer businesses in Europe and the US, and in time, we will use it to distribute Hiscox products.”

Aon Benfield Securities was engaged as the sole advisor to Whittington Group and the private equity owners of DirectAsia over the last two years to secure a buyer for DirectAsia.

Marc Beckers lead the team and commented: “The business is a very rare direct play in Asia, focusing initially on motor, but rapidly expanding into other lines of business such as travel, accident and term life. Hiscox’s Asia strategy will be built around DirectAsia and they consider the company to be an exciting challenger brand in the region.”

HISCOX TO ACQUIRE DIRECTASIA

DRV Corporate Finance

Financial Adviser to the Seller

ALBION VENTURES INVESTS IN EGRESS Albion Ventures LLP, one of the UK’s leading venture capitalists, has made an investment of £2.2m in Egress Software Technologies, the market-leading provider of on-demand Cloud-based email and file encryption services to organisations in the public and private sectors.

Established in 2007, Egress launched their awardwinning SaaS-based information security platform, Egress Switch, in 2009. Since its launch, Switch has become one of the market’s leading email and file encryption solutions, and already dominates the local authority space, with over 70% of councils registered as subscribers of the service. The uptake of Switch has also been recognised across central government and the NHS, as well as a growing ‘Third Sector’ made up of organisations such as charities, social care providers, housing associations and schools. In the private sector, healthcare providers, including HCA Healthcare (the world’s largest private healthcare provider) and Spire Healthcare (the largest provider in the UK), have also adopted Switch.

Waterfront Solicitors LLP represented Egress Software Technologies Limited, who is a long-standing client of the firm.

Matt Cunningham, partner and Head of Corporate at Waterfront Solicitors LLP, lead the team, assisted by Patrick Peake, a solicitor in the firm’s corporate team, and Fifi Conroy, a trainee solicitor.

Matt Cunningham

Cunningham commented: “It’s great to see a client we have acted for since incorporation go on to develop into a successful business. I’m really pleased for Tony and all the team at Egress. With the investment and the support of the experienced team at Albion they will be able to take the business to the next level.”

Other firm’s assisting in the transaction included Bird & Bird, Crowe Clark Whitehill and Executive Elect.

ALBION VENTURES INVESTS IN EGRESS

DRV Corporate Finance Legal Adviser

Legal Adviser to Albion Ventures Financial Adviser Legal Adviser to the Seller

Financial Due Diligence

TMT

Virtual Data Room Provider to the Seller

84 | Acquisition International | April 2014

Management Due Diligence

DEAL DIARY: TMT Deals INVESTMENT IN I-TEN Innovacom, Demeter, Rhône Alpes Création and R2V have invested €3.2m in I-Ten, a young innovative company which manufactures microbatteries.

The products developed by I-TEN are the only CMS (Component Surface Mountable) batteries to date and can therefore be integrated into electronic circuits like any other passive component without specific adaptation of the method of installation or modification of automated processes in the electronics industry: their resistance to extreme temperatures make it a substitute for button and other small flammable batteries.

Finally, these components meet eco-design standards: they are rechargeable, non-flammable, contain no heavy metals or liquid electrolytes and do not require specific recycling processes other than electronic cards.

The funds raised today by I-TEN are intended to move from laboratory scale development of its industrial manufacturing process to achieve pre-sets that will be used to conduct tests qualification in different target applications.

Marks&Clerk France is one of the leading intellectual property practices in Europe . The firm assisted in the transaction with the team being led by Christian Nguyen and Sophie Esselin (Co-managing partners) who assured the investors that I-Ten patent portfolio created a good barrier to entry of competitors.

Other firms which assisted in the deal included Jones Day and Cabinet Lamy et Associés.

INVESTMENT IN I-TEN

DRV Corporate Finance

NOVISOURCE LISTED FOR FIRST TIME

DISCOVERY ACQUIRES RAW

Consultancy Company Novisource was listed, for the first time, on the NYSE Euronext Amsterdam

Discovery Communications has acquired Londonbased independent production house, Raw.

Novisource has an experienced board formed by Willem van der Vorm (CEO, formerly director for pensions ASR) and Bert Winkoop (CFO, previously to the former CFO of listed UCC NV). “With this listing, we are at the beginning of a new phase with regard to the further development of our company. The past three years we have worked hard to make Novisource ready for an IPO, creating new opportunities for future growth can be “further exploited” says Willem van der Vorm.

The acquisition is a key step in Discovery’s strategy to strengthen the company’s creative pipeline, diversify its content creation outside the United States, and formalize an already strong relationship with one of the top production companies in the world. The deal expands the award-winning production company’s global infrastructure, distribution platforms, and investment resources overall while preserving Raw’s independence and commitment to innovative and gripping storytelling.

Xence Finance was and is involved in all strategic and financial issues concerning Novisource.

Xence Finance was also involved in the first acquisition of Novisource after the listing.

The team at Xence was led by partner, Guido Nienhaus, who commented: “Xence Finance advised (the shareholders of) Novisource on the transaction structure, on the financial modelling and in the negotiation Guido Nienhaus process.

Nienhaus@xence.nl www.xence.nl “The listing will facilitate future growth of Novisource by acquisitions.”

Xence Finance is a small corporate finance & strategy firm focused on advising entrepreneurs on: Strategy; Acquisition finance; Buy, build & exit strategies; Management Buy Out’s; and Recovery.

Xence Finance is focused on people and knowledge intensive sectors like ICT, telecom, services, software/SaaS and healthcare.

NOVISOURCE LISTED FOR FIRST TIME

DRV Corporate Finance

Discovery has worked with Raw since its inception in 2001, commissioning successful series including GOLD RUSH for Discovery Channel, UNEXPLAINED FILES for Science and Discovery Networks International and DANGEROUS PERSUASIONS for ID. Under the agreement, Raw will be able to expand into scripted programming as well as produce high-quality independent films. Raw will continue to operate independently from its London headquarters, and all of Raw’s current staff will be retained.

“Discovery is committed to working with the best creatives in the business, and Raw stands apart not only as one of the finest in the UK, but also one of the best in the world,” said Lee Bartlett, President, Discovery Studios and Production Group. “We want Raw to maintain the identity and culture that has allowed them to produce such high-quality programming. We are looking forward to Raw infusing our everexpanding creative pipeline with compelling stories that will be seen on Discovery’s networks around the world.”

Grant Dawe LLP assisted in the transaction.

DISCOVERY ACQUIRES RAW

DRV Corporate Finance

IP Due Diligence Provider

Financial Adviser to the Vendor

Legal Adviser

Legal Adviser to the Equity Provider

Legal Adviser to the Vendor Tax Adviser

TMT

Legal Adviser to the Purchaser

Acquisition International | April 2014 | 85

A privately-held, independent manufacturer of commercial LED lighting is offering exclusive technology license opportunities.

The Company was founded in 2011 and the founders have a long history of developing technology based companies with patented and proprietary products.

Through a proprietary process, the Company designs, develops, and manufactures 4’ LED lighting tubes. They began marketing their products in late 2012. The products have been tested, validated, and certified by UL, Intertek and Design Lights Consortium (DLC).

The product is designed to replace the current fluorescent lighting tubes in the commercial and industrial sectors.

The Company’s philosophy is to license manufacturing partners to market, manufacture, and sell its proprietary products throughout specified territories in the United States and abroad. This allows the Company to increase capacity while mitigating the increased costs associated with logistics, import/export duties, customs, and tariffs; and pass on the cost savings to the end-user.

The proprietary products use far fewer components than competitor’s resulting in one of the lowest selling prices in the market.

The total number of fluorescent tube lighting in the world is estimated over 2.3 billion. The manufacturing partners will be well positioned to capture an increasing amount of market.

The benefits of LED lighting is: immediate reduction in lighting bill of up to 75%, no yearly bulb/ballast replacements, long lifespan, over 25 years of operation and ecologically friendly and recyclable.

Investment Highlights - Manufactured in your country - Low capital investment relative to return - Patent pending “transformerless” technology with unparalleled efficiency - Full 25 year warranty, longest life span in the industry - Entering market during growth phase - Access to the Company’s new products and R&D - Strong growth opportunities and increased market share - Increased utility savings and rebates for end-users

Financial Summary

Opportunity The Company is seeking partners to establish technology license agreements abroad. License fees start at $400,000 depending on the country. This is an opportunity to quickly enter an emerging market with a cutting edge product, while benefiting from the company’s product development.

For more information contact Michael Benson: mike@empirebusinesses.com 1-440-461-2202

DEAL DIARY: TMT Deals CAPIDEA INVESTS IN XSTREAM Danish private equity fund, Capidea, has invested in Xstream to become the majority shareholder in the company.

Over the recent years, Xstream has gone through a rapid development and has had huge success with its global expansion strategy, including, major international customer wins, partnerships, establishment of new offices and winning several industry awards. With Capidea as co-owner, Xstream gets the muscles to further accelerate the company’s global ambitions and bring their award winning video management system, Xstream MediaMaker™ to new markets. Xstream is now embarking on a large-scale international effort with a clear vision of further strengthening their position as the preferred provider of premium end-to-end video management system for delivery of simply smarter OTT and TV Everywhere solutions, worldwide.

“Our professional video management streaming software, Xstream MediaMaker™, has achieved great recognition in the industry and our proven track record and success has given us the courage and desire to compete with the major competitors. With the new ownership structure we are stronger than ever and well prepared for future competition of winning new large international customers.” Said Frank Thorup, CEO and co-owner at Xstream.

Merrill DataSite assisted in the transaction as virtual data room provider, led by Alexis Fox-Mills.

EY provided financial advice to the equity provider, led by Lars Lyster, whilst PwC acted as the vendors’ financial adviser, with Carsten Yde Hemme leading, and Plesner acted as legal adviser to the equity provider, headed up by Henrik Rossing Loenberg.

CAPIDEA INVESTS IN XSTREAM

DRV Corporate Finance

MONITISE ACQUISITION OF POZITRON Monitise plc (LSE: MONI.L) (“Monitise”, the “Company” or the “Group”) announces the acquisition of Pozitron Yazilim A.S., a privately-owned mobile technology company based in Turkey, delivering mobile banking, payments and commerce solutions to businesses in its home market, the Middle East and internationally.

“This acquisition of Pozitron further reinforces our leading position as a global technology enabler at the heart of the Mobile Money ecosystem,” said Monitise Group Chief Executive Alastair Lukies. “It comes at a time when we are seeing increasing demand for interoperable Mobile Money services as payments become more digital by the day, not only in Turkey, Europe and the Middle East but also around the world.”

Merrill DataSite represented Pozitron providing virtual data room due diligence.

Merlin Piscitelli, director Merrill DataSite commented: “Merrill DataSite were led to the transMerlin Piscitelli action through a referral from the acquirer, Monitise, who strongly suggested Pozitron use our professional VDR system to facilitate due diligence.

Both parties wanted a quick process, so there was no disruption to the business – everyone was extremely happy with the speed of upload and features that facilitated this collaborative process.”

Merlin.Piscitelli@merrillcorp.com www.datasite.com

MONITISE ACQUISITION OF POZITRON

DRV Corporate Finance

TVBEAT SECURES FUNDING TVbeat, a London start-up that provides realtime television ratings, has secured $2m funding.

UK-based Episode 1 and Czech-based Credo Ventures have backed the firm to develop its realtime TV analytics stream. With the funds, the company hopes to expand its presence in new markets and further develop its platform.

Its analytic capability covers pay TV platforms including cable, satellite, VOD and OTT, as well as IPTV. Having piloted its services to broadcasters, advertisers and pay TV platforms in Slovenia, Croatia and Serbia, TVbeat founder Robert Farazin plans further expansion in Europe this year.

Of the recently-secured funding, Farazin commented: “We are thrilled to see Episode 1 and Credo Ventures recognising the huge potential that our platform offers the media industry.”

Simon Murdoch of lead investor Episode 1 added: “We are excited about the disruptive potential of TVbeat because by drawing data from millions of views on a second by second level, across all platforms and devices, TVbeat represents a new generation of TV analytics, providing new insight in realtime into audience behaviour for live and time shifted viewing.”

TVbeat will expand its market appeal to additional customer bases, he explained: “Realtime insight into customer behaviour and habits helps pay TV providers to adjust their offering accordingly. Initial feedback from platforms is great and I expect this to be a strong portion of our business soon.”

De Franceschi & Bora assisted in the transaction with Vladimir de Franceschi leading the team.

TVBEAT SECURES FUNDING

DRV Corporate Finance

Virtual Data Room Provider Virtual Data Room Provider Financial Adviser to the Equity Provider

Legal Adviser to the Purchaser

Financial Adviser to the Vendor

De Franceschi & Boray, LLP

Legal Adviser to the Equity Provider Financial Adviser to the Vendor

TMT

Financial Adviser to the Vendor

Legal Adviser to the Equity Provider

Acquisition International | April 2014 | 87

playHARD Acquisition International’s monthly lifestyle section

Palais Amani - Hotel Fez, Morocco

Looking for a Snow Fix Treble Cone, Wanaka NZ

Hotel Review

playHARD

Treble Cone, Wanaka NZ

Treble Cone, Wanaka NZ

South g n i k o Lo ix now F S a r fo

With the late start to the European winter providing fewer days to stretch out ones snow legs, the idea of extending the season with a visit to a snow pack southern hemisphere country like New Zealand becomes something serious to ponder.

New Zealand has a long history with snow sports, offering some of the best alpine conditions in the Southern Hemisphere. For international visitors, the ski areas of the Southern Alps (Queenstown & Wanaka) are the most visited with Treble Cone being the largest and longest. Treble Cone had an impressive season in 2013, maintaining a 3 meter plus base on the higher slopes for much of the winter.

Treble Cone, Wanaka NZ is the only ski resort in the Southern Hemisphere offering popular European ski improvement programme ‘Sofa Ski School’. The programme run by Klaus Mair, author of the bestselling ski instructional DVD “Sofa Ski School – from Blue to Black Diamond” and his team of internationally picked ski coaches, provides a high intensity ski technique camp to small groups of intermediate to expert skiers. The programme offers a social blend of on and off snow activities, that leave guests both better equipped to master the most difficult slopes as well as self-diagnose and correct future technique challenges.

Sofa Ski School run 6 x 5 day programmes throughout July and August 2014. For more information visit www.treblecone.com/sofa-ski-school To get an idea of what to expect have a look at “Sofa Ski School – From Blue to Powder“ the brand new instructional ski DVD from Klaus Mair, which was filmed at Treble Cone / NZ. Now available on www.sofaskischool.com

Treble Cone, Wanaka NZ

Breaks include The ‘From Medina to Plate’ Cuisine an upgrade with room ic a three night stay in a class Medina tour day full a ity), labil avai to on arrival (subject al Hammam ition p, a trad with cookery class, a baking worksho and daily er dinn mic rono Duo, a Grande Finale 6 course gast 00 based €15 from d price is age Moroccan breakfast. This pack on two sharing for three nights.

B&B is priced from £150 per night

based on two sharing.

Hotel Review

playHARD

r, Oued Zhoune, www.palaisamani.com 12 Derb el Mite Fes Medina, 30000, Morocco

Palais

Aman

i - Fez , Moro cco

This month Acquisition International had the pleasure of going to stay at the Palais Amani in Fez, Morocco. The Palais Amani is a boutique style Riad nestled neatly in the walls of the city’s largest Medina, Fes el Bali. Fes el Bali is listed as a UNESCO World Heritage Site and is one of the world’s largest car-free urban areas.

We were met on arrival at Saïss Airport and made our way on a scenic if not slightly chaotic journey into town. Upon arrival at the wall of the Medina (and not where we expected to be dropped off!) we shuffled out of the car and were met by two of the hotel’s porters. They promptly picked up our over-packed luggage and indicated for us to follow them as they took off through a narrow entrance to a cobbled street of the Medina.

Following like sheep, we rushed to keep up and after a short walk we reached the imposing entrance to the Palais Amani. Two elaborately carved wooden doors opened up to us and we were welcomed into what felt like another world. Juxtaposed to the hustle and bustle of the Medina streets, the Palais Amani was beautiful, delicate and serene.

From the minute of our arrival we were made to feel at home; from the hotel’s staff to its owners – we were welcomed like old friends.

Sitting with our new friends in the citrus tree filled courtyard, over a cup of Moroccan Mint Tea (which became a staple in our daily routine) we were introduced to the hotel and its recent history, including the full three and a half year renovation its current owners had lovingly treated it to. Every inch of the hotel’s design has been carefully planned; from the intricately placed Moroccan zellige tiles to the striking antique style Moroccan lanterns and traditional carpets. The renovation has been done in impeccable taste.

Having been familiarised with our new surroundings we were shown to our room, an Exceptional Suite on the first floor of the inward facing Riad. This extensive suite had a master bedroom, dressing area, central salon and extra single bedroom, perfect to fit the three of us! The bathroom was spacious and luxurious with a twin head rain style shower and twin basins.

During our 3 days we enjoyed every inch of the hotel and what it had to offer; from the restaurant to the roof top bar to the spa.

There was no shortage of food in Fez; any self-proclaimed foodie should place Morocco at the top of their list when choosing the next destination! What’s more, the Palais Amani provides a perfect base to start the journey into Moroccan cuisine. Each morning we came down to the dining terrace to enjoy a traditional Moroccan breakfast, in the evening we had the choice of the à la carte menu or a three course set menu d’hôtes, and whenever it took our fancy there was a superb selection of tapas (perfect to enjoy on the rooftop terrace). The hotel is also renowned for its day-long cookery course, ‘From Medina to Plate’.

‘From Medina to Plate’ was the perfect way to experience the real Fez. We fought the crowds to find the plumpest chicken in the market, stopped in at local eateries that would never have been found without the expert guidance of our chef and tour guide, selected the freshest ingredients, and to top it all off, we learnt how to transform them into a delicious dish when we arrived back at the hotel.

The Palais Amani has a separate kitchen on the first floor of the building and it’s the perfect place to teach novices the skills required to create a Moroccan masterpiece! The head chef rounded us up and patiently demonstrated - over a two hour lesson - how to cook an authentic chicken tagine with a smoked aubergine salad and following on, a fresh orange salad seasoned with some of Fez’s most favoured ingredients. The best part of the day came when the oven timer went off and we got to sit down on the terrace to enjoy the fruits of our culinary efforts! The day was rounded off with a lovely gift from our head chef, a Palais Amani apron, a mini basket of spices and a detailed recipe sheet – perfectly preparing us to recreate our new dish at home.

Our final treat for the weekend was a trip to Les Bains Amani to enjoy a traditional hammam (that said, I tend to believe that this was more luxurious than most!). Every inch of our bodies was scrubbed, massaged and bathed. We left not only more relaxed, but better friends than we were when we entered!

Absolutely nothing was left to chance at the Palais Amani, our every whim was catered for and our experience of Fez was a fine one because of it. If you are in Morocco for business, or if you’re planning a weekend break, Acquisition International highly recommends a visit to the Palais Amani.

VDB

Loi

www.vdb-loi.com

VDB Loi is a leading law and tax advisory firm with more than 60 transactional lawyers and tax advisors across our offices in Cambodia, Indonesia, Laos, Myanmar, Vietnam and our liaison office in Singapore. We provide the highest quality solutions for transactions and taxation.

VDB Loi offers a combination of highly experienced transactional lawyers and specialist tax advisors. This combination, where half of the firm’s fee earners are legal professionals, and half are tax professionals, is unique in Southeast Asia and highly effective for transactions in M&A, investment, resources, real estate, energy and infrastructure, and top-end corporate tax structuring.

VDB Loi brings a new approach to professional services;

we like to do things differently.

Along with bringing legal and tax services together under one roof, we believe strongly in the value of results – that’s why we bill based on outcome, not time.

Due Diligence - Maximising Success URS Infrastructure & Environment UK Limited

“Robust due diligence can make a strong contribution to the overall deal, helping to meet targets and objectives. Allowing sufficient time and funds to conduct thorough due diligence can bring substantial benefits and help to avoid ’down the line’ surprises.”

Conduit Consulting LLC

”Focusing on the deal’s strategic intent is imperative to maximising M&A success. When performing due diligence, evaluating the target and the future-state combined company against qualifying criteria is critical.”

M&A – Making the Deal Work Conduit Consulting LLC

“If you want to have reasonably accurate growth and value generation targets, it is imperative to include business function strategists who have considerable operating and business transformation experience on the deal team.”

M&A SUCCESS Maximising M&A Success

Maximising M&A success in 2014 Lara Morgan, Founder of Company Shortcuts and voted one of the UK’s 10 Most Powerfull Businesswomen

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A business will only ever be sold for the price that someone is prepared to pay and I was often informed that deals mostly collapse because the owner founder has unrealistic expectations of what their enterprise is worth. The buying or selling process is hugely distracting to those involve and the damage of failed deals can be significant to a company so I believe you need to be assured of a war chest buffer and a sold sales pipeline that does not required your involvement if you are going into any distracting process.

- Solid well contracted Order book – without client dependency - Sense check and perhaps refresh your Reputation/image - How good indeed is your Reputation? Will your customers back up your belief that you are good in this area or are you actually world class and need to value that?

To really maximize exit, your timing has to be excellent – not to mention your administration. I would suggest the year ahead would be better used to get the house in order, making the most of the opportunities ahead by pre-preparing your data-room and paperwork and by ensuring you have the most suited team around you to maximize the deal prospects and most suitable terms. A well-grounded and sector experienced team can significantly add value to your deal – my lawyer had previously sold a company to the Private Equity player whom bought us, that in itself was very useful.

Are you aware of the quality of your systems and process, I made the mistake of not really valuing the brilliance of our data, CRM and efficient systems and processes.

I am not very qualified to comment on the idea of acquisitions, I have only made one, it went ridiculously well despite massive challenges of being a manufacturer, in a foreign country with huge growth pressures. I suspect both partners worked very hard and the great culture the business owner had already created made life much easier. It was fantastic working with great people in the Czech Republic. One thing I know, the legal costs of that acquisition – which were more expensive than the acquisition itself, gave me the best return on investment I have ever had.

On the topic of mergers, I am afraid I have rarely heard of raving success stories, so rather I comment on the importance of maximising the value of your business before making acquisitions or exit?

The Company Shortcuts site provides a myriad of useful templates to drive valuable growth acceleration. The following summary list is to be well considered and rigorously reviewed before actually beginning starting off on the M&A road of any type.

Too many companies are not 100% in control of lean finances, they have not really staked their claim to a wholly clear strategy and the owners are hiding skeletons in the cupboard which will be discovered, causing a devaluation of the price.

When entering any kind of deal, make sure you have: - Healthy cash flow www.acquisition-intl.com

Product quality and longevity is a part of your value? There is much to be considered in this area.

Perhaps you should start doing Competitor analysis – do you know whom you think will want to buy your company? Often people do.

Some buyers buy and value the people stuff: - Skills & knowledge: Employees skilled and knowledgeable BUT ALSO shared skills - Cohesive management team with regular progressive meeting record and focus action plans - KPI aligned Roles: Clarity and completeness of all Business functions Accounts / People care / Sales / Purchasing / IT etc.

- CSR Policy in place and delivering additional value and benefit to company as a whole? Shared with team / celebrated by team Get yourself prepared for the emotional journey of M&A Other assets you should consider are: - Product Development Process - Physical Assets – assessment of added value (office refurbishment / factory ownership / land ownership?) The asset register of the business should be constantly maintained - Market Penetration & Location - Website modernity and momentum should be maintained at all times - Use of this sales channel > and any other emerging new sales channels?

- IP / Partnerships / Licenses all being under control, stable and in positive state?

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M&A SUCCESS Maximising M&A Success

Mergers and Acquisitions: how robust is your due diligence?

By Jim Tennent – Director of due diligence

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Employee benefit, due diligence and adding value We are all aware that following a robust due diligence programme is an absolutely critical part of any deal-making process in the merger and acquisition (M&A) arena. Indeed, it would be a foolhardy group of investors who proceed with deals without analysing every single aspect of the management buy-in, buy-out, merger or acquisition that they are about to complete. But just how robust is the due diligence programme they are following?

sense for all companies to regularly conduct a full audit of their existing employee benefit programme.

The overriding perception of purchasers and vendors alike has always been, and still is, that when considering an employee benefit programme, the biggest and perhaps the only risk they could potentially expose themselves to is that associated with a defined benefit (DB) scheme.

However, experience has shown that such superficial analysis of an employee benefits programme invariably leads to greater risks and significant additional unforeseen liabilities.

This audit is particularly effective prior to the sale of any business. Not only will the audit ensure there are no potential risks or liabilities which the buyer could use as a means of reducing “price” but perhaps more importantly will identify potential cost savings which could significantly increase “exit value”.

The potential for higher risks and greater costs is not restricted to just DB schemes; defined contribution schemes and the ancillary benefits all have their potential pitfalls too. Despite this, they are often given low priority and minimal scrutiny, or overlooked completely.

Case Study Take the following example, where such a narrow-based review of the existing employee benefit structure resulted in significant additional costs for the purchaser.

We were introduced to a new client, who had recently purchased a competitor. Whilst due diligence had been carried out on the purchaser’s existing DB pension scheme, the ancillary benefits had been ignored.

During the post-deal harmonisation of the employee benefits programme, two employees were identified who, whilst prior to the purchase had been eligible for full life cover, at the point of completion had been absent from work with terminal illnesses. As a consequence, they were not eligible to be insured under the new company policy until they actively returned to work which, unfortunately, was never going to happen. Due to the inevitability of their respective conditions they were uninsurable elsewhere, leading to the company having to self-insure the liability - £1.1million.

Regular audits Employee benefit due diligence, however, should not be the sole preserve of the merger and acquisition arena. It makes complete business

www.acquisition-intl.com

Employee benefit due diligence seeks to identify the potential risks, liabilities and cost savings that exist within a company’s employee benefit programme, including pension provision, death benefit cover, health insurance, HR data processing and validation, IT systems and time management capabilities.

Case Study We were asked by a PE House to carry out an Employee Benefit audit on one of their portfolio companies which was being sold. We identified a cost saving on their Employee Benefit programme of circa £75k. The business was sold 14 months later for a PE multiple of 5.5x therefore increasing exit value by approximately £412k.

The Mattioli Woods perspective The Mattioli Woods group has extensive experience of the employee benefit due diligence process, which has been gained over a twentyyear period. During this time, we have, on reviewing employee benefit programmes on behalf of banks, venture capitalists, corporate finance teams, accountants and lawyers, uncovered significant potential risks and liabilities and identified significant additional costs and real savings for their clients.

The advantages of employee benefit due diligence are clear and yet it remains an area that receives little attention. Our team has spent years forging strong links with institutional investors, corporate finance teams and legal advisers, preparing pension and ancillary due diligence reports that have revealed hidden risks, significant potential liabilities, identified sizable cost savings, suggested cost-effective workable solutions and provided valuable cautionary advice to purchasers and vendors alike.

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www.acquisition-intl.com

M&A SUCCESS Maximising M&A Success

Maximising M&A Success: The Human Dynamic is Critical Robin Murray Brown of executive search firm Tyzack

Few will argue that the economic crash that started in 2007 is the worst global recession since World War II. The causes have been well documented and need little additional comment. What does deserve scrutiny, however, is what lessons have been learned – and whether they are the right ones to prevent another, even similarly severe, global crash. If historical considerations are anything to go by, the answers are not encouraging.

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According to International Monetary Fund data, global economic activity strengthened during the second half of 2013, and is expected to improve further in 2014–15, largely on account of recovery in the advanced economies. Despite some fragility and downside risks, the general mood is optimistic.

Markets appear buoyant and with stock markets riding an upward curve, senior executives and boards will need to demonstrate sustained growth to support their trading multiples and meet investor expectations. If this cannot be achieved organically, then the pressure to pursue inorganic growth starts to mount. Data released in January 2014 by Dealogic show global M&A volume in 2013 reached $US2.91tr, up 9 percent on 2012 ($2.68tr) and the highest annual total since 2008.

Does this suggest that the animal spirits of the past are returning to the corporate world? Economic stability and low interest rates are certainly encouraging management and boards to start planning transformative deals, although there doesnʼt yet appear to be a “bull-at-the-gate” approach as Dealogicʼs data demonstrates: despite an increase in M&A volume in 2013, actual deal activity for the same period was down 15 percent (37,212 deals), the lowest level since 2005.

There are many reasons for the drop in the number of deals being executed, but what is certain is that with market conditions changing rapidly, competition on a national and global level intensifying, increasingly shorter product life cycles and technological innovation, companies are having to re-examine the traditional methods and strategies for expanding their businesses through M&A. Empirical evidence suggests that between 50 to 70 percent of M&A deals fail to enhance shareholder value. To avoid this trend continuing in a postrecession world, looking at the reasons for failure may provide valuable information that, if acted on, can go some way to producing a successful outcome.

There are many reasons for failure, not the least of which are target company management attitudes, ineffective communication, inability www.acquisition-intl.com

of the acquiring company effectively to address cultural differences (particularly in cross-border transactions), and a lack of post-acquisition integration planning. In essence, too little attention is paid to the nonfinancial ways in which M&A deals are planned and implemented.

In his paper titled Value Creation Chain in Mergers and Acquisitions, Andrej Bertoncelj discusses a new, integrated approach to M&A whereby focusing on companiesʼ core competences and values can enhance success rates through the balanced management of key success factors (KSF). These KSF include both hard and soft issues (Table 1).

KEY SUCCESS FACTORS HARD KSF M&A Search Due Diligence Financial Resources Integration Plan

SOFT KSF Management Team Intellectual Capital Organisational Culture Communication

Table 1: KSF in M&A (Bertoncelj et al) Other commentators have also claimed that if these key success factors are properly identified and controlled, the chances of success can be greatly increased. It is worth taking a closer look at these KSF because a different weighting is applied to hard and soft issues during the M&A process. More often than not, a greater concentration is placed on the hard KSF because they are deemed to be more important than soft KSF. As Bertoncelj suggests, however, the differences in mean values of compared KSF are not statistically significant, and only a weak correlation between hard and soft KSF can be observed.

Yet although the human dynamic is critical to a successful M&A outcome, it is rarely addressed and this is where things usually go wrong.

Companies undertake collaborative activity for a number of reasons, but in any event, one company acquiring or merging with another is always about “buying” people.

In their paper “Organizational marriage: “hard” versus “soft” issues?”

(Personnel Review, Vol. 24, No. 3), Sue Cartwright and Cary Cooper reported that of 40 UK companies they studied, all conducted a detailed financial and legal audit of the company they intended to acquire, but not one of them carried out an audit of the companyʼs human resources

M&A SUCCESS Maximising M&A Success

and culture to assess the challenges concerning integration of the target organisation.

Likewise, according to a report by global accountancy firm KPMG (Unlocking shareholder value: the keys to success), companies that gave top priority to the selection of the management team at the pre-deal planning stage, thereby reducing the organisational issues created by uncertainty, were 26% more likely than average to have a successful deal.

Successful Dealmaking, a report based on two studies produced by the M&A Research Centre (MARC) at Cass Business School, provides valuable insights on what distinguishes successful deals from failures, covering all stages of the M&A process. The authors concur with others that HR issues are possibly the most important factor in determining the success or otherwise of the deal. Their research found that companies with a greater focus on HR, as measured by the existence and use of a human resources committee at board level, were more successful. In the success group there was twice the number of HRspecific committees than in the failure group.

For all the commercial attractions of any particular deal, boards and advisors would do well to consider whether the bringing together of the people in the two businesses will work. There is clear evidence that close attention to human factors is likely to improve the successful outcome of M&A. However, based on past performances it seems inevitable that, for many, a gap between expectation and reality will continue to exist.

About Robin Murray Brown A board advisor and executive search consultant for nearly 20 years, Robin Murray Brown is a Partner with Tyzack Partners, an internationally focused executive search firm based in London. He specialises in the recruitment of executive and non-executive directors in the commercial and not-for-profit sectors.

Copyright © 2014 ARMADILLO CONSULTING GROUP. Material may not be reproduced in whole or part in any form whatsoever without the written permission of ARMADILLO.

Additionally, the Cass report claims that those companies that quickly align the management teams – particularly at the operational level – and complete the majority of redundancies within the first twelve months postacquisition, are also more successful.

For an M&A deal to have a chance of long-term success, key activities such as evaluating the dealʼs commercial rationale, due diligence and integration project planning in the predeal phase are clearly essential priorities. However, the softer issues that are most often overlooked - the human capital in value creation, cultural aspects and communication – are of at least equal importance.

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www.acquisition-intl.com

M&A SUCCESS Maximising M&A Success

Due Diligence Maximising M&A success in 2014

URS Nicholas Howard is Transactions Practice Leader for URS, one of the world’s leading M&A due diligence providers.

Here, he talks to AI magazine about maximising M&A success in 2014.

Fact File

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“URS has more than 25 years’ experience specialising in environmental, safety and technical due diligence for industrial and commercial assets and businesses.”

Firm: URS Infrastructure & Environment UK Limited Name: Nicholas Howard M&A Practice Leader Industrial Transactions & Compliance National Team Leader Email: nick.howard@urs.com Web: www.ursglobal.com Direct: +44 (0) 161 237 6050 Cell: +44 (0) 7900 933 927

URS has more than 25 years’ experience specialising in environmental, safety and technical due diligence for industrial and commercial assets and businesses.

Our global presence allows us to understand the nuances of undertaking mergers and acquisitions in varied geographies and to factor such regional issues into the due diligence process. Since 2010, URS has provided due diligence support to over £18 billion worth of transactions worldwide. With more than 50,000 employees and locations in more than 50 countries, URS’ global resource base of scientists, engineers and consultants can be brought on board to support the due diligence process. This allows for a thorough assessment and appreciation of the technical issues identified by the due diligence, providing robust and comprehensive findings, recommendations and financial liability predictions for our clients.

URS’ due diligence client base includes financials (private equity, banks and lenders, insurance providers), private sector (global industrials, chemicals, pharmaceuticals, ports, power, downstream oil & gas, food & drink, mining & minerals) and commercial sector (including property portfolio investors, retail, leisure, commercial property and tourism). In URS’ experience due diligence has historically been, and continues to be, dominated

by European and US clients looking to rationalise or strengthen their home market position, as well as outwardly invest in emerging market economies such as India and South East Asia.

Robust due diligence can make a strong contribution to the overall deal, helping to meet targets and objectives.

Allowing sufficient time and funds to conduct thorough due diligence can bring substantial benefits and help to avoid ’down the line’ surprises such as unexpected expenditure, latent liabilities or operational issues postacquisition. URS specialises in looking beyond the current issues that affect a particular asset or business, supporting our clients in future-proofing the transaction.

We work with our clients deal teams to identify their post-acquisition plans for the asset or business, assess the potential for any future third party impacts on the business look at potential business integration and asset

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performance issues and place all of these into context as part of our due diligence provision.

Thorough due diligence allows our clients’ to enter into deal negotiations as an informed purchaser or seller.

URS’ due diligence teams translate detailed technical information into commercially focused deliverables and reports, allowing complex technical issues to be understood, and for appropriate provisions and allowances to be considered. URS also provides robust and on-hand support to our clients’ deal teams during the negotiation phase. With URS supporting the deal team, it allows the two deal parties to enter into comprehensive discussions on the magnitude and extent of identified issues and to reach a mutually acceptable position over how these issues with be dealt with in the sale and purchase agreement, and avoiding potential stalemate positions.

Although due diligence timescales are typically compressed, the level of due diligence support required to provide a comprehensive and robust assessment of identified issues in conjunction with the consideration of future integration and expansion plans, takes time. This drives the need to begin the due diligence process as early as possible.

One of the critical influencing factors on the success of a due diligence project is the quality and presentation of information provided by the vendor. URS has witnessed an increasing move by vendors to present due diligence information in the form of electronic data rooms. Data rooms are only as good as the information placed into them, as well as the layout and functionality of the data room platform. Significant time can be lost by searching unorganised or sparsely populated data rooms that return little value to the due diligence process. However, data rooms can also be extremely comprehensive, and with sufficient time in the due diligence process for a review, a data room documents can provide critical information that may otherwise not be identified and that could have the potential to influence the remainder of the assessment.

URS has recently supported several clients on complex due diligence assessments. We have added value to the

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due diligence process by providing comprehensive and robust financial liability modelling techniques to large portfolio projects. The prediction models were developed closely with our clients and allowed various options and scenarios, all aligned to our clients’ options for the portfolio post-acquisition, to be predicted.

This helped our clients to meet their objectives by factoring liability scenarios into the overall deal model.

URS has also helped clients to realise deal objectives by providing comprehensive technical assessments of the issues that arise from carving out an asset/business from a much larger industrial plant at the same geographic location. Issues requiring close assessment can include waste disposal, wastewater management, feedstock supply, and contaminated land liability.

URS identifies these issues and assesses the associated liabilities and management options in order to avoid further issues at a later stage in the process. Our clients are then able to enter into informed negotiations with the vendor or purchaser to ensure that issues are accounted for in the deal.

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Not allowing enough time to conduct due diligence, or missing out key steps in the process can limit the usefulness of the entire due diligence process. This could lead to both parties not being sufficiently informed and unable to enter into the negotiation stage. Importantly, insufficient due diligence for the purchaser could manifest itself in failure to meet the deal targets in the short to medium term.

Experienced and informed clients are increasingly allowing more time to undertake the due diligence process and are working with consultants such as URS to expand the range of topics that are assessed in the process. These companies are using technical risk management tools to assess the potential impacts of identified issues against a range of future post-acquisition scenarios.

The potential financial liability of identified issues, particularly of large industrial assets/businesses, can also be substantial when compared to the overall deal value or the impact these issues may have on investment returns.

As a result, more and more companies are investing in a thorough due diligence process.

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Due Diligence Maximising M&A success in 2014

Conduit Consulting LLC Jillian Alexander is the founder and Managing Director of Conduit Consulting LLC, a Strategy, Transaction, and General Management consultancy.

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“Focusing on the deal’s strategic intent is imperative to maximising M&A success. When performing due diligence, evaluating the target and the future-state combined company against qualifying criteria is critical.”

Company: Conduit Consulting LLC Name: Jillian Alexander, MBA, CM&AA Email: info@conduitconsulting.com Web: www.conduitconsulting.com Address: 2530 Wilshire Blvd.

Second Floor, Santa Monica, CA 90403, USA Telephone: +1 (310) 260-9765

Deals are done for a variety of reasons – access (to talent, raw materials, markets, etc.), synergistic gains, stopping competitor, or ego. Yet, for more than 20 years, various studies have found that between 70% and 90% of mergers are dilutive or otherwise fail. Additionally, we often hear about Buyers and Sellers being remorseful about their transactions. Considering that 100% of the deals I led or worked on have been accretive, it suggests different approaches are used.

Mergers and acquisitions are complex initiatives.

Regardless of reasons for considering the deal, comprehensive due diligence is necessary and how it is conducted matters. Total cost includes the opportunity cost of disrupting day-to-day operations and reputation management if news of the deal leaks out. If not handled well, star talent and key customers of both the Buyers and Sellers will flee.

Comprehensive Due Diligence Requires Complete Deal Team Most Buyers and Sellers require outside Strategic and Operations advisors to realize a deal’s full potential.

Traditional Deal Advisors are investment banking, legal, tax, accounting, or audit specialists whom typically have little to no operating experience, and seldom has one had the cross-functional management, organization design, merger integration planning, and transition change management experience necessary to quickly identify organization-wide interdependencies or realistically assess degree of effort and duration it will take to combine the entities into the desired “future state”. Most in-house Corporate Development roles are filled by people with similar backgrounds. The traditional approach to due diligence ignores strategic and operational nuances, forgoing adjusting valuation and price negotiation results in the Buyer overpaying.

Sophisticated company leaders and conscientious traditional Deal Advisors recognize that reviewing operations and planning integration concurrently with performing legal and accounting due diligence facilitates structuring the acquisition, including financing, so that both an agreement is reached and after integration and

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implementing post-acquisition strategy the deal will be accretive. In fact, preliminary findings from a soon-to-bepublished Spring 2014 deal satisfaction study conducted

by Conduit Consulting indicate that both Buyers and Sellers were more satisfied with transaction results when the Deal Advisors team included Strategic and Operations Consultants.

Engaging well-qualified Strategic Advisors as team members is key. Since the deal slump, more attorneys and investment bankers are recommending their clients engage Conduit Consulting to lead the deal. Our clients want more than a valuation and price. They want an assessment of the strategy and ability to execute against that strategy, and want to leverage our expertise in creating breakthrough innovations and breakaway strategies as a catapult toward success. Even if the deal’s purpose is to shutdown a competitor, we will identify ways to profitably leverage and liquidate assets.

Focus on Strategic Intent Focusing on the deal’s strategic intent is imperative to maximising M&A success. When performing due diligence, evaluating the target and the future-state combined company against qualifying criteria is critical.

Yet, traditional Deal Advisors focus on completing the transaction, rather than strategic intent. While it seems this would benefit Sellers, it is often value destroying.

Buyers which are not permitted to conduct operational and strategic due diligence either walk away or incorporate unknown risk cost into the deal. The Seller feels coerced to accept unattractive terms now or risk seeking another Buyer, restarting process and incurring more costs further diluting the transaction’s value.

Conversely, by preparing my sell-side clients for comprehensive due diligence, we have consistently demonstrated the companies have scalable, efficient operations and completed transactions at premiums to comparable businesses’ valuations.

Overcoming Hubris Those that rushed to close deal after conducting only

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legal and accounting due diligence or none at all are not doomed to failure. It is possible to turnaround the situation. It takes the talent of those skilled at creating valuable businesses from nothing to reconceive and transform the organization.

Several companies have completed an acquisition then engaged me to draft financial report disclosure statements. These initiatives expanded to strategic planning, including developing the merger integration plan. In other situations, we have been able to convert what was otherwise deemed as failure into a success by advising clients on marketing, procurement, manufacturing, and workforce strategies; redesigning the organization; and improving business processes and management practices.

Effective Communication While mismatch of organizational culture is often reported as the cause of failure, more often the ill-conceived strategy and failure to gain buy-in from employees is it.

Until terms, including transition plan, are agreed, it is best to limit the number of individuals’ knowledge about the deal to as few as possible and not announce it publicly.

Then, crisply conveying the deal’s strategic intent and how the combined entity will operate to key employees, customers, suppliers, and other stakeholders cultivates confidence and gains buy-in to the plan.

Due Diligence in 2014 We anticipate demand for comprehensive due diligence will continue to increase while the desire to complete deals NOW exists. With cheap debt and abundance of cash chasing too few high-quality company deals Private Equity firms are liquidating long-held position and pouring cash into new holdings. As savvy Corporate Buyers and others are wary of overpaying, they will continue to engage firms such as Conduit Consulting and other Strategic Advisors to vetted potential deals.

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Due Diligence Maximising M&A success in 2014

Heymann & Partner Heymann & Partner was founded in April 2005. Today, we are 18 lawyers of which 8 are partners.

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“As our numerous awards show, Heymann & Partner has grown to a leading law firm in Germany in various legal fields since our establishment.”

Company: Heymann & Partner Rechtsawälte mbB Name: Titus Walek Email: T.Walek@heylaw.de Web: http://www.heylaw.de Address: Taunusanlage 1, 60329 Frankfurt am Main, Germany Tel: +49 (69) 768063-60

We are a boutique law firm with a focus on M&A (in particular in the technology sector), private equity/venture capital, restructuring, IT/IP and outsourcing. We regularly represent strategic and financial investors (both domestic and from abroad) on the full range of merger and acquisition transactions, including (leveraged) buy-outs, asset purchases, distressed acquisitions, spin-offs and joint ventures, with a special emphasis on technologydriven transactions.

nature and key features of the business to be acquired.

In the case of a strategic investor, it will be important to ascertain prior to signing if the target’s business fits that of the investor, and if and to what extent the combined business will be able to realise synergy benefits, in particular if such (assumed) synergy effects have been taken into account by the internal or external financial advisors of the bidder in preparing the financial model for the calculation of the purchase price.

In our core areas we offer our clients comprehensive services. However, we are not a ‘full service firm’ and, furthermore, we do not intend to be one. Instead, we work with a network of corresponding lawyers and law firms whom we consult occasionally - as would be the case in any large integrated law firm.

A typical area where the realisation of intended synergy benefits can be impeded, delayed or even completely frustrated for reasons which can be revealed in a proper due diligence, are post-closing workforce restructuring measures. Especially when acting for an investor coming from a jurisdiction which follows (more or less) an employment-at-will doctrine, an important part of legal due diligence can be the identification of the various legal barriers to such restructuring measures, established not only by German legislature but, potentially, by applicable employment or bargaining agreements or similar arrangements, and providing an estimate (to the extent possible) of the amount of money and time needed to overcome such barriers.

Depending on the statistics you read, between 50%-80% of all deals fail to meet their identified targets. How, in your opinion, can due diligence help overcome this issue?

The purchaser’s targets in an M&A transaction as well as the price the purchaser is prepared to offer, are usually based on certain assumptions regarding the nature and condition of the assets and the (actual and contingent) liabilities and future cash flow and other attributes of the target business.

A successful legal due diligence helps verify such assumptions and identify any unknown legal risks associated with the target business. Once discovered in a legal due diligence, any discrepancies between the assumptions underlying the purchaser’s interest in (or bid for) the target business, and any hitherto unknown risks can be taken into account by the purchaser by asking for rectification of the discovered defect as a condition to signing or closing, providing for appropriate contractual protection in the transaction documentation, asking for a reduction of the purchase price or, in the case of materially adverse due diligence findings, which cannot be cured prior to close, aborting the transaction.

Moreover, providing an analysis of the legal affairs of the target will often help the purchaser understand the

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Due Diligence Maximising M&A success in 2014

Merrill DataSite Mike Hinchliffe is Director at Merrill DataSite, a firm which provides secure virtual data room solutions.

He speaks to AI about the business and how it distinguishes itself from the competition.

Fact File “What really sets us apart is our unrivalled customer service and project management expertise,” Company: Merrill DataSite Name: Mike Hinchliffe Email: Michael.Hinchliffe@ merrillcorp.com Web: www.datasite.com Address: 101 Finsbury Pavement, London, EC2A 1ER Telephone: +44 (0)207 422 6256

Merrill DataSite is a smart, simple and secure virtual data room solution that enables dealmakers to execute on all aspects of their due diligence process. The platform turns files into fully searchable, secure online documents, with no additional hardware or software required. Merrill Datasite have successfully worked on thousands of deals, uploading more than 700 million pages of data on over 30,000 projects worldwide.

Director, Mike Hinchcliffe, explains what makes the company stand out from the rest. “What really sets us apart is our unrivalled customer service and project management expertise,” he begins. “A dedicated project management team is assigned to each deal from the start; they are then available 24/7/365 to give clients peace of mind that the right person is able to address any issues.

Our structured approach to setting up every VDR applies tried and tested practices that make it easy to open, manage and maintain, while adding value for all parties involved in the due diligence process”.

According to statistics, between 50%-80% of all deals fail to meet their identified targets, so what makes due diligence such an important factor in the M&A process, and can it help to lower this failure rate?

company that may have conducted due diligence on dozens of acquisitions, this process can be daunting, as no two deals are exactly alike and certainly no two organisations are the same.

“A seller needs to be ready to answer all questions that may arise during the due diligence review and management teams in companies may have little to no experience in preparing for it. It’s important to grasp the breadth and depth of information that must be produced, vetted and ultimately reviewed for a deal to be successful.

“Our own Merrill DataSite reports show that market conditions since the start of the financial crisis in 2008 mean most deals are taking longer to close as people are cautious and are taking time to examine every and all details of a deal, but that’s a good thing as it can only increase the chances of future success for the venture.

If the due diligence process fails, or is not sufficiently robust, then the financial risks for the acquirer can be very significant, and potentially catastrophic in the worst cases.

“Due diligence certainly shouldn’t be underestimated.”

“Only a thorough process of due diligence will identify the risks associated with any acquisition or merger: due diligence is an absolutely essential component of any deal,” says Mike.

“Without this vital process, where everything about the target organisation is scrutinised, from financial data, to contractual information and third party arrangements, a buyer can’t be convinced there will be a fit on any level. Due diligence should include everything from product development to business culture to financial reporting and more.

“Disclosure about every aspect of a business that’s for sale and proof of disclosure are not only important for the practical reasons of gauging whether two businesses are ‘right for each other’, but also for building trust and the foundations of a lasting relationship.

“Buyers should seek to uncover and digest every detail about their potential acquisition. Even for the largest www.acquisition-intl.com

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M&A Making the Deal Work

Conduit Consulting LLC Jillian Alexander is Founder and Managing Director - Corporate Development & Strategy Practice for Conduit Consulting LLC, based in Santa Monica, USA. Here she tells us about her firm, what makes it stand out from the crowd and what the next 12 months holds in store.

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“Demand for our services continues to increase,” she says. “The uptick began in 2009 as some company leaders realized, after a 14-year or longer profit-increasing run, they did not have the Midastouch and shrewd others recognised others’ paralysis due to fear provided an opportunity to get ahead.”

Company: Conduit Consulting LLC Name: Jillian Alexander, MBA, CM&AA Email: info@conduitconsulting.com Web: www.conduitconsulting.com Address: 2530 Wilshire Blvd.

Second Floor, Santa Monica, CA 90403, USA Telephone: +1 (310) 260-9765

Conduit Consulting LLC advises on and supports a wide variety of cross-border and domestic transactions - not only Mergers & Acquisitions, but also Joint Ventures, Licensing, Product Placement, Outsourcing and other strategic alliance deals. Additionally, the firm provides Strategy, General Management, and other Corporate Development advisory and support services.

The firm’s clients are known as innovators, trend setters, market leaders, formidable competitors, and outstanding in their fields. Clients have included single entity, multi-domestic and multinational public corporations, government agencies, private enterprises, and nonprofit organisations in the biopharmaceutical, consumer products, entertainment, financial services, healthcare, high technology, internet, media, paperboard, professional services, retail, telecommunications, travel and other diverse industries.

Frequently, Jillian has been recognised for quickly and effectively getting deals done that others could not close.

Her expertise affords efficient collaboration with clients and their legal counsel, tax advisors, and investment bankers to ensure private placement, public offering, and commercial contract deals are not only technically complete, but also successfully structured to be financially accretive and meet clients’ strategic goals.

Unlike most deal advisers, Conduit Consulting has extensive experience in successfully advising on and managing buy-side and sell-side transactions as well as hands-on operations, divisional and executive management experience. Jillian explains, “Conduit Consulting’s client-specific confidential transaction-related advice and efforts, from acquisition strategy conception through merger integration or operational separation, have resulted in clients realising more than US$3.4 billion in value via completing acquisitions, private placements, IPOs, joint ventures, and divestiture transactions.”

“Each transaction on which we advised has been accretive. This includes instances where we have advised a client to unwind or walk away from a deal, devised the strategy to do so, and fostered agreement amongst

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all parties. We attribute consistent success to our focus being on our clients’ long-term value creation and posttransaction performance, rather than simply closing the current deal.”

Despite the recent challenging economic climate, Conduit Consulting, unlike many other firms, has not been forced to drastically adapt its approach. “As Conduit Consulting was founded in 2002,” says Jillian, “we anticipated a significant change and positioned for it.

“The firm was conceived and designed from the beginning to effectively and efficiently deliver highquality advice as well as provide strategy development, deal sourcing, due diligence, integration planning, organisation design, forecasting, valuation, transformation management, as well as other strategic planning and deal-making services for companies which do not have a fully-staffed Corporate Development team .”

But that’s not to say the firm was completely unaffected by the financial downturn. “While the actual number of transactions closed decreased in 2013, and we observed more deals being shopped, we at Conduit Consulting were productively engaged developing expansion and acquisition strategies, identifying worthy targets and performing internal due dilligence to businesses for success sale,” explains Jillian.

“The US middle market offerings were predominantly due to founder/owner or private equity firm’s desire for a liquidity event, while corporate and small business offerings were attempts to divest of distressed assets.

Much of this increase was due to board and PE firms feeling pressure to put cash assets to work combined with the perception that developed economies are improving.

“We anticipate further consolidation in the retailing and software-as-a-service (SaaS) sectors, as well as in the remote digital data storage sector during 2014.

Considering recent trends, Jillian advises: “Whether you are a buyer or seller, do not use a do-it-yourself approach.

Most recently, there have been several strategic deals

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in the internet/social networking sector at unjustifiable valuations. It demonstrates there is a great deal of money looking for a home and available. Repercussions of this may impact 2014 valuations favorably for certain sellers, but not all. Engage experts who can advise you of the value of completing the deal NOW versus in the FUTURE, and the elements which affect that value.”

So, what, for Jillian, is the key behind reaching the initially stated growth and value generation targets in an M&A deal and what key steps should a company take to ensure a successful international integration, while mitigating associated legal and cultural hurdles?

“Conducting operational due diligence and relatively accurately forecasting demand BEFORE determining valuation,” she says.

“If you want to have reasonably accurate growth and value generation targets, it is imperative to include business function strategists who have considerable operating and business transformation experience on the deal team.

These individuals have the expertise to evaluate the target, determine what is necessary to achieve synergistic gains from deal, and provide timeline as well as cost.

“In terms of successful international integration, clearly understanding the constraints within which the company must operate comes first. Yet, remember, nearly everything is negotiable. And, for the items that are not, there are often alternative options.

“Having said that, it is important to ensure your team avoids actions that violate anti-corrupt practices laws.

“Next, get a sound understanding of assets and liabilities, including the human assets and determine how they can be best organised to maximise profit. Then determine how to transform the company from its current state to the desired future state. Finally, implement the plan.”

Finally, Jillian explains what the next 12 months hold for Conduit: “Demand for our services continues to increase,” she says. “The uptick began in 2009 as some company leaders realized, after a 14-year or longer profitincreasing run, they did not have the Midas-touch and shrewd others recognised others’ paralysis due to fear provided an opportunity to get ahead.”

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M&A Making the Deal Work

AB & David Vera Ayisi and Wilhelmina Quist-Therson work at AB & David as Senior Associate and Associate respectively.

Together, they explain more about the firm, how it stands out from the competition and what the future looks like.

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“Our focus is to ensure businesses and projects succeed in Africa by helping them minimize the risks associated with doing business in Africa,” Company: AB & David Name: Vera Ayisi / Wilhelmina Quist-Therson Email: vera@abdavid.com / mina@abdavid.com Web: www.abdavid.com Address: 8 Dr. Isert Road, North Ridge, Accra - Ghana Telephone: (+233 30) 225 3073; 225 3074; 701 2129

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AB & David is a multi-specialist West African business law firm, committed to the provision of client-focused and innovative solutions in Africa to its worldwide clients.

AB & David is the first African law firm to secure the Lexcel quality Mark, the recognized international practice management accreditation awarded by the law society of England and Wales.

“Our focus is to ensure businesses and projects succeed in Africa by helping them minimize the risks associated with doing business in Africa,” explains Ayisi. “Our extensive experience gained from working with several businesses, public sector agencies, finance houses, multinational lenders, international organisations and individuals is an excellent resource that helps our client do business in the complex Africa environment.

Our ability to minimize project and investment risk is a priceless value we give to our clients.

“We understand that clients are not seeking to do business in individual countries but across the region.

Being a West Africa law firm means that we can provide a regional service.”

Quist-Therson continues to describe what the firm has that gives it the edge over the competition.

“Over the years, we have earned the trust of our clientele, partners and the business community for our commercial perspective and understanding of industry. We take an interest in the business of the client, add value and deliver the service in a way that gives the client the total experience of what client care is about. Additionally being a West African law firm that work with a network of law firms throughout West Africa we provide clients with added value.”

In the last 12 months Ghana has seen an increase in M&A activity especially in the banking, Petroleum, Infrastructure and Agriculture industries and this can be mostly attributed to the stable economy and growth in these industries. Following the increase in the minimum capital requirement for banks, the industry could witness an increase in M&As. The two also have predictions for the future and, in particular, the next 12 months. “We perceive there will be an increase in M&As in the country in the sectors earlier mentioned,” states Ayisi. “As a law firm which is well positioned and trusted by our partners, clients and the business community, we believe there will be opportunities for us to provide services to clients interested in taking advantage of this growth.”