Acquisition International December 2012 by AI Global Media

December 2012 / IN THIS ISSUE/

DOING BUSINESS IN 2012:

MANAGING ENVIRONMENTAL RISKS IN M&A TRANSACTIONS:

A.I. examines company formations around the world

Acquisition International speaks to the experts for a close look at environmental risks.

Q4 REPORT:

Acquisition International’s final quarterly review of 2012.

AFRICAN DEAL OF THE YEAR — PIC, South Africa’s Largest Investment Managers, Invest $250m in Ecobank. / 14

DEALS OF THE YEAR 2012

RUSSIAN PRIVATE EQUITY DEAL OF THE YEAR — EBRD and RDIF buy into Russia’s Moscow Exchange. / 22

HONG KONG/JORDAN CROSS BORDER DEAL OF THE YEAR — HPF acquires Jordan Dubai Capital. / 18

GERMAN PROPERTY DEAL OF THE YEAR — PATRIZIA Immobilien AG led consortium acquires LBBW Immobilien. / 17

SOUTH AFRICAN MINING DEAL OF THE YEAR — Exxaro acquires African Iron. / 24

BRAZILIAN DEAL OF THE YEAR — Diageo acquires Ypióca. / 16 DEAL OF THE YEAR — MedcoEnergi acquires Malik Block 9. / 12

PAKISTANI DEAL OF THE YEAR — UBL-led consortium acquires stake in KBL. / 20 UK ENGINEERING DEAL OF THE YEAR — Baird-Backed Gabbro acquires Midland Precision. / 26

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CONTENTS:

December 2012

Editors Comment

2012 has been an eventful year to say the least. According to The Deloitte Economic Outlook Q4 2012, the world economy is at a crossroads and every major region seems to be at a potential turning point.

CONTENTS

— December 2012

“In Europe, the leaders of the Eurozone are moving slowly toward more integration, while periodically fighting back against new crises. In the United States, slow growth continues, but various forces seem destined to push the economy either toward recession or faster growth. In China, the economy has landed softly, but the next steps depend on the decisions of a new leadership. And in India, the government has attempted to kick-start the reform process just as the economy seems to have stalled. At the very least, the next year will be an interesting one.” The slowdown in global M&A continued through 2012 as the value of deals fell by 47% to a projected US$2.25trillion from the height of the M&A boom in 2007 of US$4.3trillion and are 21% down in volume to 36,865 in 2012 from 46,701 in 2007, according to data analysis by Ernst & Young. Global M&A activity in 2012 is down on last year, with volume falling 12% compared to 2011, while the total value of deals fell by 8% as macro-economic concerns, including the on-going Eurozone crisis and the impending “fiscal cliff” in the US, restricted corporates in the developed markets from committing to acquisitions. M&A activity is predicted to remain low in 2013, with the appetite to acquire among large global corporates falling. Pip McCrostie, Global Vice Chair, Transaction Advisory Services at Ernst & Young, commented: “Acute caution was the prevailing M&A sentiment in 2012. The Eurozone crisis continues to impact nine global companies in every 10 and in 2012 we saw its impact reduce the appetite for M&A – even in many formerly deal-hungry emerging markets. Limited deal activity will likely continue through 2013, especially if we don’t see a clear, long term resolution to the US fiscal cliff in the US.” In Acquisition International’s year end issue we continue our roundup of the deals of the year, highlighting the most significant transactions of 2012. We also review Q4 in detail; examine company formations around the world; and discuss the business environments in a number of jurisdictions. Enjoy the issue, Phil Grainger, Editor phil.grainger@acquisition-intl.com

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

@acquisition-int

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ON THE COVER UK ENGINEERING DEAL OF THE YEAR: /26

Baird-Backed Gabbro acquires Midland Precision. Acquisition International discusses the Midland Precision deal with Dennis Hall at Baird Capital Partners Europe. NEWS: /04

The Latest News Stories From Around The World.

SECTOR TALK: /10 2012 Private EquityDeals ReviewPowered by Prequin.

ON THE COVER: /12 MedcoEnergi Acquires Malik Block 9

DEAL DIARY: /80 The Latest M&A From Around The World.

DEALS OF THE YEAR: /87

The Best Deals of The Last 12 Month’s

6/ Hedge Fund News 8/ Appointments 16/ Brazilian Deal of the Year 17/ German Property Deal of the Year 18/ Hong Kong/Jordan Cross Border Deal of the Year 20/ Pakistani Deal of the Year 22/ Russian Private Equity Deal of the Year 24/ South African mining Deal of the Year 26/ UK Engineering Deal of the Year 28/ Crime and Investment Security in Mexico 29/ Alternative Energy in Ukraine 30/ Double Taxation Agreements 31/ Business Valuation & Transaction Pricing in M&A 32/ The Risks of the Banking Industry 33/ Introducing the Loss Adjustor 34/ The Importance of Protecting Intellectual Property 35/ Structuring a Technology Transfer Transaction 36/ Doing Business 40/ Foreign Direct Investment 42/ Doing Business in 2012 55/ Managing Environmental Risks in M&A Transactions 78/ The Growth of Litigation Funding 59/ Q4 Report

December 2012 /

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NEWS:

from around the world

GUERNSEY’S ZERO-10 REGIME GIVEN EU’S FINAL SEAL OF APPROVAL Guernsey’s zero-10 corporate tax regime has been given the final seal of approval by the EU. Earlier this year, the EU Code of Conduct Group on Business Taxation concluded that the deemed distribution provisions meant Guernsey’s zero10 corporate tax regime was harmful and so at the end of June the Guernsey parliament, the States of Guernsey, agreed to repeal the deemed distribution provisions from 1 January 2013. In September, the EU Code of Conduct Group assessed Guernsey’s repeal of the deemed distribution provisions and agreed that this removed the ‘harmful effects’ of the Island’s corporate tax regime. At a meeting last week, the EU’s Economic and Financial Affairs Council (ECOFIN) formally ratified that Guernsey is now compliant with the principles of the

EU Code of Conduct on Business Taxation. Guernsey’s Chief Minister, Peter Harwood, said that the importance of compliance was emphasised by last week’s European Commission Communication to the European Parliament and European Council on Fighting Tax Fraud and Tax Evasion. This proposed minimum standards of (third country) good governance in tax matters. These are defined as third countries which meet both the following criteria: have effectively implemented and applied the international standard for transparency and exchange of information; and do not operate tax measures which are considered harmful in the areas of business tax (and in this respect, applying the principles and criteria of the Code of Conduct are set as guidance).

The Chief Minister said: “It is a testament to the hard work undertaken by all in recent years and the significant European engagement that we are considered both compliant with the principles of the Code of Conduct and also that under the proposals set out by the European Commission we are not considered to be a tax haven. This is a not inconsiderable achievement given the misinformation and misperceptions that continue to be perpetuated in some quarters about our jurisdiction.” ECOFIN has previously reached similar conclusions, in terms of both offending elements and remedies, in relation to the Jersey and the Isle of Man zero-10 corporate tax regimes.

ISLE OF MAN FURTHER CONSOLIDATES TAX COOPERATION ARRANGEMENTS WITH THE UNITED KINGDOM Isle of Man further consolidates tax cooperation arrangements with the United Kingdom The Isle of Man Government has confirmed that it will be adopting tax information sharing arrangements with the United Kingdom which will follow closely the FATCA intergovernmental agreement currently being negotiated with the United States. Chief Minister Allan Bell MHK said: ‘The nature of tax cooperation is changing and, as I made clear in my Agenda for Change speech to Tynwald in October, automatic exchange is becoming the global standard. The Island already shares tax information automatically under the EU Savings Directive and has recently announced that it will do so on a wider basis with the USA. This decision is a well-

considered next step in the Island’s long-established policy of commitment to being at the forefront of tax transparency and international cooperation. The Isle of Man has achieved global recognition for its proven record of compliance with current international standards of tax co-operation, with the OECD reporting to the G20 last year that the Island was one of only a few jurisdictions with all the elements of effective tax information exchange in place. At the same time the Financial Stability Board placed the Isle of Man in the highest category of co-operative jurisdictions strongly adhering to international standards of co-operation and information exchange. Continuing with this approach, it is logical for the Isle of Man to embrace new forms of tax cooperation with our largest trading partner, the UK.’

This means that the Isle of Man Government will work together with the UK Government on concluding a number of measures which will enhance tax transparency as part of their shared commitment to combat tax evasion and financial crime. The two Governments will adopt new enhanced reciprocal tax information sharing arrangements, under which they will automatically exchange information on tax residents on an annual basis. To minimise the burden on financial institutions, the approach will follow as closely as practicable the Model Intergovernmental Agreement reached between the UK and the United States of America and will be concluded to the same timetable as the agreement between the Isle of Man and the United States.

PWC SAYS FUNDAMENTALS ARE STRONG FOR U.S. MERGERS & ACQUISITIONS ACTIVITY IN 2013 On-going access to capital and financing, strengthened balance sheets and divestiture activity will continue to fuel deal activity in 2013, according to PwC US. An acceleration of deals taking place during the final months of 2012 may result in a lull in activity during the first quarter; however, these sound deal fundamentals are creating optimism that the balance of 2013 will be a stronger year for U.S. mergers and acquisitions (M&A). According to PwC’s U.S. M&A outlook, dealmakers remain hyper vigilant on diligence during the M&A decision making process, analysing each outcome

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and the various impacts on investment and return scenarios to achieve certainty of deal success. With capital ready to be deployed, along with the increasing availability of financing, PwC expects companies and financial sponsors to use M&A to enhance their growth prospects in the new year. Corporate cash levels remain steady at $1.1 trillion for the S&P 500, indicating continued opportunity for companies to put their capital to work through M&A. In the eleven months ending November 2012, there were a total of 7,585 transactions representing $705 billion in disclosed deal value. In October

alone, deal value spiked to a 14 month high, reaching $96 billion and with 754 deals, October was the most active month since August 2011. In terms of deal size -- and with the absence of “transformative” mega deals -- middle market deals have been the “silver lining” for deal activity, accounting for 98% through November in 2012. PwC expects this trend in middle market deals to continue in 2013. In light of available cash and growth strategies, a desire to get deals done has heightened the competition among corporate and private equity buyers. According to PwC, more bidders are taking a longer look at a given target over the past 12 months.

ACQUISITION INTERNATIONAL

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NEWS:

from around the world

SELFTRADE LAUNCHES COMMUNITY PLATFORM FOR INVESTORS Online execution-only stockbroker Selftrade has today re-launched its website, adding an extensive new community forum and an improved news platform to its investor proposition. In a first for a sharedealing platform, Selftrade has created a consumer forum, under its ‘My Selftrade’ area, where users can join the investor community and engage in forums, debating the latest news, trends and investment themes. Each stock and share has its own forum discussion and forum members can create new debates on topics of their choice. Consumers can sign up for free to become a community member in order to participate in forum

discussions and there is no requirement to be a Selftrade customer in order to take part in a forum. Community members can create and share watchlists and model investment portfolios and they can choose to follow updates, articles and posts from other members in the community. Members can also customise dashboard pages so that they show only the information that they are interested in; whether that be the most traded stocks and shares or the results of the most recent poll. A platform for self-directed investors to share views With RDR just around the corner and investors looking increasingly for peer-to-peer recommendations and

views, there is also a dedicated Q&A section, allowing members to ask and answer questions, operating on a credits system. New joiners are allocated 30 points and they can earn further points when they answer other members’ questions, whilst asking questions ‘costs’ two points. Based on the points system, Selftrade has created a ‘top contributor’ members board, highlighting the most active members for other users to follow. Community members can publish their own articles or blogs under the ‘personal journalism’ section of the Selftrade site, giving them a platform to exchange views in more depth and detail, creating a hub of ‘investor knowledge’.

VISIONGAIN REPORT: GLOBAL OIL & GAS INFRASTRUCTURE SECURITY MARKET TO BE WORTH $28.44BN IN 2013 Community members can publish their own articles or blogs under the ‘personal journalism’ section of the Selftrade site, giving them a platform to exchange views in more depth and detail, creating a hub of ‘investor knowledge’. Visiongain Report: Global Oil & Gas Infrastructure Security Market to be Worth $28.44bn in 2013 Visiongain’s analysis indicates that the global oil & gas infrastructure security market will reach a value of $28.44bn in 2013. This includes all of the products and services provided to protect critical assets utilised in the upstream, midstream and downstream sectors of the industry. The lead analyst of the report commented: “The oil & gas infrastructure security market is currently

experiencing a period of substantial growth as escalating global demand for oil & gas is necessitating an expansion of energy infrastructure, while many countries around the world are being forced to confront a range of security challenges stemming from civil unrest, terrorist and criminal activities, and a competitive global market. Together, these factors will create substantial opportunities for companies involved in the oil & gas infrastructure security market as a range of products and services will be needed to protect both existing and future assets.” The report contains 129 tables, charts and graphs that add visual analysis in order to explain developing trends within the oil & gas infrastructure security market. Visiongain provides forecasts for the period 2013-2023 in terms of value (US$) for

the global market, as well as for 16 leading national markets and the market for the rest of the world. In addition, ten year forecasts are provided for four submarkets (security personnel; perimeter security, access control and electronic surveillance; maritime security; and cyber security) within the oil & gas infrastructure security market. The report provides profiles of 25 leading companies operating within the market, and includes two interviews with individuals involved in the industry, who provide expert insight alongside Visiongain’s analysis. The Oil & Gas Infrastructure Security Market 20132023 will be of value to businesses supplying security related products to the oil & gas industry, or to companies wanting to better understand the threats to energy infrastructure throughout the world.

HSBC GLOBAL TRADE FORECAST - INDIA PREDICTED TO BE FASTEST GROWING TRADE MARKET TILL 2020 The HSBC Trade Forecast highlights India’s critical role in world trade growth over the entire period till 2030. As per the Forecast, India represents the fastest growing import or export partner (or both) between 2013-15 or 2016-2020 for 23 markets. India’s trade growth can be linked to its growing consumer wealth and emerging middle class; investment in infrastructure development; the impact of Foreign Direct Investment (FDI); its diverse range of exports and a move to produce goods higher up the value chain, and its developing role as a supply chain hub for Asia.

being re-joined by the developed world in the later part of the decade.

The HSBC Trade Forecast is outlining a dual speed trade rebound as South-South corridors become more established, driving growth to 2015 before

By 2020, HSBC expects that forward-thinking companies worldwide will have exploited multiple trade corridors and partnerships, created effective

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According to the HSBC Trade Forecast, powerhouses India and China will be joined by emerging trading nations including Vietnam, Indonesia, Egypt, Turkey, Mexico and Poland to record significant trade growth in the next three years. As these economies industrialise, trade in higher value goods will increase, reflecting the greater maturity of these faster-growing economies with large populations and rapidly expanding middle-class consumer markets.

networked supply chains, and tightened efficiency in their operations as a result. This trend continues through 2021-30, contributing to a stabilising of trade growth which also reflects the growing maturity of emerging markets. Sandeep Uppal, Managing Director and Head, Commercial Banking, HSBC India said: “Given an expected pick-up in growth in India and a relatively stable global economy in the coming years, exports to all regions are expected to grow fairly robustly, helped by India’s wide range of export products. These increasingly will move away from traditional goods to higher value goods and hi-tech products as India steadily develops its technology as well as manufacturing base.”

December 2012 /

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FUND NEWS:

from around the world

HEDGE FUND MANAGER BULLS OUTWEIGH BEARS BY RATIO OF 3 TO 1 In its Annual Global Hedge Fund Manager Survey, leading independent research and portfolio advisory firm, Aksia, has observed a dramatic turnaround in sentiment among global hedge fund managers over the last 12 months. Aksia polled the opinion of 168 institutional caliber managers across the major hedge fund strategies, which collectively account for approximately $900 billion in AUM and 41% of total hedge fund industry assets. The survey results show that managers are bullish on financial assets, comfortable with the stability of financial markets, and though clearly uncertain on outcomes, less sensitive to the impact of macro/political risks. Other key findings of Aksia’s 2013 Hedge Fund Manager Survey include:

• 88% of managers say the US housing market has bottomed; • Fewer managers envisage a large-scale sell-off of assets by the European banks as likely, with this number falling to 52% from last year’s 83%. The percentage of those seeing it as “definite” dropped to just 7% from 29%; • Concerns over counterparty risk abating: CDS spread triggers are decreasing in importance for hedge fund managers with only 36% of managers reporting their use (versus 50% last year) and existing trigger levels are higher; • Emerging Markets and gold are the asset classes expected to deliver the strongest performance in 2013, with more than a third of managers predicting double digit returns;

• Managers are reasonably optimistic on European equities with 63% predicting positive performance in the EuroStoxx 600 in 2013 and 25% expecting returns in excess of 10%; and • Pension funds are growing in influence as fund of funds contract, with 68% of managers reporting direct investments by pension funds as being the fastest growing part of their AUM whilst 63% report a decline in fund of funds’ allocations. Jim Vos, CEO at Aksia, said: “This survey appears to show that managers are looking through much of the “noise” and headlines that bombard us daily. At a minimum, it illustrates a belief in near term stability in the markets and less concern about left-tail risks.”

LPS WITH PERFORMANCE-RELATED PAY HAVE OUTPERFORMED OTHER LPS SINCE THE CRASH Private equity investors (LPs) whose remuneration is tied to the performance of their portfolios have achieved significantly higher returns than their peers over the last five years, according to Coller Capital’s latest Global Private Equity Barometer. Over half (55%) of LPs with performance-related pay have achieved net annual returns greater than 11% over the last five years, compared with less than a fifth (19%) of other LPs. Limited Partners’ plans and expectations for private equity are positive overall, but LPs identify discrete challenges in each of the three key regions of the private equity world – some of which will change how they commit to the asset class.

Four out of five LPs are forecasting net annual returns of more than 11% from private equity over the next 3-5 years, and 28% of investors expect returns of more than 16% in the same period. As a result, investors plan to increase their target allocations, and accelerate their commitments, to the asset class. Over the next 12 months almost one third (30%) of LPs will raise their target allocation to private equity and a third plan to accelerate their private equity commitments. Buyouts in the developed markets of North America and Europe are regarded as the most attractive area of private equity. Asia-Pacific buyouts, which topped the chart three or four years ago, are somewhat less popular today.

Commenting on the Barometer’s findings, Jeremy Coller, CIO of Coller Capital, said: “Private equity is all about alignment. The Barometer’s findings on performance-related pay show this is just as important for Limited Partners as it is for General Partners. Take a pension plan: it can only achieve strong returns from private equity by consistently selecting the right managers – and to do that you need talented, experienced and motivated people doing the selecting. To underpay the people investing their pensions simply isn’t in the interests of pensioners!”

BEST PRACTICES FOR SETTING-UP AND SERVICING ISLAMIC FUNDS IN LUXEMBOURG The Association of the Luxembourg Fund Industry (ALFI) has published its collection of best practices for settingup and servicing Islamic funds to provide a greater level of understanding and consistency of the requirements and expectations to this growing market sector. “2012 has been a very active year for the Luxembourg Islamic finance community with several new Shariahcompliant funds launched. Luxembourg currently ranks No. 5 worldwide and first in Europe in the number of Shariah-compliant domiciled funds, at 41 funds with €4 billion in assets under management,” explained Marc Saluzzi, Chairman of ALFI.

a strict set of prohibitions, including the charging and receiving of interest, speculation or investment in certain commodities such as pork related products or activities such as gambling. ALFI’s collection of best practices provides indepth information and guidance on the legal framework, the fund set-up process, administration, custody and depository bank services for Islamic funds in Luxembourg. It also gives a high level indication of whether Islamic finance instruments are compatible with Luxembourg UCITS laws and should enable service providers who are already active in this field to align themselves with greater consistency and provide guidance to new entrants as to all the areas that need to be considered.

Islamic funds are investment vehicles that follow the religious laws, known as Shariah. They operate under

Mr Saluzzi continued: “Most service providers in Luxembourg already have dedicated teams looking

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at Shariah funds. This collection of best practices will further contribute to establish Luxembourg as the centre of reference for servicing Shariah compliant funds, whether they are domiciled here or elsewhere.” Shariah-compliant investment funds are a natural development, given Luxembourg’s strengths in conventional investment funds and its international outlook. A number of Shariah-compliant funds have adopted the UCITS structure, given the focus on investor protection of UCITS funds and the fact that UCITS funds have rigorous investment policies that accommodate the principles underlying Islamic Finance well. UCITS funds benefit from a European distribution passport and can therefore be sold to retail investors across Europe. They are widely recognised in Asia, Latin America and the Middle East.

ACQUISITION INTERNATIONAL

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FUND NEWS:

from around the world

HEDGE FUNDS POST NOVEMBER GAINS AS FISCAL CLIFF LOOMS Hedge funds posted gains in November as equities traded in a wide intra-month range following the U.S. Presidential election and as global financial markets focused on the U.S. fiscal cliff. The HFRI Fund Weighted Composite Index gained +0.35% for the month, posting its fifth gain in the last six months, according to data released today by HFR, the leading global provider of indexation, research and analysis of the global hedge fund industry.

from strategies specializing in Volatility Arbitrage and Asset Backed exposures, with these gaining +1.2 and +1.1%, respectively. The HFRI RV: Asset Backed Index is the top area of sub-strategy performance YTD, with a gain of nearly +16.0% through November. Relative Value Arbitrage strategies have continued to attract investor capital for steady performance, having posted gains in 41 of 47 months since December 2008.

Relative Value Arbitrage (RVA) and Event Driven (ED) strategies were top contributors in November, with both the HFRI Relative Value Arbitrage Index and HFRI Event Driven Index gaining +0.7%. RVA strategies remain the top area of hedge fund strategy performance YTD, with the HFRI RVA Index up +9.5% through November. All RV sub-strategies posted gains for the month, with top contributions

Event Driven strategies, which invest broadly across Merger Arbitrage, Distressed and Activist situations, posted the sixth consecutive monthly gain, benefitting from a strong M&A environment, as well as increased and special dividends announced ahead of possible tax increases. The HFRI Merger Arbitrage and Distressed Indices gained +0.8 and +0.6, respectively, in November, while Activist managers posted gains of +2.8%.

Equity Hedge funds advanced +0.4% in November, with top contributions from Quantitative Directional and Fundamental Growth, which gained +1.4 and +0.8%, respectively. The HFRI Macro Index was essentially flat for the month, as gains in Currency, Discretionary and Active Trading funds offset declines in Commodity and Systematic Diversified CTA strategies. Emerging Markets hedge funds also posted their sixth consecutive gain as total hedge fund capital invested in Emerging Markets reached a record level, with the HFRI Emerging Markets Index gaining +0.9%. The HFRI Fund of Hedge Funds Composite Index also posted a gain of +0.4%, in line with the single-manager HFRI Fund Weighted Composite.

NORTHERN TRUST LAUNCHES NEW CUSTOM ESG INDEX FUND The asset management arm of Northern Trust (Nasdaq: NTRS) has launched the Northern Trust World Custom ESG Equity Index Fund. The Fund which has been customised according to six common value based exclusions enables institutional investors across the globe to meet commonly held environmental, social, and governance (ESG) criteria and support their investment objectives. “Throughout Europe, we see an increasing trend among institutional investors looking to include ESG criteria in their investment portfolios,” said John Krieg, managing director of Northern Trust asset management in Europe, Middle East and Africa. “Through the launch of this fund, we are

able to respond to the most important ESG themes identified by our clients, and include the benefits associated with a pooled fund structure.” Northern Trust’s customised index fund has been created based on six key common areas:

• derive more than five per cent of revenues from the tobacco industry • have any involvement in the production of cluster bombs, landmines, nuclear weapons, deplete uranium weapons, biological/chemical weapons, or their related components

• environment, human rights, anti-corruption, labour and supply chain, tobacco suppliers/ producers, and controversial/indiscriminate weapons. Northern Trust’s ESG screening methodology then excludes companies in these areas which: • do not comply with United Nations (UN) Global Compact Principles

The Fund is structured as a Common Contractual Fund which offers tax-transparency through exercising withholding tax treaties that exist between countries in which investors are based, and those in which they invest. Over the long-term, investors using tax-transparent structures may benefit from enhanced investment returns owing to reduced tax drag.

EU AND SWISS REGULATORS TO CO-OPERATE ON CROSSBORDER SUPERVISION OF ALTERNATIVE INVESTMENT FUNDS The European Securities and Markets Authority (ESMA) has approved the co-operation arrangements between the Swiss Financial Market Supervisory Authority FINMA and the EU securities regulators for the supervision of alternative investment funds, including hedge funds, private equity and real estate funds. ESMA has negotiated the agreement with FINMA on behalf of all 27 EU national competent authorities for securities markets regulation. The co-operation arrangements include the exchange of information, cross-border on-site visits and mutual assistance in the enforcement of the respective supervisory laws. This co-operation will apply to Swiss alternative investment fund managers (AIFMs) that manage or market alternative

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investment funds (AIFs) in the EU and to EU AIFMs that manage or market AIFs in Switzerland. The agreement also covers co-operation in the crossborder supervision of depositaries and AIFMs’ delegates. The agreement will take the form of a Memorandum of Understanding (MoU) between the EU securities supervisors and FINMA. Steven Maijoor, ESMA Chair, said: “The agreement by EU and Swiss supervisors to facilitate co-operation on the supervision of cross-border alternative funds is an important step in increasing investor protection and the global consistency of supervision. “ESMA sees this agreement as a signal of third countries’ willingness to cooperate to meet AIFMD’s

requirements, however further work needs to be done with non-EU authorities to achieve our goal of completing all MoUs by the July 2013 deadline.” Professor Anne Héritier Lachat, FINMA Chair, commented: “The agreement between FINMA and EU supervisors will further improve cross-border supervision of the funds business and ultimately reinforce investor protection in cross border operations of alternative funds. Moreover, the agreement is timely with respect to the transposition of the AIFMD in EU Member States in July 2013. It will establish a framework for cooperation between supervisory authorities required under the AIFMD to manage, market and delegate the management of EU alternative funds.”

December 2012 /

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APPOINTMENTS:

from around the world

MCGUIREWOODS ADDS FREDRIK ENRIKSSON AS A PARTNER McGuireWoods LLP has announced the addition of Fredrik Henriksson, who has joined the firm’s Mergers and Acquisitions and Cross-Border Transactions Department in London as a partner. Henriksson, who is admitted in both Sweden and the UK, focuses his practice on corporate finance and general corporate work, including domestic and cross-border mergers and acquisitions, buyouts and other private equity transactions, controlled auctions, joint ventures, and restructurings and reorganisations across a broad range of industries. He also has experience in areas such as company, securities, finance and contract law, including the drafting and negotiation of commercial agreements.

and Acquisitions and Cross-Border Transactions Department. “His addition underscores our commitment to providing top-notch counsel to our clients operating both in and outside the United Kingdom.” Anders Grundberg, a partner in McGuireWoods’ London office who focuses on the Nordic and Baltic regions, added, “Fredrik has acquired extensive international experience over the past 13 years, having lived and practised in several countries. His experience with handling cross-border transactions and other corporate matters worldwide will greatly serve our clients’ international interests. Fredrik will be a very valuable addition to our established Nordic/Baltic practice.”

Prior to joining McGuireWoods, Henriksson served as chief general counsel for the EF Education First Group, the world’s largest private education and travel organisation. He has also served as an associate at Slaughter and May in London and at Linklaters in Stockholm. He began his career in the legal profession as a junior judge at Malmö District Court, Sweden, after earning his Master of Laws (LL.M) degree at Lund University, first class, in 1999. McGuireWoods LLP is a full-service law firm with more than 900 lawyers in 19 offices worldwide. The firm’s London office is located at 11 Pilgrim Street, EC4V 6RN. For more information, visit www. mcguirewoods.com.

“We are excited about Fredrik joining the firm,” said Patrick De Ridder, chairman of the firm’s Mergers

MICHAEL SINGER JOINS RAMIUS Michael Singer has joined Ramius LLC, the investment management subsidiary of Cowen Group, Inc. (“Cowen”), as Chief Executive Officer reporting to Peter Cohen. In his role, Mr. Singer will be responsible for overseeing and managing the dayto-day operations of Ramius. Thomas Strauss will become Chairman of Ramius and Vice-Chairman of Cowen Group, Inc., with a focus on expanding global relationships and partnerships in the asset management business.

have Michael join us as we accelerate the build out of the Ramius platform. Michael has an exceptionally strong and diverse background in alternative asset management, and he will focus on expanding our current suite of products and broadening our platform with new strategies and teams. Tom will dedicate his time on further developing the Firm’s strategic relationships, distribution channels and client management and work with me in advancing the development of our quantitative trading group.”

Peter Cohen, Chairman and Chief Executive Officer of Cowen Group, Inc. said, “We are very pleased to

Tom Strauss added, “The Ramius platform has evolved tremendously over the last few years, from its historic

multi-strategy approach to investing in a series of discrete strategies requiring very specific expertise which are relevant to the investment environment as we see it today. As the industry has changed, Ramius responded to client demands for customized investment solutions and portfolio construction. We also continue to be a leader within the industry in creating products and solutions that deliver increased liquidity and transparency. Our goal is to continue to respond and adapt to the needs of our clients and to develop alternative investing solutions that create truly diversified and risk-adjusted portfolios.”

TEN GROUP COO RELOCATING TO SINGAPORE Andrew Long, co-founder of Ten Group, and the global lifestyle concierge company’s COO, will move from London to Singapore in early December to take up a new role as the CEO for Ten Asia Pacific. Andrew will focus on leading and managing the service delivery in the APAC region and all existing country Managers for Singapore, Hong Kong, Shanghai and Tokyo will report to him. He will also continue to support existing and new client relationships, working closely with Ten’s Global Business Development team. Ten recently opened a new office in the city-state to service members from the increasing number of private banks, wealth management firms and premium credit card businesses that operate in the region.

/ December 2012

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Ten has seen sustained growth in Asia over the past two years culminating in seven new contract wins. This has led to offices opening in Tokyo, Shanghai and Singapore in 2012 and an increased headcount in the region of more than 50 lifestyle experts. To support the forecast growth for 2013, there are further plans to expand into Korea and Australia. Andrew commented “We have seen a clear shift in the market from the call centre concierge provided by other firms in the market to Ten’s personalised, expertled model. We are also seeing an increased investment in premium products and services from the region’s leading banking groups. Ten has been servicing HNW individuals, on a global basis, for 15 years and I am excited to be moving to SE Asia to lead and develop our award winning service across the region.

Ten is the only global concierge company to wholly own and run all of its offices worldwide, ensuring the member’s experience of the service is the same wherever they might be. Its lifestyle platform also delivers unique offers, benefits and experiences, fulfilled via the concierge teams across all regions. With more than 10 languages delivered 24/7, Ten’s unique lifestyle and content proposition is helping to redefine personalised customer service for affluent global travellers.

ACQUISITION INTERNATIONAL

13/12/2012 17:55:51

APPOINTMENTS:

from around the world

LEE KRANEFUSS JOINS WARBURG PINCUS AS EXECUTIVE-IN-RESIDENCE Warburg Pincus, a leading global private equity firm focused on growth investing, has announced the appointment of Lee Kranefuss as an Executive-inResidence (EIR). Mr. Kranefuss will work to help Warburg Pincus identify and evaluate investment opportunities in the areas of exchange-traded funds (ETFs), index investing and asset management, particularly in Europe, Asia and Latin America. Mr. Kranefuss was the architect and Global Chief Executive Officer (CEO) of iShares, part of Barclays Global Investors (BGI), where he built the largest global ETF platform. Mr. Kranefuss oversaw the global expansion of iShares from launch in 2000

to over $600B in assets in 2010. While at BGI, Mr. Kranefuss was a member of the Executive Committee, and – in addition to running iShares - managed all of BGI’s institutional indexing, money market, asset allocation, portfolio restructuring, securities lending and private equity businesses, which comprised total assets of more than $1.5 trillion. Subsequent to the acquisition of BGI by BlackRock, Mr. Kranefuss worked on post-merger integration and transition management before departing BlackRock in 2010. Mr. Kranefuss commented: “I am pleased to join Warburg Pincus, a firm with a global track record and experience backing world-class management teams

in the financial services sector. ETFs and passive investing are powerful investment tools globally, and continue to see long-term inflows. However this is a time of flux and opportunity in the ETF industry. The time is ripe to create a large-scale, global, and independent ETF provider that will provide the truly attractive and innovative product – and the support behind it – that ETF investors demand.” Cary J. Davis, Managing Director, Warburg Pincus added: “As one of the true leaders of the global ETF industry, Lee brings years of invaluable knowledge and experience and we are pleased to welcome him to Warburg Pincus as an EIR.”

GENERAL ATLANTIC APPOINTS SANDEEP NAIK General Atlantic LLC (“GA”), a leading global growth equity firm, today announced that Sandeep Naik has joined the firm as a managing director and head of the firm’s Mumbai, India office. Mr. Naik will lead GA’s investment advisory activity in India as part of the firm’s continued strategy to invest in growth companies in this important high growth economy. “We are pleased to welcome Sandeep to our global team and to lead our India office,” said William Ford, CEO of General Atlantic. Sandeep’s background, expertise and leadership will be a significant addition to our team and underscores our commitment to this very important geography.” Mr. Naik commented, “I have long admired General Atlantic and its unique approach to building regional

expertise and helping companies grow globally. I look forward to continuing to expand GA’s activity across India andlook forward to being an active partner in GA’s global team.”

McKinsey and Company. He is the co-founder of a medical device start-up firm, InfraScan Inc. which is focused on detecting bleeding inside the brain using a handheld device.

Mr. Naik was previously a partner and co-head of the India office for Apax leading investments in the healthcare, financial & business services and retail & consumer sectors. Sandeep has both led and participated in a number of investments including Apollo Hospitals, Spectrum Labs, Esprit Pharma and Xanodyne. He served as a director of publicly listed Apollo Hospitals.

Sandeep has a BTech in Instrumentation Engineering from the University of Mumbai, an MS in Biomedical Engineering from Medical College of Virginia and an MBA in Finance from The Wharton School of Business, University of Pennsylvania. Sandeep was also recently selected as a Young Global Leader by the World Economic Forum.

Prior to joining Apax, Sandeep was a global marketing manager at Medtronic (a leader in medical devices), a scientist at the Mayo Clinic and a consultant with

EVERSHEDS PARTNER APPOINTED PRESIDENT OF THE ASSOCIATION OF CORPORATE TRUSTEES Giles Orton, Chairman of Bridge Trustees Limited, the specialist pensions trustee company owned by Global law firm Eversheds, has been appointed President of The Association of Corporate Trustees (TACT). The Association was founded in 1974 to foster a high standard of corporate trustee service. TACT’s membership comprises the leading UK corporate trustees operating in the fields of private and will trusts, loan capital and pensions. Collectively TACT members are responsible for assets worth over £1 trillion.

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Giles previously held the position of Vice-President and takes over the role of President from Wilson Cotton of Smith & Williamson. Giles Orton commented: “TACT plays an important role in maintaining high standards in corporate trustee services. We have just introduced a Code of Conduct so that those who are looking to appoint trustees know what to expect from TACT members. I am very much looking forward to taking up my term as President and tackling the challenges ahead. A key challenge will be adapting the Code of Practice to

the differing areas in which TACT members operate. Pension trustees are already very heavily regulated, perhaps to the detriment of pension scheme members or potential members, as the cost and complexity has deterred some employers from making fuller provision for their employees. On the other hand private trusts are under-regulated. TACT members are keen to see proper controls in particular over will writing and executorship services.”

December 2012 /

13/12/2012 17:55:52

SECTOR TALK:

2012 Private Equity Deals Review

2012 PRIVATE EQUITY DEALS REVIEW â&#x20AC;&#x201D; Powered by

l Despite the difficult opening to the year due to turbulent market conditions, private equity deal activity looks set to near the number and aggregate value of deals witnessed in 2011, with 2,599 private equity deals in 2012 so far representing a value of $227bn (as at 5 December 2012).

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 ytd

No. of Deals 1383 1335 1662 1524 1386 1103 809 968 1138 1379 1471 1429 1438 1161

Aggregate Value of Deals ($bn)

500.0

1800 1600 1400 1200 1000 800 600 400 200 0

400.0 300.0 200.0 100.0 0.0

Aggregate Deal Value $bn

Period

Number and Aggregate Value ($bn) of Private Equity-Backed Buyout Deals Globally: 2006 - 2012 YTD (as at 05.12.2012) Number of Deals

NUMBER AND AGGREGATE VALUE ($BN) OF PRIVATE EQUITY-BACKED BUYOUT DEALS GLOBALLY: 2006 - 2012 YTD (as at 05 December 2012)

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 YTD

221.4 447.6 449.4 197.7 130.3 56.8 27.9 67.7 84.9 136.0 141.2 123.0 106.0 121.0

No. of Deals

Aggregate Deal Value ($bn)

Deal activity at the beginning of 2012 started slowly as the sovereign debt crisis in Europe, which re-emerged in August 2011 and created difficult market conditions globally towards the end of 2011, carried over into 2012. Large-cap buyouts were particularly affected; Preqin data shows that, despite deal volume increasing slightly, the aggregate value of deals in H1 2012 decreased 13.8% compared to H2 2011 figures. Compared to H1 2012, the second half of 2012 so far has witnessed an increase of 30% in the number of large-cap buyouts valued at over $1bn, leading to an increase of 14% in the aggregate value of deals globally in comparison to H1 2012, despite a lower number of deals announced. As more deals filter through in December 2012, it is likely that the aggregate value of deals announced in 2012 will approach the levels witnessed during 2011, when $265bn in buyout deals were announced. While this level of activity does not approach the highs witnessed during the boom era of 2005-2007, it does represent a strong rebound from the lows witnessed immediately following the onset of the global financial crisis in 2008. North America has accounted for the majority of private equity deal activity during 2012, with over 50% of the number and 60% of the aggregate value of buyout deals announced in 2012 so far attributed to the region. The aggregate value of deals announced in Europe has decreased by 37% this year as compared to 2011 figures, with the sovereign debt crisis in the region continuing to lead to weakened market conditions in the region. On a proportional basis, the number of deals increased marginally across North America, Asia, and Rest of World (including Africa, Latin America, Australia, Israel and Middle East) throughout the year, filling the gap left by the decrease in European activity. Interestingly, Asian deals have accounted for 11% of the number of buyout deals in 2012, with 276 deals valued at an aggregate $20bn as of 5 December 2012. Deal activity in the region may surpass the post-Lehman high of 2011, when 259 deals valued at a larger total of $24bn were announced.

NUMBER OF PRIVATE EQUITY-BACKED BUYOUT DEALS BY REGION: 2006 - 2012 YTD (as at 05 December 2012)

BREAKDOWN OF PRIVATE EQUITY-BACKED BUYOUT DEALS BY REGION: 2006 - 2012 YTD (as at 05 December 2012)

Region

2006 2007 2008 2009 2010 2011 2012 YTD

Region

2006 2007 2008 2009 2010 2011 2012 YTD

North America Europe Asia ROW

1457 972 157 132

North America Europe Asia ROW

54% 36% 6% 5%

1698 1093 238 157

1220 924 188 157

1000 522 151 104

1300 867 226 124

1548 950 259 143

1409 758 276 156

AGGREGATE VALUE ($BN) OF PRIVATE EQUITYBACKED BUYOUT DEALS BY REGION: 2006 - 2012 YTD (as at 05 December 2012) Region

2006 2007 2008 2009 2010 2011 2012 YTD

North America Europe Asia ROW

453.4 176.0 17.0 22.6

53% 34% 7% 5%

49% 37% 8% 6%

56% 29% 8% 6%

52% 34% 9% 5%

53% 33% 9% 5%

54% 29% 11% 6%

Breakdown of Private Equity-Backed Buyout Deals by Region: 2006 - 2012 YTD (as at 05 December 2012) 100% 90%

5% 6%

5% 7%

36%

34%

54%

53%

49%

2006

2007

2008

6% 8%

5% 9%

11%

29%

34%

33%

29%

56%

52%

53%

54%

2010

2011

2012 YTD

80% 70%

37%

60% 50%

419.1 182.9 25.9 19.2

84.8 76.7 18.7 6.8

49.4 28.4 14.3 3.5

117.9 72.4 18.3 12.3

128.7 95.4 24.9 15.2

136.7 59.7 19.8 10.8

40% 30% 20% 10% 0% North America

10 / December 2012 AI Magazine 1212.indd 10

2009 Europe

Asia

Rest of World

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13/12/2012 17:56:14

SECTOR TALK:

2012 Private Equity Deals Review NUMBER AND AGGREGATE VALUE ($BN) OF PRIVATE EQUITY-BACKED BUYOUT DEALS GLOBALLY BY TYPE: 2012 YTD (as at 05 December 2012) Type

No. of Deals

Aggregate Deal Value ($bn)

Leveraged Buyout (LBO) Add-on Growth Capital Public to Private

1192

152.31

854 383 170

25.60 16.82 32.37

Leveraged buyouts (LBOs) continue to remain the predominant type of private equity deal, making up 46% of the total number of deals globally and 67% of aggregate deal value in 2012. In addition, buy-and-build continues to represent an attractive strategy for private equity firms, with add-on transactions accounting for 33% of total deal volume, a significant increase from levels of add-on activity pre-crisis, when these deals accounted for 18% of the number of deals in 2006 and 2007. This increased interest in add-on opportunities post-financial crisis is likely due to the fact that private equity firms can consolidate and strengthen the position of a portfolio company by the strategic acquisition of small competitors, potentially increasing a portfolio companyâ&#x20AC;&#x2122;s value significantly via a relatively small investment. Public-to-private deals account for 14% of total deal value in 2012, a decrease from the 19% of aggregate deal value they represented in 2011. This is also a significant decrease compared to the period before the 2008 financial crisis, when public-to-private deals made up 40% of global aggregate deal value.

BREAKDOWN OF NUMBER AND AGGREGATE VALUE OF PRIVATE EQUITY-BACKED BUYOUT DEALS GLOBALLY BY TYPE: 2012 YTD (as at 05 December 2012) Type

No. of Deals

Aggregate Deal Value

Leveraged Buyout (LBO) Add-on Growth Capital Public to Private

46%

67%

33% 15% 7%

11% 7% 14%

In 2012 to date, industrials are once again the most prominent sector, making up 23% of all deals made this year. Four of the 10 largest buyout deals announced in 2012 were in the industrials sector, including the $4.9bn DuPont Performance Coatings buyout by Carlyle Group. The largest deal this year was in the energy industry, when Apollo Global Management teamed up with Access Industries, Korea National Oil Corporation and Riverstone Holdings to acquire full ownership of El Paso Corporationâ&#x20AC;&#x2122;s oil and natural gas exploration and production assets for $7.15bn. Other prominent industry sectors for deal activity were business services (representing 16% of volume and aggregate value of deals in 2012 to date) and the consumer sector (representing 15% of volume and 14% aggregate value of deals in 2012 to date). Although fundraising conditions have remained difficult in recent years, buyout firms have an estimated $362bn in available dry powder as of December 2012. With buyout activity increasing marginally in the second half of 2012, and private equity firms continuing to have access to large amounts of capital, it is likely that deal activity in 2013 will continue at the same levels witnessed in the second half of 2012.

NUMBER AND AGGREGATE VALUE ($BN) OF PRIVATE EQUITY-BACKED BUYOUT DEALS BY INDUSTRY: 2012 YTD (as at 05 December 2012)

Breakdown of Number and Aggregate Value of Private Equity-Backed Buyout Deals Globally by Type: 2012 YTD (as at 05 December 2012) 100% 90% 80%

7% 15%

60%

33%

Public to Private Growth Capital

50%

Add-on

40%

67%

30% 20%

Leveraged Buyout (LBO)

46%

10% 0% No. of Deals

No. of Deals

Aggregate Deal Value

Industrials Business Services Consumer IT Healthcare Telecoms & Media Energy Food & Agriculture Clean Technology Materials Other

587 422 381 310 305 222 132 129 44 38 29

52.3 36.3 32.9 22.8 21.9 21.2 23.0 4.5 0.7 3.5 7.8

No. of Deals

Aggregate Deal Value

23% 16% 15% 12% 12% 9% 5% 5% 4% 38 29

23% 16% 14% 10% 10% 9% 10% 2% 5% 3.5 7.8

7% 11%

70%

Industry

14%

BREAKDOWN OF NUMBER AND AGGREGATE VALUE OF PRIVATE EQUITY-BACKED BUYOUT DEALS GLOBALLY BY INDUSTRY: 2012 YTD (as at 05 December 2012)

Aggregate Deal Value

Industrials Business Services Consumer IT Healthcare Telecoms & Media Energy Food & Agriculture Other Materials Other

Breakdown of Number and Aggregate Value of Private EquityBacked Buyout Deals Globally by Industry: 2012 YTD (as at 05 December 2012) 25%

23% 23%

20%

16% 16%

15% 14%

15%

12%

10%

12%

10%

9% 9% 5%

5% 2%

0% Industrials

Business Services

Consumer

Healthcare

No. of Deals

Telecoms & Media

Energy

Food & Agriculture

Other

Aggregate Deal Value

10 LARGEST ENERGY & UTILITIES BUYOUTS GLOBALLY: 2012 YTD (As of 8 November 2012) Firm

Investment Type

Deal Date

Deal Size (mn)

Investors

Bought From/ Exiting Company

Primary Industry

Location

El Paso Corporation's oil and natural gas exploration and production assets Cequel Communications

Buyout

Feb-12

7,150 USD

El Paso Corporation

Energy

Buyout

Jul-12

6,600 USD

Access Industries, Apollo Global Management, Korea National Oil Corporation, Riverstone Holdings BC Partners, CPP Investment Board

Annington Homes DuPont Performance Coatings Hamilton Sundstrand Industrial Getty Images

Buyout Buyout

Nov-12 Aug-12

3,200 GBP 4,900 USD

Terra Firma Capital Partners Carlyle Group

Charterhouse Group, Goldman Sachs Merchant Banking Division, Jordan Company, Oaktree Capital Management, Quadrangle Group Nomura Securities DuPont

Other Industrials

UK US

Buyout

May-12

3,460 USD

BC Partners, Carlyle Group

Industrials

Buyout

Aug-12

3,300 USD

Carlyle Group

Buyout

Aug-12

3,000 USD

Advent International

Telecoms & Media Industrials

AOT Bedding Super Holdings TransUnion

Hamilton Sundstrand, United Technologies Corporation Farallon Capital Management, Hellman & Friedman Ares Management, Teachers' Private Capital

Buyout

Feb-12

3,000 USD

Recapitalisation

Jun-12

2,690 USD

Business Services Consumer

Add-on

Aug-12

2,560 USD

Madison Dearborn Partners, The Pritzker Group Advent International, Berkshire Partners, Weston Presidio Capital -

Party City Corporation Dollar Thrifty Automotive Group

Advent International, Goldman Sachs Merchant Banking Division Thomas H Lee Partners

Industrials

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Carlyle Group, Clayton Dubilier & Rice, Hertz, Merrill Lynch Global Private Equity

December 2012 /

13/12/2012 17:56:29

ON THE COVER:

Deal of the Year – MedcoEnergi acquires Malik Block 9

DEAL OF THE YEAR

— MedcoEnergi acquires Malik Block 9 -----------------------------------------------------------------------Acquisition International takes a closer look at MedcoEnergi and the Malik Block 9 acquisition. ------------------------------------------------------------------------

MedcoEnergi PT Medco Energi Internasional Tbk (MedcoEnergi) is a publicly-listed Indonesian national company with current oil and gas production of around 80 thousand barrels of oil equivalent per day. MedcoEnergi was founded in 1980 by Arifin Panigoro, one of Indonesia’s leading oil and gas businessmen, as the first private national oil and gas drilling company. MedcoEnergi’s operations in Indonesia include operating 10 oil and gas blocks, maintaining working interests in three blocks, and holding an economic participating interest in an exploration field. The company has expanded its operation from Indonesia to Oman, Yemen, Libya, the Gulf of Mexico, the United States of America.

/ December 2012

AI Magazine 1212.indd 12

In addition MedcoEnergi operates several gasfired, coal power plants and supplies electricity to the Indonesian State-Owned Electricity Company (Perusahaan Listrik Negara/PLN), is a producer of Liquefied Petroleum Gas, bio-ethanol, coal, and is also involved in the trade and distribution of high speed diesel (HSD). “In order to grow our business and achieve our goals, we have acquired an enormous amount of knowledge and surrounded ourselves with the most talented human capital,” said Lukman Mahfoedz, President Director & CEO of MedcoEnergi. “MedcoEnergi is committed to providing energy for society. The company is set to double its current production rate in the near future by delivering successful major projects, growing its reserves organically and inorganically, while always complying with the highest safety, health and environmental standards. Our aim is to maximise value for our shareholders, as well as other stakeholders.”

The Malik Block 9 acquisition MedcoEnergi, through its wholly owned subsidiary Medco Yemen Malik Ltd, signed the Completion documents with Reliance Exploration & Production DMCC (“REPDMCC”) marking the formal acquisition of the 25% participating interest in Block 9 (Malik), Republic of Yemen on 4th December 2012, with the effective economic date of 1st January 2012. Having obtained the approval of Ministry of Oil and Minerals of Republic of Yemen on 24th November 2012, and the completion of this transaction, MedcoEnergi will effectively have 21.25% participating interest (after taking into account a proportionate carried share of Yemen Oil and Gas Corporation (“YOGC”)). Thus, the structure of participating interest ownerships in Block 9 Production Sharing Agreement now become as follows: • Calvalley Petroleum (Cyprus) Ltd- 42.50% (Operator) • Medco Yemen Malik Limited – 21.25% • Hood Oil Limited – 21.25% • YOGC – 15.00%

ACQUISITION INTERNATIONAL

13/12/2012 17:56:31

ON THE COVER:

Deal of the Year – MedcoEnergi acquires Malik Block 9

Block 9 is an exploration and production block located in the province of Hadramaut, Republic of Yemen, about 350 kilometres north-east of the Yemeni capital, Sana’a. The Block, which is located within the Sayun-Masila Basin, has an area of 2,234 square kilometres, in which some of its area has previously been explored. On 25th August 2005, the Government of Yemen granted the construction license for this Block for the period of 20 years. The license also states that the holders of participating interest of this block (the Contractor) have the right to negotiate for an extension of another five years after 2025. The estimated 2P gross reserves of Block 9 are approximately 58.6 MMBO (as of 1st January 2012) and are envisaged to produce up to approximately 14.5 MBOPD. Discoveries in Block 9 include four oil fields. MedcoEnergi already had an existing exploration operation in Yemen, and has a very strong relationship with the Yemeni government. The deal took 17 months from first due diligence to completion, and was regarded as a success by MedcoEnergi due

ACQUISITION INTERNATIONAL

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to the timing to close, pricing, reserves, production, and also upside potentials from increased production as well as various exploration prospects The deal supports MedcoEnergi’s business strategy to continue strengthening its portfolio assets, including through acquisition. The company’s target for acquisition is for producing assets with many upside potentials for exploration prospects, and Block 9 fits this criteria. “As MedcoEnergi has determined to become an active player in the Middle East and North Africa region, the acquisition of Block 9 helps to realise our growth strategy and to build our portfolio of producing assets as a whole, in addition to our current exploration areas of Block 82 and 83 in Yemen,” commented Mr Mahfoedz. “We believe the contribution of MedcoEnergi in Block 9 will reflect positively for the Host Government, the partnerships of Yemen Block 9 PSC, as well as for Medco Energi’s operational and financial performance. “The Yemeni Government’s continuous support and cooperation in making this Transaction happened were exemplary.”

The deal has particular significance as Yemen is one of the developing countries and has a high need for foreign direct investment. MedoEnergi’s role in the block is anticipated to have a positive impact for the Yemeni government, and the deal marks a success in the government’s efforts to enhance foreign direct investment flows into the country. This success, along with the continuation of MedcoEnergi’s ambitious growth plans, led to the deal being selected as an Acquisition International Deal of the Year.

Company: PT Medco Energi Internasional Tbk Name: Lukman Mahfoedz Email: medc@medcoenergi.com Web: www.medcoenergi.com Address: The Energy 52nd Fl., SCBD Area Lot 11 A, Jl. Jend. Sudirman, Jakarta 12190, Indonesia Telephone: +62-21 2995.3000

December 2012 /

13/12/2012 17:56:34

ON THE COVER:

African Deal of the Year – PIC, South Africa’s Largest Investment Managers, Invest $250m in Ecobank

AFRICAN DEAL OF THE YEAR

— PIC, South Africa’s Largest Investment Managers, Invest $250m in Ecobank -----------------------------------------------------------------------Acquisition International discusses the PIC investment with Ehouman Kassi, Head of Investment Banking at Ecobank Transnational Incorporated (“Ecobank”). ------------------------------------------------------------------------

Ecobank Ecobank’s dual purpose is to build a world-class panAfrican bank and to contribute to the economic and financial integration and development of Africa. The bank operates as “One Bank” across 33 African countries with common branding, standards, processes and technology to provide a consistent and reliable customer experience. It provides wholesale, retail, investment and transactional banking services to governments, financial institutions, multinationals, local companies, SMEs and individuals. Ecobank also has international offices in Paris, Dubai, Beijing and London and will be opening an office in New York soon. The group intends to extend its Middle African footprint to include Angola (currently a rep. office), Ethiopia, South Sudan, Mozambique and Madagascar. Ecobank believes that it has a responsibility to be socially relevant to the communities that it serves. The bank is strongly committed to sustainable development of the region and is a signatory of the Equator Principles, the UNEP Finance Initiative and the UN Global Compact. “The Sustainability agenda is very important for Ecobank,” said Mr Kassi. “It forms a core part of our strategy. It is not just ‘lip service’, but a critical part of how we do business on a day-to-day basis.” Ecobank’s three strategic priorities are: • Providing world-class customer service, embracing technology to offer convenient, accessible and reliable banking services • Building shareholder value by taking a longterm strategic view and monetising its unique presence in Middle Africa • Becoming an employer of choice, by attracting, retaining and growing Africa’s best talent. Public Investment Corporation Government Employees Pension Fund

and

Established in 1911, the Public Investment Corporation (SOC) Limited (the “PIC”) is one of the largest investment managers in Africa today, managing assets of over R1.17 trillion.

/ December 2012

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The PIC, a registered financial services provider, is wholly owned by the South African Government, with the Minister of Finance as the shareholder representative. The PIC invests funds on behalf of public sector entities, with this investment in Ecobank undertaken for the Government Employees Pension Fund (the “GEPF”), Africa’s largest pension fund. The PIC’s goal is not only to meet, but exceed its clients’ expectations and its shareholder’s investment objectives through thorough research, careful risk analysis and stringent compliance practices. The investment The PIC, on behalf of the GEPF, invested $250 million (approximately R1.7 billion) in newly issued common equity of Ecobank Transnational Incorporated, the parent company of the Ecobank Group. Mr Kassi explained that there were a number of reasons for the transaction from Ecobank’s perspective. “Ecobank was looking for a stable long-term investor with deep enough pockets to satisfy a significant portion of Ecobank’s funding requirements,” he commented. “The PIC and GEPF were the perfect fit for us, being a sizeable pension fund with a long-term investment horizon.” In addition, the PIC, being the largest shareholder of listed companies in South Africa, can provide Ecobank with enhanced access and exposure to potential South African clients as they expand into Africa and the South African investment community, which is increasingly seeking ways to tap into the growth being experienced by the rest of Africa. Going forward, Mr Kassi stated that the PIC is a source of stability and strength in Ecobank’s shareholder base, which helps support the growth of the company. “Given our footprint, we also offer the PIC a network of intelligence throughout Middle Africa, and can work with them as they review other investment opportunities in the region. This equally applies to any of our stakeholders/clients.” The transaction was first discussed at a high level between the companies’ most senior management over a period of more than a year. However, Mr Kassi

noted that it was the acquisition of Oceanic Bank in Nigeria that provided the perfect opportunity for both entities to move forward rapidly in actualising their goal of making the PIC a shareholder. With the impetus of the Oceanic transaction, execution of the investment took approximately six months. According to Mr Kassi, the main challenge in executing the transaction was to meet Ecobank’s required timeframe given the acquisition of Oceanic Bank. “The PIC is a fund manager but was in fact making the investment on behalf of the GEPF, the largest pension fund in Africa,” he said. “Ecobank and its advisors had to complete a complex due diligence and approval process at the same time as they were working on the Oceanic acquisition, which was in itself an extremely complex transaction.” The impact of the investment Mr Kassi stated that the investment has had a significant impact on Ecobank in a number of ways. Firstly, it has raised the profile of the company in the international investment community enormously. “With the stamp of approval of the PIC and GEPF, interest in the Ecobank story has intensified with the consequent effect of widening Ecobank’s financing options considerably in the future. This is particularly true in South Africa where an increasing number of new funds are being started up with a dedicated sub -Saharan mandate. This investment in itself was the first in the movement by the GEPF to allocate c.5% of their c.$150 billion of assets to the rest of Africa.” Secondly, Ecobank has been able to capitalize on its relationship with the PIC and GEPF – alongside its existing alliance with Nedbank - to build a stronger client base among the South African corporate and investment community. “Ecobank is increasingly seen as the best option for South African companies as they commence, grow or acquire operations and companies outside of their home territory in Africa. Mr Kassi stated that the transaction was very successful, noting that it was a balanced and well-negotiated process that gave balance to requirements from both sides. “Ecobank gained a financially strong and long term shareholder at a reasonable premium to its share price at the time.

ACQUISITION INTERNATIONAL

13/12/2012 17:56:34

ON THE COVER:

African Deal of the Year – PIC, South Africa’s Largest Investment Managers, Invest $250m in Ecobank

“The PIC/GEPF gained immediate access to one of the most diverse financial institutions in Africa, giving them a unique platform through which to access the investment opportunities they seek across the continent.” Further deals Following this investment, funds managed by the IFC – who have been one of Ecobank’s longest standing capital providers and large shareholders – also invested a further $100 million at the same price as the PIC. This has strengthened the bank’s balance sheet, and increased the IFC’s holding to 14.1% of the company. They are now the second largest shareholder after the PIC, who own 18.2%. “Combined with the $285 million loan facility from Nedbank in November 2011, this represents a total capital raising of $635 million in under nine months,” observed Mr Kassi. “This is a very substantial volume for a Middle African listed corporate – perhaps the largest program achieved ‘post crisis’.”

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Ecobank believes that it is adequately capitalized for its current business after the proceeds of the PIC and IFC transactions. However, as mentioned by the bank’s CEO Designate Mr Thierry Tanoh on its Q3 Investor Conference Call, Ecobank is going through its budgeting and outlook process for 2013. The bank will need to wait for the results of this and the Board’s review. The future for Ecobank Ecobank is optimistic about its future. Formal guidance for business growth/targets for 2013 will be communicated in the first quarter of 2013, but Mr Kassi noted that the region in which it operates is set to continue world-leading structural growth in the coming years and decades, and Ecobank is at the forefront of that growth. “In particular, intra-African trade is set to increase strongly. Currently intra-African trade constitutes approximately 15% of total trade, up from c.8% in 2008. By contrast, this figure is around 60% within

both the European Union and Asian regions. Our macro-economics research team estimates that this intra-African trade will grow to at least 20% in the next 10 years,” he concluded.

Company: Ecobank Transnational Incorporated Name: Ehouman Kassi Email: ekassi@ecobank.com Web: www.ecobank.com Telephone: +228 22 21 03 03

December 2012 /

13/12/2012 17:56:38

ON THE COVER:

Brazilian Deal of the Year – Diageo acquires Ypióca

BRAZILIAN DEAL OF THE YEAR

— Diageo acquires Ypióca -----------------------------------------------------------------------Acquisition International speaks to Olga Martinez, Managing Director of Diageo Brazil, to get some insight into the company’s acquisition of Ypióca. ------------------------------------------------------------------------

Diageo Diageo is the world’s leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, beer and wine. These brands include Johnnie Walker, Crown Royal, JεB, Buchanan’s Bushmills, Smirnoff, Cîroc and Ketel One, Baileys, Captain Morgan, Tanqueray and Guinness. Diageo is a global company, with its products sold in more than 180 countries around the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE). In Latin America & Caribbean, Diageo is the leading international spirits company, and reported sales of £1.2 billion for the fiscal year ended on June 2012, which represents a 19% growth vs. the previous year. The acquisition In May 2012, Diageo reached agreement with Ypióca Agroindustrial de Bebidas S/A to acquire the leading premium cachaça brand, Ypióca, and certain production assets. Conversations with the seller started back in October 2010. The transaction closed on Aug 2012. The acquisition was financed through existing cash resources. Martinez explained that Cachaça is the national drink of Brazil and is embedded into the Brazilian culture. It is the largest spirits category in Brazil with ~86m cases, and consumed across all demographic segments, LPA age groups and regions. Cachaça is a local spirit distilled from fermented sugarcane juice, and the base of Brazil’s national cocktail, the “caiprinha”. Ypióca’s volume is over six million cases, representing an 8% volume share within the cachaça category, which is fragmented with four key players accounting for around half of the total volume. “The acquisition of Ypióca is a step change for us as it more than doubles our size in Brazil and gives us a platform to further penetrate the middle class by reaching a larger and wider outlet universe with a combined broader and complementary brand

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portfolio that covers more categories and price points,” commented Martinez. “We are seeing the middle class grow in Brazil in both number and income, which will drive premiumisation across all categories. We believe that Ypióca is a great way to participate in the premiumisation of local spirits, as 100% of Ypióca’s volume is at a premium to the average price of cachaça.” The average price of cachaça is around ~R$6 per litre and Ypióca’s key brand (Ypióca Contagota) is retailing above R$9 per litre and the lowest priced brand (Sapupara) is retailing above R$7. When compared to the volume category leader, Ypióca has a higher penetration in the higher socio-economic level population, which drives premiumisation opportunities. “In addition, Ypióca has been the most innovative player in the category in recent years, with the largest portfolio of premium products among the key players, and it is now the leader in the premium cachaça segment,” noted Martínez.. “Premiumisation and pricing are key, as the overall cachaça category has seen double-digit revenue growth over the last few years due to improved price/mix. The acquisition of Ypióca gives Diageo the leading premium brand with relevant scale in the largest local spirits category. It will also provide Diageo with an enhanced platform from which to accelerate the long term growth of the company’s premium international spirits brands in Brazil. “Diageo is well positioned in Brazil to drive the growth of Ypióca leveraging its more than 160 years of heritage and strong brand equity with Diageo’s marketing and distribution capabilities,” observed Martínez.

Asia, Africa and Latin America, and expects to have 50% of sales coming from these markets by 2015. As part of this strategy, besides Ypióca, the company has negotiated transactions such as Mey Icki in Turkey, ShuiJingFang in China, Halico in Vietnam, and more recently United Spirits in India “Diageo is always looking for more investment opportunities that support our growth ambitions,” said Martínez. “These investments need to be top line accretive, meet internal hurdle rates, as well as a good fit into our strategy. They need to fill a gap in our portfolio or enable participation in a profit pool where we currently don’t play.” The future for Ypióca Martínez stated that Ypióca has the best brand attributes among key players, which gives Diageo a great platform for brand building initiatives. She noted that Cachaça is an underinvested category in terms of A&P, which gives Diageo the opportunity for brand building and further premiumisation, and through that the opportunity to grow its share within the category. “We think we can accelerate the growth of Ypióca, as it has traditionally focused on commercial execution instead of brand building initiatives,” she commented. “So with more investment we can drive growth, and we can innovate with products that further complement our portfolio.” “Ypióca is predominantly consumed in the Northeast of Brazil, although with high brand recognition all through Brazil, which combined with Diageo’s current strength in the south of Brazil represents a solid growth platform. Therefore, we believe that with the right distribution and brand building activities, there is a large growth opportunity for Ypióca,” concluded Martinez.

“Ypióca will provide Diageo with improved coverage in distribution in the Northeast of Brazil. It will also give Diageo increased commercial leverage for our international brands, resulting in a combined broader portfolio, and covering more categories and price points in the market.” Further acquisitions Diageo has consistently increased its level of investment in emerging and fast-growing markets in

Company: Diageo Name: Olga Martinez Web: www.diageo.com

ACQUISITION INTERNATIONAL

13/12/2012 17:56:43

ON THE COVER:

German Property Deal of the Year - PATRIZIA Immobilien AG led consortium acquires LBBW Immobilien

GERMAN PROPERTY DEAL OF THE YEAR

— PATRIZIA Immobilien AG led consortium acquires LBBW Immobilien

through creating a suitable structure meeting German regulatory requirements, raising competitive debt finance and putting in place a detailed business plan unlocking the real value of LLBW Immobilien GmbH.” The acquisition of LBBW Immobilien increased PATRIZIA’s Assets under Management to almost €7 billion. LBBW Immobilien has remained a standalone entity with its own employees and will continue its business in line with that of recent years. Mr Moser noted that the main challenge of the deal was to create an investment structure that was suitable for German regulated investors. This was achieved through a restructuring of the target company as well as tailor-made debt financing. He added that the investment has substantially improved LBBW’s profitability. “After less than a year under PATRIZIA’s management LBBW Immobilien’s performance as measured by certain important KPIs (cost-tomanage, rent per sqm, profitability of investment program and margin on property sales) are all in the top quartile as compared to other German residential housing companies,” said Mr Moser. “Distributions in the first year will exceed the projected levels.” -----------------------------------------------------------------------Acquisition International speaks to Matthias Moser, Managing Director of PATRIZIA Alternative Investment GmbH, a subsidiary of PATRIZIA Immobilien AG, to discuss the acquisition of LBBW. ------------------------------------------------------------------------

PATRIZIA Immobilien AG´s strategy is to become one of the leading European full service real estate investment houses. It is a German SDAX listed public company with more than 580 employees. It was founded over 28 years ago by Wolfgang Egger, who is still the majority shareholder and CEO. The company has almost €7 billion of assets under management. PATRIZIA provides the full range of real estate related products and services, comprising: project development, property management, asset management, sales and investment in both, the residential and the commercial sector. In February, an investor consortium led by PATRIZIA won the competitive bidding process for the acquisition of LBBW Immobilien GmbH for a purchase price amounting to €1.435 billion. The deal took nine months to complete.

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The consortium consists of five German insurance companies which represent around 40% of the equity (including LVM Insurance), two foreign pension funds with a c. 30% stake (including Swedish state pension fund AP3 with more than 25% and a Swiss pension fund), three German pension funds (c. 25%), a Baden-Württemberg based savings bank (ca. 3%) as well as PATRIZIA Immobilien AG (c. 2%). “We are acting as Investment- and Asset Manager for these long-term oriented investors. It is our aim to enhance the value of LBBW Immobilien GmbH. We will invest €25 million in repairs and maintenance p.a. in order to maintain the quality of the residential units”, said Wolfgang Egger, CEO of PATRIZIA. “PATRIZIA is not only service provider but also co-investor and has contributed €15 million of equity to the consortium.” Mr Moser explained that LBBW is an excellent strategic fit for PATRIZIA’s investor base. “It provides a very competitive risk-adjusted total return and significant annual cash distributions,” he commented. “PATRIZIA was able to add value

“PATRIZIA is aware of the great responsibility towards LBBW Immobilien GmbH’s employees, its tenants, the seller and its own investors”, said Mr Egger. “The contractually agreed Social Charter will be complied with and realised in full. We look forward to a good cooperationwith all partners.” “LBBW Immobilien, which we have re-named to Süddeutsche Wohnen (SüDeWo), will continue on its path to become the leading residential housing company in South-Germany,” concluded Mr Moser.

Company: PATRIZIA Alternative Investments GmbH Name: Matthias Moser Email: alternative_investments@patrizia.ag Web: www.patrizia.ag Address: Parktower, Bockenheimer Anlage 44, 60322 Frankfurt, Germany Telephone: +49 69 7191892-0

December 2012 /

13/12/2012 17:56:47

ON THE COVER:

Hong Kong/Jordan Cross Border Deal of the Year – HPF acquires Jordan Dubai Capital

HONG KONG/JORDAN CROSS BORDER DEAL OF THE YEAR — HPF acquires Jordan Dubai Capital the company and develop regionally further. More resources, bridging Asia and the Middle East.”

Amman / Jordan

HPF is continuing the pursuit of several other transactions both in the MENA Region as well as South East Asia, and is looking at other opportunities for Asia & South East Asia through HPF, and the MENA Region through JDC. “HPF is constantly looking for investment opportunities in HK, China, SE Asia, Middle East and Europe,” added Mr Siu. He believes that the deal has been successful in the sense that HPF felt there was value in the entry price. The acquisition is a long term investment, so HPF is not overly concerned in the short term fluctuations in the valuations of some of the investments in the portfolio. “The current economic environment has placed obstacles in our path, however our growth potential is enormous. The recent Arab Spring has created plentiful opportunities, for entry into a series of markets where normally the entry is always at much higher premiums let alone at discount. For us and for others who wish to take advantage there are many opportunities still out there for medium to long term players.” -----------------------------------------------------------------------Alan Siu is the Managing Director of HPF Private Investment Fund Company Ltd. He is a finance professional with over 20 years’ experience in the global markets. He held senior positions in international investment firms in London and Hong Kong prior to joining HPF. ------------------------------------------------------------------------

HPF, conceived in late 2011 and formalised in January 2012, is a Hong Kong-based investment and management company. The company focuses on regional and emerging markets with under-valued assets. In particular, HPF seeks exciting growth opportunities presented by the MENA Levant region and the South-East Asian developing and emerging economies. Mr Siu stated that HPF is uniquely positioned to bring together the MENA Levant and Asia regions with the company’s extensive experience and networks. “Utilising the expertise of local teams in these two regions, we bridge investors and investees and develop businesses locally and also on a crossregion basis,” he explained. “As a result of our unique synergies, we are the first Hong Kong-based direct investor in the MENA Levant region with the Jordan Dubai Capital acquisition.” Mr Siu describes Jordan Dubai Capital as a professional organisation with an outstanding management team led by CEO Mr Ismail Tahboub. He noted that it has an excellent track record since its establishment in 2005 and it provides HPF

/ December 2012

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an ideal platform to launch businesses within the Middle East, which is one of the company’s regions of interest.

JDC will continue on its path of growth and development and currently has several opportunities under evaluation. JDC will also strive to be a socially aware and corporate responsibly market force.

“Besides, JDC’s portfolio of properties company (Jordan Dubai Properties), insurance company (First Insurance) and bank (Jordan Dubai Islamic Bank) fits in our sectors of interest,” he commented. “Each company itself is a distinguished leader within its industry, for example, Jordan Dubai Islamic Bank won the fastest growing bank in Jordan award in 2011.”

For example, JDC & HPF have launched a Think Tank Advisory Group, bridging Europe and MENA. The Think Tank Advisory Group has several distinguished members such as H.E. Mr Claude Guéant, H.E. Dr Mohammad Halaiqah, H.E. Faris Sharaf and Dr Musa Shteiwi, a highly distinguished academic emphasising social issues.

The transaction took just under a year to complete from conception to completion, with first contact in December 2011 and completion in July 2012. The source of funds for the deal came from a group of high net worth individuals from Hong Kong, China and Europe. “To bridge various cultures was a challenge, may it be from our investor side (three continents) as well as the exiting investors (four countries and Bahrain, UAE – Dubai – Jordan – Iraq & corporate entities such as Social Security Arab Bank, Adjax Bank) and keeping the project on schedule and on track was quite a challenge,” observed Mr Siu. “Multiple countries, multiple corporate cultures, however, everybody pulling together created a success story for all. “With the professional and excellent team, there will be no major change to JDC with HPF coming in,” he added. “We will work closely with JDC to grow

In 2013, HPF plans to expand the reach of the Think Tank to include Asian notable personalities, both in business and government as well as academia. JDC has also established a Centre for Excellence to further develop and be active on social issues in the MENA region.

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Company: HPF Private Investment Fund Company Ltd. Name: Alan Siu Web: www.hpf.com.hk

ACQUISITION INTERNATIONAL

13/12/2012 17:56:58

AI Magazine 1212.indd 19

13/12/2012 17:57:00

ON THE COVER:

Pakistani Deal of the Year - UBL-led consortium acquires stake in KBL

PAKISTANI DEAL OF THE YEAR

— UBL-led consortium acquires stake in KBL

“UBL, being one of the top Banks in the country, continues to focus on investment in people, technology and products, which will place it in a good position to maintain its growth momentum and perform better than its peers,” commented Mr Bokhari. “Over the years, UBL has focused on launching innovative products to facilitate its customers both locally and abroad. Its diversified portfolio has made it stand out amongst its peers. This is evidenced by the fact that UBL was the first local Bank in Pakistan to be granted the status of Authorised Derivative Dealer.” One of the products launched by UBL is the Tezraftaar Account service which allows non-resident Pakistanis to open an account in any branch of UBL in Pakistan simply through UBL overseas branches in UAE, Bahrain and Qatar or through selected money transfer companies in Kuwait, Oman and UAE.

-----------------------------------------------------------------------Mr Atif Riaz Bokhari, President & CEO at United Bank Limited, gave Acquisition International a detailed look at the company and the KBL acquisition. ------------------------------------------------------------------------

United Bank Limited United Bank Limited (“UBL” or “the Bank”) is a banking company incorporated in Pakistan and is engaged in commercial banking and related services. Founded in 1959, UBL is one of Pakistan’s largest private banks with a global strategic outlook and a strong track record of growth in business in terms of volume and profit. UBL operates a network of over 1,200 branches across Pakistan, including 14 domestic Signature Priority Banking lounges and 18 overseas branches. It offers a dynamic portfolio of globally competitive products and services. With credit rating of AA+/A-1+, and a customer base of over 3.5 million customers, deposits of Rs.697 billion and advances amounting to Rs.379 billion at 30th September 2012, it is at the forefront of the banking and financial services sector in Pakistan. UBL launched its branchless banking operations in April 2010 under the brand name of UBL Omni, which now operates from over 9,000 Omni retail outlets present in more than 680 cities and towns across the country.

20 / December 2012 AI Magazine 1212.indd 20

“In addition to convenience, this will enable customers to earn attractive rates of return in Pakistan whilst availing the full range of UBL products and services,” explained Mr Bokhari. “The success of this initiative can be gauged by the fact that UBL alone commands a 20% market share in the home remittance market.” UBL’s Ordinary shares are listed on all three stock exchanges in Pakistan whereas its Global Depository Receipts (“GDRs”) are listed on the UK Listing Authority and the London Stock Exchange Professional Securities Market. These GDRs are also eligible for trading on the International Order Book System of the London Stock Exchange. UBL was the first Pakistani Bank to be granted the status of Authorized Derivative Dealer (“ADD”) in Pakistan. It is also the first institution from Pakistan & third in South Asia to be accredited with Primary Membership of International Swaps & Derivatives Association. A snapshot of the Bank’s performance as of September 30, 2012 is given below: PKR (Mn) US$* (Mn) Total Assets 910,081 9,488 Total Deposits 697,388 7,271 Total Advances (net) 378,739 3,948 Equity** 82,780 863 Pre-tax Profit 22,095 230 * PKR/ USD parity assumed at 95.92 (Business Recorder, November 15, 2012) ** Excluding revaluation surplus

UBL has also launched Omni, a branchless Banking platform, which provides basic banking services to the masses through retail agents. UBL is the only commercial bank in Pakistan to have an operational business which has been made possible through inhouse proprietary technology. “UBL Omni has transformed the Government to People (G2P) disbursements arena in Pakistan by working closely with the Government of Pakistan (GoP) and multilateral agencies,” commented Mr Bokhari. “The Bank channelled over 3.5 million cash disbursement transactions and provided transparent and efficient services to one million flood affectees, 44,000 World Food Program beneficiaries and 840,000 recipients of the Benazir Income Support Program through successfully deploying original technological innovations. These unparalleled efforts have led UBL Omni to be recognised as a benchmark and a role model for G2P payment services not only locally but also globally.” UBL is one of the few domestic banks with a strong international presence in the region. The international business, which is one of the most profitable amongst the domestic banks, remains a critical contributor and growth avenue for the bank. The Bank continues

ACQUISITION INTERNATIONAL

13/12/2012 17:57:01

ON THE COVER:

Pakistani Deal of the Year - UBL-led consortium acquires stake in KBL Karachi / Pakistan

to pursue opportunities to expand its international footprint within the region. In pursuance of the Bank’s strategy on network expansion, UBL received approval from the State Bank of Pakistan and the Bank of Tanzania to commence operations in Tanzania. UBL continues to explore other markets which offer the right opportunities and are a natural fit with its overall strategy. The KBL Acquisition UBL, along with ASN-NOVIB Microkredietfonds (Triple Jump B.V), Credit Suisse Microfinance Fund Management Company (responsAbility Global Microfinance Fund), Rural Impulse Fund II S.A. SICAV-FIS (Incofin Investment Management Comm. VA), ShoreCap II Limited (Equator Capital Partners LLC) (“Consortium”) acquired a 67.4% equity stake in Khushhali Bank Limited (“KBL”). KBL was established in 2000 with a poverty alleviation agenda to provide microfinance services to the poor, particularly women, through communitybased social mobilisation. The existing network of KBL comprises of 109 branches spread across 72 districts of Pakistan, which is the largest geographic spread by an MF entity in Pakistan. Post the acquisition the Consortium holds 79.2% of KBL’s share capital inclusive of UBL’s existing 11.7% shareholding in the institution. UBL acted as the Manager to the Transaction and the Lead Investor in this acquisition. UBL’s primary responsibility was to evaluate the transaction and conduct a valuation exercise along with sensitivity analysis in order to finalise the bid price. UBL was also responsible for obtaining all the regulatory approvals, coordination with all the stakeholders i.e. other Consortium members, Sellers’ consortium, advisors, etc., coordinate both the accounting and legal due diligence, liaison with the legal advisors to

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review and finalise the transaction agreements and ensure execution of the same. From the date of submitting UBL’s expression of interest, it took around 12 months to close the deal. “UBL has always been at the forefront of innovation both in terms of introducing new technologies as well as rolling out new business models,” said Mr Bokhari. “Access to Financial services has been proved as one of the most significant factors in improving overall quality of life for the vast majority of the poor that generally do not have access to even basic financial services like safe storage of money in an account, funds transfers, access to microcredit, payments and insurance.” In Pakistan, the conventional banking sector serves less than 20% of the population. It was with this in mind that UBL developed Omni, its branchless Banking platform. “Taking this a step further, enhancing UBL’s stake in KBL made for a very compelling business case as the natural synergies with UBL’s existing Omni platform allows the Bank to reach out to an entirely new segment of the un/under banked market to provide credit and deposit financial services to them,” explained Mr Bokhari. “UBL believes that this acquisition has tremendous synergies for the Bank and is an economically viable and socially responsible investment that will significantly enhance financial inclusion.” Mr Bokhari noted that one of the key challenges faced was to arrive at an agreed valuation and finalisation of the bid price and bid strategy based on the same. “Due to unavailability of a valid benchmark, agreeing on a valuation proved to be a key challenge during the course of the Transaction,” he commented.

“Another major challenge faced was coordinating with all the stakeholders including the Consortium members, Transaction Advisors, Regulators, Sellers’ Consortium and their advisors.” Leveraging its experience of running a large network, UBL has initiated an operational review at KBL which is expected to result in operational efficiencies. In parallel with the availability of the UBL Omni distribution network to KBL, its distribution reach will grow exponentially at a margin of its current cost of expansion. Additional product features are being introduced on the strength of the UBL product suite. “We are forecasting a manifold growth in profitability over the next three years, and expect financial and operational sustainability even without aids and grants,” observed Mr Bokhari. Moving forwards, UBL will continue to consider any good investment opportunities which fit well with its strategic plans. For KBL, UBL foresees better operating efficiencies and a steep rise in revenue streams.

Company: United Bank Limited Name: Atif R. Bokhari Web: www.ubl.com.pk Address: President Secretariat, 8th Floor, UBL Head Office, State Life Insurance Corp. Building #1, I.I. Chundrigar Road, Karachi, Pakistan Telephone: +92 21 111 825 111

December 2012 /

13/12/2012 17:57:06

ON THE COVER:

Russian Private Equity Deal of the Year - EBRD and RDIF buy into Russia’s Moscow Exchange

RUSSIAN PRIVATE EQUITY DEAL OF THE YEAR

— EBRD and RDIF buy into Russia’s Moscow Exchange

-----------------------------------------------------------------------In January the EBRD and the Russian Direct Investment Fund (RDIF) agreed to acquire 6.29% and 1.25% stakes respectively in the Moscow Exchange MICEX-RTS. Acquisition International speaks to Richard Wallis, Moscow spokesman for the EBRD, and Kirill Dmitriev, CEO of the RDIF, for a closer look at the deal. ------------------------------------------------------------------------

The EBRD The EBRD, founded in 1991, is owned by 63 governments and two international institutions. It operates across a wide area stretching from Mongolia to the southern and eastern Mediterranean. It promotes the transition to a market economy and focuses on the growth of the private sector.

In all of its investments, the RDIF is mandated to co-invest alongside some of the largest and most sophisticated investors globally – thus acting as a catalyst for direct investment in Russia. The fund was created in 2011 under the leadership of the then President of Russia, Dmitry Medvedev, and the then Prime Minister, Vladimir Putin, and will be managed by a highly qualified team of private equity investors with broad international and Russian experience.

“The EBRD is one of the world’s multilateral development banks, but it does not offer soft loans or equity finance at non-commercial rates,” explained Mr Wallis.

The investment Russia’s stock market is the most developed in the Commonwealth of Independent States (CIS). The Moscow Exchange is one of the top 20 global securities exchanges in terms of trading volume, as well as one of the top 10 global futures and options markets as regards derivatives, again as measured by trading volumes.

The Russian Direct Investment Fund The Russian Direct Investment Fund is a $10 billion fund established by the Russian government to make equity investments primarily in the Russian economy. Kirill Dmitriev is the fund’s CEO.

The investment, which took three to four months to complete, is part of a long-term strategy to promote the development of local capital markets in Russia and broaden the regional and international appeal of this recently unified exchange. The EBRD and

22 / December 2012 AI Magazine 1212.indd 22

RDIF’s equity investments support Russia’s goal of transforming Moscow into a globally important and competitive international financial hub. This investment breaks new ground for the EBRD as this is the first time the bank has invested in a trading exchange in one of its 29 countries of operation. For the RDIF, the transaction represents its first investment only six months after being established. As a result of this investment, the EBRD has nominated an independent director to the Board of the exchange, a body which determines its development strategy and agrees listing and reporting standards. “The equity investment will enable EBRD to be an active shareholder in the leading stock exchange in Russia and the CIS region,” commented Mr Wallis. “The EBRD, as an investor and business partner will, through its Board Nominee, be able to provide support in key areas such as corporate governance, further regional expansion and improvement of the regulations and policies which will contribute to deepen the development of Russia’s capital market.”

ACQUISITION INTERNATIONAL

13/12/2012 17:57:09

ON THE COVER:

Russian Private Equity Deal of the Year - EBRD and RDIF buy into Russia’s Moscow Exchange “This transaction verifies RDIF’s core mission of attracting investment capital to support marketleading Russian companies. In addition, this investment is an important building block in strengthening Moscow as an international financial centre. The RDIF can now fully leverage its extensive relationships with sovereign wealth funds and other leading investors to pursue additional pre-IPO investment in the Moscow Exchange and to further improve its IPO prospects,” added Kirill Dmitriev, Chief Executive Officer of the RDIF.

Moscow / Russia

The Moscow Exchange issued a statement saying that the exchange is excited to welcome the new shareholders: “This investment proves that the reforms that are being implemented in Russia contribute considerably to creating and promoting a favourable investment climate that attracts highcalibre financial investors. This is a vital factor for building in Moscow an international financial centre. “The presence of such prominent institutions among the shareholders also shows that the exchange pursues best practices, meets the highest international standards and has significant growth potential. We thank our new shareholders for their confidence in our company and look forward to doing business together.” The transition impact and demonstration effects associated with this shareholding in the Moscow Exchange are expected to include: • The development of Russian capital markets and, thereby, support the government’s initiative to create an International Financial Centre; • Improvements both in overall corporate governance for Russian listed companies and in listing requirements – in line with international standards; • Supporting the development of Moscow Exchange’s strategic plan ahead of its planned IPO. Mr Wallis noted that the EBRD has invested over €22 billion in Russia alone since it was founded and has a reputation for making positive contributions to corporate governance and increasing transparency in the companies which it finances. “The entry of international investors is a vote of confidence that will certainly attract wider attention to this dynamic emerging market exchange,” he observed. Post-investment, several new exchange services are being implemented by the exchange’s management. Key examples are the introduction of the central clearing counterparty (CCP) and central securities depository (CSD). Other investors For the RDIF, the investment opened the door for bringing in other high-quality international investors as shareholders of the exchange. This included US private equity fund Cartesian Capital Partners, LLC and BlackRock Investment Management (UK) Limited (BlackRock UK). In July, Cartesian Capital Group, a global private equity firm, and RDIF, acquired stakes in the Moscow Exchange from ZAO UniCredit Bank. Following this transaction, the RDIF owned approximately 2.7% and Cartesian owned approximately 2.5% of the Moscow Exchange. UniCredit Bank reduced its stake in the exchange to 6.2%.

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In September, funds and accounts under management by BlackRock UK purchased an undisclosed number of shares in the Moscow Exchange in a pre-IPO investment facilitated by the RDIF. These shares were previously acquired by the RDIF. BlackRock UK’s investment represented the first transaction of the pre-IPO co-investment program set up by the RDIF in June 2012. The program will see the RDIF, BlackRock UK, Goldman Sachs and Templeton work together in pre-IPO situations with market leading Russian corporates planning a Moscow listing. Future investments The Moscow Exchange investment is the EBRD’s first in a trading exchange in its 21-year history. Mr Wallis noted that there may be other engagements with other regional exchanges in the future. “Russia receives about one third of the EBRD’s total investments every year and this makes it the Bank’s largest country of operation,” he explained. “The EBRD equity investment and debt finance criteria include transparency and a commitment to improve corporate governance. The Bank’s criteria for investment is that by doing so, the investment will make a difference for the better. There is no point in the Bank investing in a company which does not need change.”

“The success of the EBRD’s investment will be measured through an exit timed to ensure that a broad transition impact has been achieved in terms of assisting in the successful development of the Russian capital markets, as well as an acceptable economic return on investment. “Moscow Exchange has embarked upon a postmerger integration and an ambitious strategy which includes the introduction of the CCP, CSD, T+N settlement and a series of other improvements which should ultimately increase liquidity, attract further investors and make it the exchange of choice for Russian issuers,” concluded Mr Wallis.

Company: EBRD Name: Richard Wallis Email: wallisr@ebrd.com Web: www.ebrd.com Address: Ducat Place III, Second floor, 6 Gasheka Street, 125047 Moscow Telephone: +7 (495) 787 1111

The RDIF is actively looking at a pipeline of dozens of potential transactions with a wide pool of coinvestors including global private equity, SWFs, and multinational corporates. Looking ahead According to Mr Wallis, the challenge facing the Moscow Exchange is to determine how best to play a pivotal role in strengthening and deepening Russia’s capital markets. “The goal is to increase the local market liquidity which the domestic economy needs to access and for the Moscow Exchange to become the preferred platform for Russian issuers and traders as well as outside investors interested in Russian stocks and other Rouble-denominated financial instruments,” he explained.

Company: Russian Direct Investment Fund Name: Kirill Dmitriev Email: kirill.dmitriev@rdif.ru Web: www.rdif.ru Address: 8 Presnenskaya Nab., Building 1, Gorod Stolits, South Tower, 7th Floor Telephone: +7 495 644 3414

December 2012 /

13/12/2012 17:57:20

ON THE COVER:

South African Mining Deal of the Year – Exxaro acquires African Iron

SOUTH AFRICAN MINING DEAL OF THE YEAR

— Exxaro acquires African Iron -----------------------------------------------------------------------Brian van Rooyen, General Manager Ferrous at Exxaro Resources Limited, gives Acquisition International some insight into the company and the African Iron deal. ------------------------------------------------------------------------

Exxaro Exxaro is one of the largest South African-based mining groups and is listed on the Johannesburg Stock Exchange Limited (JNB code: EXX). Exxaro has a diverse and world-class commodity portfolio in coal, a 39.2% share in Tronox Limited, the world’s biggest fully integrated mineral sands business, and exposure to iron ore through its Mayoko Iron Ore Project in the Republic of Congo and a 20% interest in Sishen Iron Ore Company, a subsidiary of Kumba Iron Ore. As the second-largest South African coal producer with capacity of 42 million tonnes per annum and its interests in mineral sands and iron ore as well as an exceptionally strong project pipeline, Exxaro offers a unique listed investment opportunity. Operations Coal Exxaro has eight managed coal mines, including the Grootegeluk coal mine, which together produce some 42Mtpa of power station, steam and coking coal. Grootegeluk is one of the most efficient mining operations in the world, and operates the world’s largest coal beneficiation complex. There is a robust pipeline of greenfield and expansion projects under way that will culminate in Exxaro becoming one of the largest coal producers in South Africa. It owns a 50% share in the Moranbah South hard coking coal project in the Bowen Basin in Queensland, Australia, and also produces char and related products for the rapidly growing ferroalloys industry.

Mineral Sands The Exxaro group was one of the world’s largest suppliers of titanium dioxide feedstock and zircon until the sale of its interest in the Tiwest joint venture as well as 74% of the South African operations in exchange for a 39.2% interest in Tronox Limited, the world’s largest integrated titanium minerals production and manufacturing company in 2012.

Exxaro also holds a 20% interest in Sishen Iron Ore Company (Pty) Limited. The company’s two mines, Sishen and Thabazimbi together produce more than 40 Mtpa of lumpy and fine iron ore. The Sishen mine, known for its high grade and consistent product quality is one of the largest single open-pit mines in the world.

He stated that the deal was “phenomenally successful”, noting that Exxaro acquired 100% of AKI at a reasonable price within the shortest time possible under ASX regulations.

“Exxaro has a suite of world-class operating assets, a superb pipeline of growth projects and people with an unparalleled technical capability spanning the entire value chain from exploration to final product,” said Mr van Rooyen.

Exxaro:

Brian van Rooyen JP Oosthuizen Nikash Rughubir Riaan Koppeschaar

Investec:

Hugh Thomas Stefan Edelman

Gilbert & Tobin:

Julie Athanasoff Ailyn Choo Neil Pathak

The African Iron acquisition Mr van Rooyen explained that Exxaro believes in the long term fundamentals of the iron ore industry. The acquisition of African Iron (AKI) and its Mayoko Project represents a strategic platform for Exxaro to move towards its objective of producing 10Mtpa of iron ore by 2016. The Mayoko Project is one of the leading projects featuring: • A high grade resource • Sufficient size • Significant upside potential o Unexplored licence areas o Magnetite • Availability and close proximity of logistics infrastructure • Location in a politically stable country • Within a recognised developing iron ore region • A high peer ranking The total deal process took less than six months. An initial scouting visit took place in mid-October 2011, with initial Board approval by 30th November. A general offer to shareholders followed in early January and the bid was declared unconditional on 14th February 2012, eventually leading to compulsory acquisition of outstanding shares, all within minimum prescribed regulatory timeframes.

Base Metals assets Exxaro retains an interest in the Chifeng zinc refinery in China.

“Naturally there were challenges, as can be expected in any transaction of this nature, but the team working on the transaction were fantastic to deal with,” commented Mr van Rooyen. “One of the most important objectives for Exxaro was to make sure of operational control. The team devised an unconventional approach using a two tier price structure for different acceptance levels in the offer. This incentivised shareholders to accept and ultimately delivered the desired outcome.”

Iron Ore interests Exxaro currently holds a 97% interest in the Mayoko iron ore project and an 85% stake in the contiguous Ngoubou Ngoubou prospecting licence, together covering nearly 2000sq km in the Republic of Congo following its 100% acquisition of ASX listed African Iron Limited (AKI).

Mr van Rooyen explained that the deal had a profound impact on Africa Iron. The company was delisted from the ASX after the compulsory acquisition was completed and the entire management of the business transferred to Exxaro HQ in South Africa, where the business is now the centrepiece of the newly formed Exxaro ferrous business.

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The core deal team consisted of:

Further deals Exxaro had a very busy 2011/12 with the divestment of its Base Metals business and the sale of its Mineral Sands Business for a 39.2% stake in the much larger and fully integrated Tronox Limited. “No resource business can afford not to look out for good opportunities if it wants to sustain or grow its business,” explained Mr van Rooyen. “There is always a need to replace resources as they are consumed and to add even more to facilitate growth. Exxaro is built on a great set of assets and it would continue to look at opportunities which have quality ore and are big enough to deliver economies of scale; there are simply no substitutes for quality and scale.” The future for Africa Iron “Exxaro has added more than 20 000m of exploration drilling on Mayoko since March and hopes to have first ore on rail by Q2 next year and get up to 2Mtpa by 2014 in a phased ramp up programme. It will also continue with regional exploration around Mayoko and Ngoubou Ngoubou,” concluded Mr van Rooyen.

Company: Exxaro Resources Limited Name: Brian van Rooyen Email: brian.vanrooyen@ exxaro.com Address: Roger Dyason Rd, Pretoria West, South Africa, 0001 Telephone: +27 82 653 7691; +27 12 307 4153

ACQUISITION INTERNATIONAL

13/12/2012 17:57:22

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13/12/2012 17:57:23

ON THE COVER:

UK Engineering Deal of the Year – Baird-Backed Gabbro acquires Midland Precision

UK ENGINEERING DEAL OF THE YEAR

— Baird-Backed Gabbro acquires Midland Precision

-----------------------------------------------------------------------Acquisition International discusses the Midland Precision deal with Dennis Hall at Baird Capital Partners Europe. ------------------------------------------------------------------------

Dennis Hall is Portfolio Director at Baird Capital Partners Europe, and is director of most of the firm’s investments (including Gabbro Precision). Baird Capital Partners Europe Baird Capital Partners Europe is the U.K.-based buyout firm of Baird Private Equity. The firm provides capital to lower middle-market companies in the Business Services, Manufactured Products and Healthcare sectors, where it has deep experience, knowledge and ability to add value.

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“We apply the strength of our global platform to developing the businesses of our portfolio companies, making use of Baird’s operating resources in the United States, the UK and in China and India,” explained Mr Hall. The firm’s portfolio is primarily in the UK and is focused on companies with opportunities for operational improvement and international growth with enterprise values of between £10 million and £50 million. “Our aim is to acquire niche businesses with international expansion opportunities, to drive growth through operational improvement and create value for our LPs,” added Mr Hall.

“Unlike many of our peers, the established ability to tap into global markets is an important competitive differentiator for our firm. Asia is an important market for growth (i.e. sales, marketing and distribution) for many lower middle market companies and we believe that companies in the lower middle market are increasingly facing the threats and opportunities of globalisation.” In 2002/2003, and building on its operational capabilities in the US and the UK, Baird Private Equity established an Asia operating team to help its portfolio companies capitalise on this opportunity and to mitigate the risks. Baird Private Equity now employs approximately 15 operating professionals in Asia (China and India) that help its portfolio

ACQUISITION INTERNATIONAL

13/12/2012 17:57:25

ON THE COVER:

UK Engineering Deal of the Year – Baird-Backed Gabbro acquires Midland Precision companies take advantage of the increasing demand for goods and services in emerging markets and help them create and improve supply chains in Asia or setup local operations. Projects directly supported by the Asia operating team have generated approximately $15 million of operating income improvements to Baird Private Equity portfolio companies since inception. “The Asia operating team played crucial roles in the returns achieved in Baird Europe portfolio companies Paddock and Aston Carter, and are core to the investment strategies of much of the current pipeline of opportunities,” commented Mr Hall. The Midland Precision Acquisition Gabbro Precision, the engineering services provider to the oil and gas industry backed by Baird Capital Partners Europe, acquired Midland Precision for £10m. Baird first met the business in late summer 2011 and the acquisition was completed at the beginning of February 2012. Deane Wakeling, Managing Director of Midland Precision, joined Gabbro’s executive team and is now managing director for the Group’s engineering division. “We are very excited with this addition to our business at a time when the market is growing strongly and precision engineering skills are at a premium,” said Gabbro Precision Executive Chairman David Barrass. “The acquisition of Midland Prevision supports our strategy to be a leading global engineering solutions provider to the oil and gas industry.” According to Mr Hall, and in line with Baird’s investment strategy the acquisition of Midland continues Gabbro’s progression in to the high end precision engineered components market where it is now a major UK player. It further supports the positioning of the business as a metals solutions provider. “Owning a further key part of its immediate supply chain allows Gabbro to increasingly secure contracts with the end customers rather than spot supply, with the improved visibility of income that provides,” said Mr Hall. “Gabbro provides Midland Precision’s customers with the opportunity to support their international expansion utilising Gabbro’s Malaysian operations.” Commenting on challenges faced during the deal, Mr Hall noted that there was a mini auction process which inevitably brings complications for buyers. “Once we had seen the business and met the MD we quickly built a direct relationship with him that helped us all through the deal mechanics.” Since Baird’s initial investment in Gabbro in December 2007, the strategic intent had been to expand and internationalise the customer base, extend the operational footprint geographically and increase the precision machining capacity and capability. Strong progress had been made in the first two aspects and good progress in the latter, through capital investment and the acquisition of Nexus Engineering in 2009. “Midland Precision brought significant further machining capacity and extended Gabbro’s technical capability particularly in the smaller highly

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machined components,” explained Mr Hall. “The skills within Midland Precision have enabled Gabbro to set-up a Manufacturing Centre of Excellence at Midland where a new office suite centralises the group’s programming and design skills collating and co-ordinating its technical knowledge across the Group. “The deal’s been hugely successful. Operational, customer and management fit has been as strong as anticipated; the integration has been well managed, even seamless, and immediately achieved the supply chain synergies anticipated. The deal has delivered on all the performance targets set, largely financial, as well as further strengthening the senior management team.” Recent and Future Deals It has been a strong year for Baird Capital Partners with three investments so far: the Midland Precision acquisition for Gabbro, the new platform investment in SGX Sensortech (a sensors manufacturer) and the recently announced investment in SR Group (a niche recruitment business focusing on the legal sector ). Also this year Baird’s exit from Spheros achieved a four times money multiple for investors while Aston Carter won BVCA Mid-market BuyOut Team of the Year as well as coming second in PEI Global Operational Excellence Awards (Business & Finance sector) and Paddock was awarded Unquote British Private Equity Awards “Small Buyout of the Year” Award 2011. Gabbro has continued to invest in the existing operations, has added further plant into Midland Precision, doubled the floor space, has added significant capacity to Nexus and geared up Gabbro Malaysia. It would look to add further precision

machining capacity in the UK or Singapore/Malaysia if oil/gas focused and would also look at heat treatment acquisitions. The Future for Gabbro and Midland Gabbro will continue to invest to support its global customer base. “Oil & Gas continues to be a strong sector and precision machining particularly strong. Gabbro has grown organically and by targeted acquisitions, to become a strong platform in both the subsea and downhole markets making it an important element of global supply chains,” concluded Mr Hall. Deane Wakeling, Managing Director of Midland Precision, added: “I am delighted that Midland will be part of Gabbro Precision, a company that shares our vision for service and quality. I believe that, as part of an international business, Midland can go from strength to strength.”

Company: Baird Capital Partners Europe Name: Dennis Hall Email: djhall@bcpe.co.uk Web: www.bairdprivateequity.com Address: Mint House, 77 Mansell Street, London E1 8AF Telephone: +44 (0)20 7667 8346

December 2012 /

13/12/2012 17:57:29

SECTOR SPOTLIGHT:

Crime and Investment Security in Mexico

CRIME AND INVESTMENT SECURITY IN MEXICO cities of Ciudad Juarez, Monterrey and Acapulco, and more recently Guadalajara. The Mexican police have made considerable progress in this year, capturing or killing a number of mafia bosses. “Kidnapping for ransom and extortion still affect some businesses, but more so local companies than large foreign corporations. In practice the direct impact of drugs violence on businesses is very low, especially outside the cartels’ main areas of influence.” Mr Webb-Vidal stated that Mexico is historically a politically stable country. After the 1910-1917 Mexican Revolution, the country was governed by a single party, the Partido Revolucionario Institutional, or PRI, for 70 years. Following a 12-year period in which the centre-right Partido de Acción Nacional, or PAN, governed, this year the PRI has returned to power with the election in July of Enrique Peña Nieto, who took office in early December. “Peña Nieto has promised to increase spending on security during his government,” said Mr WebbVidal. “At Latin-IQ we think that the drugs-related violence will continue to slowly recede, but it certainly won’t end overnight. Like we’ve seen in Colombia, it can take years before reforms have an impact, and there is a likelihood that drugs cartels could atomise into low-profile gangs.” -----------------------------------------------------------------------Andy Webb-Vidal is CEO of Latin-IQ Corporation, a boutique business intelligence and risk consultancy specialised in Latin America. ------------------------------------------------------------------------

Latin-IQ is recognised as the leading provider of bespoke business intelligence in Latin America. Latin-IQ undertakes a number of services in the region, ranging from corporate, litigation and regulatory investigations to complex reputational due diligence, asset searches, and market entry analyses. Mr Webb-Vidal stated that security is a problem in Mexico, but it is a far less serious issue than might be expected. There’s no doubt that Mexico currently has a negative reputation when it comes to criminality: news about Mexico published abroad is dominated by stories of drug cartel violence and massacres. However, Mr Webb-Vidal noted that the murder rate in Mexico is in fact relatively low by regional standards – well below most Central American countries, and below several South American countries such as Venezuela, Colombia and Brazil. “Furthermore, while organised criminal activity is a major headache for the Mexican government, the murder rate has shown signs of declining in recent months,” he commented. “And there’s another important point to bear in mind: the conflict between rival drug cartels is limited to a few regions of the country, and the real hotspots have been in the

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Mr Webb-Vidal describes the performance of the Mexican economy over the past decade as disappointing, however Latin-IQ think that Mexico is poised to take a step towards realising its potential. He stated that Peña Nieto has proposed an ambitious agenda of reform, and if the reforms are implemented, they are likely to inject a degree of dynamism in the economy. These reforms point to opening up the energy sector to private investment, modernising labour laws, and reforming fiscal policy to give Mexico greater resources to boost investment in infrastructure, and in turn increase economic growth and competitiveness. “At Latin-IQ we’re not expecting these reforms to occur quickly,” said Mr Webb-Vidal. “Indeed, the idea of opening up Mexico’s energy sector to private investment has been a taboo subject since the oil industry was nationalised in the 1930s, so Peña Nieto will have to move deftly to overcome not only ideological and cultural resistance, but also entrenched corporate interests who benefit from the status quo and who will manoeuvre in congress to oppose constitutional reform.” He noted that the prospect of joint ventures between private investors and the state-owned oil company Pemex is still a long way off. However, there are also hopes among investors that the Mexican government will introduce reforms in the regulatory environment which will reduce the power of monopolies and encourage competition in key areas of the economy.

“Overall, we are cautiously optimistic regarding Mexico, we see Peña Nieto, whose term runs for six years, as a capable politician; he has also emphasised accountability of his administration, which is a relatively novel concept at that level in Mexico,” observed Mr Webb-Vidal. “We suspect that in the coming two years there may in fact be a greater chance of meaningful reforms being implemented in Mexico than in Brazil. The Mexican economy has been growing at a faster pace than that of Brazil, its economy is far more open, and one additional factor that makes it very attractive for foreign investors is the fact that average wages in Mexico are now below those in many regions of China.” Mr Webb-Vidal stated that corruption has long been endemic in Mexico, as it is in many other countries in Latin America. He noted that bureaucracy and red tape is extensive, complicating business procedures and of course giving rise to opportunities for corruption. “Influence-peddling is often used to facilitate business transactions with the Mexican government, obtain operational permits or to block competitors’ activities,” he explained. “However, the risk of bribery varies by business sector, with infrastructure, energy and mining among the most vulnerable. There are also variations depending on the state entity being dealt with: Mexican federal agencies have to a certain extent been cleared up in recent years, but state and municipal entities have lagged well behind.” Since becoming a member of the OECD in 1994, Mexico has been required to pursue to organisation’s anti-bribery convention. However, Mr Webb-Vidal highlighted that the OECD has consistently found that Mexico has been slow to implement these requirements, and in general state agencies have been lax when it comes to investigation and prosecution. “That said, important steps towards combatting bribery have been made, and corruption in Mexico is now meant to be regulated by two pieces of legislation, one designed to regulate authorities’ behaviour and the other intended to regulate private entities and individuals, the latter loosely mirroring the US FCPA and the UK Bribery Act,” he concluded.

Company: Latin-IQ Name: Andy Webb-Vidal Email: awv@latin-iq.com Web: www.latin-iq.com Address: 16th Floor, Plaza 2000, 50th Street, Panama City, Panama Telephone: +44 (0) 845 680 8026

ACQUISITION INTERNATIONAL

13/12/2012 17:57:32

SECTOR SPOTLIGHT:

Alternative Energy in Ukraine

ALTERNATIVE ENERGY IN UKRAINE

In November 2012, controversial amendments were made in the legislation relating to the “green” tariff. “The new law introduces a ‘green’ tariff for energy generated from biogas and energy generated by households with small solar panels,” explained Mr Bondar. “On the other hand, the new law lowers the “green” tariffs for solar power stations and makes eligibility for “green” tariff more stringent.” Due to the biogas facilities being able to obtain the “green” tariff starting from 2013, Mr Bondar believes that the generation of power from biogas collected from landfills may have significant potential. In addition to being a ‘clean’ source of electric power, biogas together with biomass is well suited for generation of heat energy, and may be used to substitute expensive imported natural gas that currently remains the principle source for generation of heat energy for households. This provides enhanced capacity to the Ukrainian biogas market. “EBRD readily provides financing to alternative energy projects in Ukraine, if borrowers can show that their generating facilities will be able to qualify for the ‘green’ tariff,” he added.

-----------------------------------------------------------------------Acquisition International speaks to Glib Bondar, Partner at Avellum partners, for his take on the alternative energy sector in Ukraine. ------------------------------------------------------------------------

Mr Bondar concluded with a prediction for alternative energy in Ukraine in 2013: sourced from by-products and wastes of agriculture and forestry.

“Over the last four years the alternative energy industry in Ukraine came from nothing to quite a few successful projects. Aside from rising prices for conventional power such dynamic growth of renewable energy in Ukraine was mainly prompted by fierce regulatory policy of the government, including introduction of ‘green’ (feed-in tariff) for electricity produced from alternative sources,” he commented.

Mr Bondar noted the following recent developments in the sector: • DTEK (Ukraine) is realising an investment project for the construction of two wind parks with combined capacity of 1.2GW. • Foreign companies are joint-venturing with Ukrainian partners for the purpose of Ukrainebased production of components for wind parks. • Activ Solar is realising an investment project for the construction of several solar plants. • Energoinvest (Ukraine) and Novosvit (Ukraine) are running programs for the rehabilitation of small hydroelectric stations. By now each operates over a dozen small hydrogenation facilities. • Agricultural companies (e.g., Avangardco, Ukrainian Dairy Company, etc.) are investing in biogas plants in order to secure their own needs in heat and electricity, as well as to sell the generated energy in Ukraine and abroad.

The principal sources of alternative energy in Ukraine are wind power, solar radiation and hydropower. Although energy harnessed from these sources in 2010 made slightly more than 0% of all energy produced in Ukraine, the government forecasts an increase to 7.8% by 2030. Ukraine also has untapped potential in generation of heat and electric power from biomass and biogas captured from landfills or

He explained that renewable energy is supported by a range of measures in Ukraine. These include: a “green” (feed-in) tariff for renewable energy, tax incentives (being various reliefs from corporate income tax, land tax, VAT, import duties, and surcharge on supplied energy), the possibility to participate in an emission reduction scheme, and targeted state subsidies, etc.

Avellum Partners is a leading Ukrainian law firm specialising in corporate finance and covering arbitration, capital markets, competition, energy, finance, mergers and acquisitions, real estate, restructurings, and tax. According to Mr Bondar, there is visible development in the alternative energy sector in Ukraine.

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“Although development of alternative energy facilities may slow down in 2013 due to recent legislative amendments relating to the ‘green’ tariff, Ukrainebased production of equipment and components for renewable energy may expand quantity- and quality-wise. Investors, who put their Ukrainian biogas projects on hold last year due to the President vetoing provision of incentives to biogas power generation, now are likely to resume their projects or expand existing facilities. In such case quite massive commissioning of biogas plants may be expected in the second half of 2013, since investors will be trying to capitalise on local content requirements being lifted for biogas facilities in 2013.”

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

December 2012 /

13/12/2012 17:57:37

SECTOR SPOTLIGHT:

Double Taxation Agreements - Belgium

DOUBLE TAXATION AGREEMENTS

— Belgium

l Most people are generally familiar with the concept of double taxation. Corporate lawyers and accountants regularly raise the issue when asked by entrepreneurs about choosing the right business entity for a new company (or for an existing company looking to grow and insulate its owners from personal liability). Tax treaties/double taxation agreements prevent double taxation and fiscal evasion, whilst fostering cooperation between the home nation and international tax authorities by enforcing their respective tax laws. Double taxation remains a hot button political issue and new and existing business owners need to be informed as they make critical business decisions regarding incorporation or the creation of some other formal entity. The number of countries which have entered into treaties with each other in order to mitigate the effects of double taxation is on the rise and such treaties may cover anything from inheritance taxes to royalties. The stated goals for entering into a treaty often include reduction of double taxation, eliminating tax evasion, and encouraging cross-border trade efficiency. It is also generally accepted that tax treaties improve certainty for taxpayers and tax authorities in their international dealings. Howard Liebman, a partner at Jones Day, gives Acquisition International a detailed look at Belgium’s double tax treaty network. Belgium is currently going through a “sea change” with regard to its double tax treaty network and negotiating position. On the one hand, Belgium has proven to be a true path-breaker in negotiating treaties with a 0-percent withholding tax on dividends, the most notable case being with Hong Kong. It was basically able to do so because domestic law already provides for this possibility as long as there are adequate information exchange provisions in place with the other jurisdiction. By being the first off the blocks with Hong Kong, Belgium established a leading reputation as a turntable for investments into China via Hong Kong and out of China into Europe. In addition, after many years, Belgium finally signed a new, modern and favourable tax treaty with the United States and is now in the process of drafting

detailed guidance that will be particularly helpful for bilateral investments between those two countries.

up the negotiation, signing and ratification of new treaties will be put in place.

Unfortunately, on the flipside is the fact that with the growing regionalisation of Belgium, there is a concomitant regionalisation of tax matters as well. More specifically, there is a concern in Belgian federal circles that it cannot ratify new income tax treaties because the regional legislatures must also ratify them, leading to significant delays. Indeed, the double taxation agreement between Belgium and China has been held up for over three years for that very reason (thereby making the Hong Kong treaty even more important). As this concern has been heard at the highest levels of government and by all political parties, it is hoped that a solution to speed

In the meantime, Belgium continues to be a very attractive jurisdiction in which to locate a variety of businesses, both for tax reasons and, more importantly, for non-tax reasons (the largest port in Europe, a highly educated and multilingual workforce, an excellent transportation and communications infrastructure, and a central location in Northwest Europe). Jones Day is also particularly well-suited to assist companies in their investments in Belgium. We have a full-service practice which not only focuses on EU law, but also handles transactional (corporate, tax, labour, contract/commercial) matters, litigation and regulatory issues. Jones Day has been in Brussels since 1990 and now numbers 33 lawyers able to draw upon the Firm’s full-service network of over 2,400 lawyers in 35 offices worldwide to provide a seamless global service.

Company: Jones Day Name: Howard M. Liebman Email: hliebman@jonesday.com Web: www.jonesday.com Address: 165 Blvd. Brand Whitlocklaan, 1200 Brussels, Belgium Telephone: +32/2 645 14 11

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ACQUISITION INTERNATIONAL

13/12/2012 17:57:41

SECTOR SPOTLIGHT:

Valuation in M&A: striking the right balance

VALUATION IN M&A

— striking the right balance

l In this ever-changing and somewhat challenging climate, valuing a business can prove difficult and different parties involved in a prospective acquisition may have different ideas of how much a company is worth. In an increasingly global business environment the valuation issues surrounding corporate transactions have become more complex than ever. The purchaser must determine whether the purchase will be beneficial to them. In order to do so, they need to be confident in how much the company being acquired is really worth. Naturally the seller is likely to value the company at as a high as price as possible while the buyer will want to get the lowest possible price they can. Completing a successful transaction requires a sharp focus on the relationship between risk and return, the risk of purchasing an over-priced business and failing to integrate effectively can prove rather costly. Valuation services are essential for acquirers and sellers alike, such experts can prove to be a critical part of the deal team. Wenda Jacamon, Senior Manager at KPMG Luxembourg, gives Acquisition International her expert opinion on valuation.

Coming to an agreeable price is the first stepping stone to a successful deal. Inarguably price is not the only factor. Many elements matter in winning a deal: buyer’s reputation, chemistry between buyer and seller, and proposed commercial terms. However, price remains an important determinant, especially in an auction process where there’s competition among buyers. In general, buyers focus their due diligence on risk identification: from financial risk to labor dispute. Whilst this is undoubtedly essential, I believe that there has to be a balance. From having worked on both sides of M&A, I see that after a thorough due diligence process, buyers who put too much emphasis on risks factor their findings into conservative valuation assumptions and propose unfavorable term sheets. They forget to put premium on strategic value; they forget why they want to buy the business at the first place. Some buyers go to the sellers with their exhaustive lists of their due diligence findings, hoping to get a cheap deal. This can appear aggressive, eliminating all possibilities for further talk.

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The above does not mean buyers should go into a bidding war and lose sight on risks. Maintaining discipline in deal making is vital. Shareholders get value from a merger if synergies derived outweigh its costs, including premium paid. Synergies can be in form of increased revenues, streamlined costs, and entrance into new product lines or geographical markets. This is why forecasted synergies have to be robustly scrutinized and challenged. Of equal importance is the evaluation of possibility to achieve the forecasts. This is why we often stress test all key valuation assumptions. Without insider information, it is near impossible to gauge what value the other party puts on the deal. Offering far too high number makes the buyer look naïve. Shooting far too low leads the talk to collapse. Having a robust and well documented valuation provides a good basis for both parties to work out a compromise. When all valuation assumptions (e.g. growth forecasts or cost of capital) are robustly

thought out and well documented, buyer and seller can sit down together and have a dialogue on what needs to be adjusted and why, which leads to a better chance of successfully closing a deal.

Company: KPMG Luxembourg Name: Wenda Jacamon Email: wenda.jacamon@kpmg.lu Web: www.kpmg.lu Address: 9 allée Scheffer, Luxembourg City, L-2520, Luxembourg Telephone: +352 225151 7378 Mobile: +352 621 87 7378

December 2012 /

13/12/2012 17:57:44

SECTOR SPOTLIGHT:

The Risks of the Banking Industry

THE RISKS OF THE BANKING INDUSTRY

l The global financial crisis of 2008 has woken people up to the risks in the current financial system, particularly in Europe where the current debt crisis continues to cause instability. Many are looking at ways in which banks can become more secure to avoid any future government bailouts of banks deemed too big to fail. Problems linked to bank structure, activities and size have been profoundly negative for the global economy and structural reform is an essential step to putting that right. The Liikanen Group, which was established by the European Commission last year to provide independent advice on structural reforms to make banks safer, has reached a conclusion similar to that of the UK’s Vickers Commission, which last year recommended that banks’ retail operations should be ring fenced from risky trading activities, and the US’s Volcker rule that limits proprietary trading. Other suggestions include paying bonuses in debt, which can be wiped out when a bank fails. The ring fence solution is partly a response to the difficulty facing US regulators, who are struggling to define where restricted proprietary trading ends and legitimate market making begins. Acquisition International discusses the risks of the banking industry with Kalevi Tervanen, a Partner and head of the Transactions and Financing Group and the Middle East and Africa Team of the law firm of Procopé & Hornborg Ltd, Attorneys at Law. “Regulators are currently forcing banks to enhance their definition and management of risks,” he explained. “A lot will depend on the institutions’ ability to adapt to a new risk management paradigm, which will call for more vigilance in recognising and mitigating emerging risks. “Another risk is that of regulatory arbitrage. An adaptation of a tired, but nevertheless true refrain, is that money is global but regulation is national. The schedules and scope of local implementation of the Basel III regime can create arbitrage between jurisdictions.” As a result of the overall increase in the cost of doing business, Mr Tervanen believes that in 2013 the institutions that manage to find the most balanced approach to deleveraging, managing of current risks and mitigating emerging risks will have an edge. “What we are currently witnessing speaks for this assumption, because there is a clear polarisation within banking. Some actors are adopting a ‘back to basics’ approach, where they focus on their core activities, which again creates situations of a low buyer-to-asset ratio that enables expansive actors to acquire at competitive prices,” he concluded. -----------------------------------------------------------------------Kalevi Tervanen is a Partner and head of the Transactions and Financing Group and the Middle East and Africa Team of the law firm of Procopé & Hornborg Ltd, Attorneys at Law. ------------------------------------------------------------------------

Founded in 1918, Procopé & Hornborg is one of Finland’s oldest law firms with a strong history and a reputation for quality and excellence. The firm works with some of Finland’s leading companies as well as major international corporations, assisting them on all aspects of their legal needs. According to Mr Tervanen, Finnish banks have been doing fairly well and are moderately leveraged. He stated that a more acute concern is the dead money that companies are carrying on their balance sheets,

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as 2012 has been a slow year when it comes to M&A transactions and other corporate investment. “This indicates that the relevant actors, including banks, are not responding to the needs of the socalled demand side at these times of volatility,” he commented. “The fact that companies are preferring the ‘slow and certain death’-alternative of not putting money to work suggests that banks are simply not able to make the most of the situation. Apart from the obvious risks of an impending European recession, a possible Chinese one or further unrest in the Middle East, Mr Tervanen stated that the banking industry is facing several risks relating to regulation.

Company: Procopé & Hornborg Ltd, Attorneys at Law Name: Kalevi Tervanen Email: Kalevi.tervanen@procope.fi Web: www.procope.fi Address: PO Box 1077/Keskuskatu 8, 00100 Helsinki Telephone: +358 10 3090 300

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13/12/2012 17:57:48

SECTOR SPOTLIGHT:

Introducing the Loss Adjustor

INTRODUCING THE LOSS ADJUSTOR

l Since we entered the new millennium, the number of high profile insurance claims has increased dramatically; from the threat of terrorism to global warming, the world is now a much more hostile place. This increase has brought about huge change in the insurance industry, particularly in the value we now attach to loss adjusters across all sectors of the insurance industry. Loss adjusting has undergone such transformation that no longer is it carried out by untrained people; it is now a highly skilled role that requires expert understanding of insurance law, policies, claim management and other global systems. Itâ&#x20AC;&#x2122;s a highly sensitive role as in the process of assessing a fair and reasonable claim, the adjustor has to be careful not act for either side, i.e. the insurance company or the claimant. Walid Jishi, Group Chairman and Managing Director of Arab Loss Adjusters International, shares his insight into loss adjusting with Acquisition International.

-----------------------------------------------------------------------Walid Jishi founded Arab Loss Adjusters International in 1981, following 16 years in the insurance industry, as the first native adjusting practice in the MENA region. ------------------------------------------------------------------------

The qualified professional adjuster should be an Alimentary source of knowledge in various and diversified fields of business including, but not limited to, the principles of law, accounting, engineering, social science with emphasis on human behaviour, and indeed knowledge of insurance. The implications that have arisen and can be seen as challenges in the process of assessing a fair and reasonable claim stem from two broad aspects. - Primarily, the extra ordinary warranties and clauses that are being introduced to insurance policies in irrational manner or imposed by some Brokers irrespective of their functionality or otherwise. - The second is the Facultative Reinsurance which brings on board Reinsurers with limited

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resources or deviate from the fair practices which eventually lead to unnecessary delay in cash calls or unfair denial of claims. The recent EU Mediation Directive will, to a certain degree, benefit both Insurers and the insuring Public and reduce the burden of litigation and that would indeed improve the insuring Public perception of the insurance process. I do not think the implementation of a global system is an attainable agenda. The gap between Nations and legal system differences would likely constrain such an effort. However, I favour global guiding rules to pilot and align the directions of both underwriting and claim handling process. I will be optimistic to say that 2013 will bring significant change to the loss adjustment industry. The Industry benefitted from catastrophic losses in various parts of the world in the past and yet, we have witnessed the rise and fall of adjusting empires. Who knows what 2013 will bring about?

The profession of adjusting is a noble profession and entails social responsibility towards the industry and the insuring public. Within this context, the Insurers and Reinsurers should respect and honour the effort of adjusters. Meanwhile, the adjusters should contribute to the breeding of a new generation.

Company: Arab Loss Adjusters Name: Walid Jishi Email: walidjishi@aladubai.ae Web: www.arablossadjusters.com Address: P.O. Box 1970, Dubai - U.A.E Telephone: +9714 2626629

December 2012 /

13/12/2012 17:57:52

SECTOR SPOTLIGHT:

The Importance of Protecting Intellectual Property

THE IMPORTANCE OF PROTECTING INTELLECTUAL PROPERTY l Intellectual property (IP) rights are valuable assets for any business, possibly among the most important it possesses. The IP rights of a business can set them apart from their competitors, form an essential part of their marketing or branding and can often be used to secure loans or sold or licensed providing an important revenue stream. It can be surprising to some how many aspects of the business can be protected, from the company name or logo to designs, inventions and works of creative or intellectual effort. It is of the upmost importance that the senior management of a business understand the importance of their intellectual property and seek the right advice in order to ensure that it is protected. Dr Mohan Dewan, the head of R K DEWAN & CO, gives Acquisition International his expert opinion on the protection of IP.

R K DEWAN & CO was established in 1942 by Raj Kumar Dewan. The firm has completed over 60 years of committed service and presently represents intellectual property-related interests of over 4000 corporate and individual clients. Dr Dewan explained that an IP adviser provides insights to the client as to the strength of his trademark or patent and therefore helps the client in formulating the optimum strategy for the IP. As a result of due diligence and strategic recommendations, the client is able to understand his stand in an IP negotiation.

“It was found that the applications in India and other countries were still pending and some of them were actually opposed,” he commented. “During a validity search, we also found that there were a couple of granted patents in the prior art which could be used to invalidate or oppose the patent applications of the US company. When our client confronted the US company with such information presented in a thoroughly researched and a welldocumented report, the US company agreed to provide a license at 1/5th royalty per piece.”

“Therefore the role of an IP adviser is that of a catalyst in providing the best yield with optimum parameters,” he observed.

Dr Dewan stated that, in lines with requirements of international treaties, India’s government and courts are making headway in leaps and bounds towards harmonising domestic and adopting international IP laws.

For example, one of the firm’s clients wanted to license a technology from a company in the USA and was intending to pay quite a large sum as royalty per piece. The firm advised the client to check the legal status and validity of the patents owned by the company in the US.

“To bring our IP registration process in line with international standards, recently our IPR offices have started providing various facilities online which speeds the whole process. Recent decision taken by courts here have seen due importance being

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given to speeding up the process of deciding matters related to IPR enforcement. All of this provides a more conducive environment to intellectual property creation, protection and enforcement,” he concluded.

Company: R K DEWAN & CO Name: Dr Mohan Dewan Email: dewan@rkdewanmail.com Web: www.rkdewan.com Address: Head Office: 78 Podar Chambers, S A Brelvi Road, Mumbai 400001, MS, INDIA, Pune Office: 1147 B, Mohan Villa, Shivajinagar, Pune 411016 Telephone: +91 22 61775300

ACQUISITION INTERNATIONAL

13/12/2012 17:57:57

SECTOR SPOTLIGHT:

Structuring a Technology Transfer Transaction

STRUCTURING A TECHNOLOGY TRANSFER TRANSACTION -----------------------------------------------------------------------Hili Rashkovan, Adv. is a Partner at Pearl Cohen Zedek Latzer. ------------------------------------------------------------------------

One of the challenges in constructing licensing transactions, in particular technology transfer transactions, is when the rights of third parties are involved and must be taken into consideration. A third party can be, for example, a former employer who retains intellectual property (IP) rights to the technology being transferred, former partners, or a company that owns such IP under commercial and contractual obligations. The main goal of the Buyer is making sure that the IP that is the subject of the transaction is free and clear of all third parties rights and to ensure that no third party, whether one known to the parties or one of whose existence they are not aware, interferes in the transaction. Following are a few examples of licensing problems commonly arise in the course of technology transfer transactions and possible ways to deal with and solve these issues. Ownership of the Transferred Technology When negotiating the transaction on behalf of a Buyer it is critical to identify and receive complete information regarding the IP “chain of title” and Inventors’ current and prior relationship with third parties. For example, relationship with Inventor’s prior employers, being a commercial corporation or an Academic institute must be carefully looked at. Another example is third parties who assisted the Inventor or have been involved with the development of the IP in any way, such at outsourced programmers, consultants, designers and initial partners. In the above first example, the first stage is to audit the obligations between the Inventor and her prior or current employer. Copyright law, patent law and relevant employment laws in most western countries determine that, absent an agreement to the contrary, the work products and technology developed during and in connection with work for the employer or while using the employer’s resources (such as laboratories and computes), are owned by the employer. Some employment agreements and institutions’ IP rules go even beyond this scope defining any invention resulting from the work and even remotely related to the work the property of the employer. Review of these agreements and rules often reveal that the employee had to go through a structured release process and to obtain a written waiver and release from the employer in order to be the sole owner of her invention. Without such express release, uncertainty remains and the chances that the employer will appear sometime in the future (usually at the most inconvenient time for the Buyer, before an exit or a major raise of funds) to claim its share in the IP exist. Accordingly, it is highly recommended to require the Inventors and the Seller (i.e, the corporation owned

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by the Inventors or to which they assigned their inventions) to personally represent and warrant (in addition to the Seller’s representations and warranties) that they were the only inventors and developers of the technology being transferred, that they had developed the technology through their own time and effort, and that they had clear and clean title to the technology, which they could freely assign. In addition, the Seller and the inventors should represent and warrant that they, and any other employees or sub-contractors who had contributed to the development of the technology, had executed appropriate instruments of assignment in favor of the Seller transferring complete right, title and interest to said technology to Seller. These legal steps are taken in order to make sure that the Seller is the sole and exclusive owner of the technology, including all intellectual property rights thereto. Once the chain of technology transfer, the status of the technology, including the IP rights thereto, are “clean” enough to conduct the major assignment between the companies, the Seller undertakes in the technology transfer agreement to irrevocably sell, convey, assign, transfer and relinquish to the Buyer, free from any liens, preemptive rights and encumbrances, all the rights, title and interest in the technology. Contractual Mechanisms Although clear representations and warranties have been provided by the Seller and the Inventors, there is always a risk that something will go wrong. For example, if the representations are, for some reason, untrue and it turned out that the inventions and developments relating to the technology were, in fact, made within the framework of prior employment, it would be the case that the Seller/inventors did not own the technology and, as a result, that the Buyer did not obtain it (although he paid the full purchase price under the agreement) . There are some good mechanisms to handle this problem – “further assurance” (or assistance) “indemnification” and “cap on liability”. “Further assurance” means an explicit obligation of the Inventors (personally) and of the Seller (or other owners of the IP) to take such further actions as may be necessary or desirable to evidence more fully the transfer of ownership of all the technology to the Buyer, for example the execution of powers of attorney, assignments, declarations, affidavits and any other documents necessary to assist Buyer in legal proceedings relating to the technology and the provision of testimony in connection with any proceeding affecting the right, title, or interest of Buyer in the technology. Another mechanism is the indemnification clause. This provision states that the Inventors, personally, and the Seller will, jointly and severally, indemnify

the Buyer and its respective successors, assigns, directors, officers, employees, representatives and agents against and hold them harmless from all damages and claims arising from breach or violation of their representations and warranties. In case the technology transfer agreement caps the Seller’s liability at the purchase price, this cap must not apply to breach of representations and warranties and to third parties claims regarding the technology’s ownership. Conclusion In drafting a Technology Transfer Agreement, it is important first to identify the IP being transferred. IP that comes from problematic sources can be tricky, since a third party might claim in the future that he is the owner of the IP. We have suggested some ways to deal with such problems: identifying the potential IP problems; auditing relevant agreements and laws; conducting a careful, tight chain of transfer among the relevant parties; providing mechanisms to ensure future assistance and full indemnification.

Company: Pearl Cohen Zedek Latzer Name: Hili Rashkovan Email: hilir@pczlaw.com Web: www.pczlaw.com Address: 5 Shenkar Street, P.O. Box 12704, Herzliya 4673339, Israel Telephone: +972 9 9728029 jpeg

December 2012 /

13/12/2012 17:58:01

SECTOR SPOTLIGHT: Doing Business - In ...

DOING BUSINESS

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

in China

-----------------------------------------------------------------------Wei Zhang Partner of Jun He Law Offices (“Jun He”), head of Corporate and M&As Group One, specializing M&As and corporate. ------------------------------------------------------------------------

Jun He is a top Chinese law firm specializing in general commercial practice. Established in April 1989, Jun He’s head office is located in Beijing and currently has eight branch offices in Shanghai, Shenzhen, Dalian, Haikou, Guangzhou, Hong Kong, New York, and Silicon Valley, California, the United States. Thus far, Jun He has over 690 staff, including 151 partners and counsels, 350 associates. The firm’s professionals practice in 14 specialty groups, each focuses on and offers expertise in an area including general corporate, foreign investment, merges and acquisitions, securities, banking and finance, real estate and construction, intellectual property, tax, international trade and competition, outbound investment, infrastructure, energy and natural resources, labor and employment, and dispute resolutions. Commenting on the current business environment in China, Ms Zhang explained that it has improved significantly, however there is still a lot of work to do. In particular, she stated that more restrictions

on foreign investment in industrial sectors have been removed, and local governments are vested with higher authority to approve foreign investment. “However, there are also certain complications worth noting: national security review regime was established last year, anti-trust compliance was strengthened, each of which would help prolong the approval process required for the transactions in which foreign investors would have competition concern and/or which have national security concern, thus enhancing the uncertainty in obtaining the approval required,” she commented. “Further, increase of labour costs have caused many manufacturers to relocate their facilities outside China, even offshore transaction involving a target company having Chinese entities may have to take into consideration the Chinese employees’’ slowdown or ‘work-stop’ for compensation which apparently lacks legal ground but has practical impact on the transaction. Notwithstanding the foregoing, as China remains a market with huge potential to grow, it will continue to attract foreign investors to do M&As.” Ms Zhang noted that the service sector, clean-tech/ energy as well as new energy, new tech, high-end manufacturing, among others, are encouraged by the

-----------------------------------------------------------------------Luis Martinho Lunga is a lawyer at Ope Legis, advogados. ------------------------------------------------------------------------

Mr Lunga has enrolled as a lawyer in the Angolan Bar Association for the last 12 years, giving legal assistance in and out of court. He believes that being a Bar Professional gives him a stronger perspective of legal systems, stronger knowledge of laws and everything related to laws, which might give an advantage over other competitors.

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“According to the PWC’s report early this year, Chinese investment in Europe has been greatly increasing. We expect such increase will continue onwards, especially when the valuation of more target companies is now found to be relatively reasonable, plus Chinese investors have motivation to acquire advanced technology, brand names and cliental bases through M&As,” concluded Ms Zhang.

Company: Jun He Law Offices Name: Wei Zhang Email: zhangw@junhe.com Web: www.junhe.com Address: 22/F China Resources Building, No. 8 Jianguomenbei Ave., Dongcheng District, Beijing 100005, China Telephone: +8610 8519 1308

Commenting on the impact of the Eurozone crisis, Mr Lunga noted that the Angolan economy relies a lot on the oil sector. As Europe, as well as North America, is a main buyer, the impact is obvious. The current key risk factors and obstacles to growth noted by Mr Lunga are the lack respect of laws related to private property, and the short impact of judicial power on business matters due to the shortage of courts, judges, and resources in this particular sector. He stated that a law abiding state and procedure gives confidence that no-one else can give.

Pontus Edenberg / Shutterstock.com

in Angola

government, thus are the sectors where the greatest opportunities lie.

According to Mr Lunga the business environment in Angola is very good, but there are still structural problems and others connected to third world countries. However, he stated that things are getting better and better. He noted that there are opportunities for investors in many fields. However he stated that tourism, hotel restaurant, transportation, education, health, agroindustrial sectors and many others, as well as the traditional sectors of oil, diamonds and other natural resources are the most recommended for private investor.

Discussing the government’s efforts to improve the business environment in Angola, Mr Lunga stated that time will tell. However, he stated that in some fields, related to business affair, the Government has done an acceptable effort to fasten and update the tools for a better business environment. He concluded that the country’s economy will keep going up and up in 2013.

Company: Ope Legis, advogados Name: Luis Martinho Lunga Email: luismartinholunga@hotmail.com Telephone: +244 935 433663

ACQUISITION INTERNATIONAL

13/12/2012 17:58:11

SECTOR SPOTLIGHT: Doing Business - In...

St. Mark’s Church, the Parliament and the Government Building, Zagreb / Croatia

in Croatia

-----------------------------------------------------------------------Don Markušić is in a unique position being a Barrister & Solicitor experienced in two common law jurisdictions and a native English speaker practicing law in Croatia. ------------------------------------------------------------------------

Mr Markušić explained that the business environment in Croatia is tough. Domestic demand is falling, credit activity for the private sector and households is in decline, and businesses are not being helped by an unconstructive external environment. “In addition, the government is attempting to cut the fiscal deficit which has led to an increase in the tax burden. Also, partly in preparation for EU accession and partly as a result of populist policy in the past, a number of administered prices such as electricity, oil fuel heating and natural gas prices have risen, often sharply during 2012, further impacting disposable incomes and enterprises’ working capital positions.” “Trends seen in previous years of declining corporate deposits, deleveraging, falling investment activity, rising unemployment, falling real wages and import demand are still evident. In addition, the slowdown in the Euro zone during 2012 has affected export growth which has slowed. The biggest trend in business is the focus of policy on pushing stateowned enterprises to investment in capital intensive projects, such as electricity plants – the thinking is -----------------------------------------------------------------------Goran Debak is a lawyer and owns his own law office. ------------------------------------------------------------------------

I specialised in representing foreign companies and private persons who are doing business in area around town Trogir (on Dalmatian coast), and mostly the ones who are buying properties in this area and investing in tourism. My advantages are mostly in my usage of English language, a great knowledge of the legal procedure and the most important, I know this area so well that I can always tell and predict what problems may occur in my way to achieve client’s final goal. In last 10 years, most of my clients where and still are foreigners who need legal help involving the property in any way.

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domestic supplier will pick up sub-contracting work which will lead to a recovery in economic activity. “Nonetheless, whether Croatia’s relatively complex approvals processes and financing conditions combine to see a number of these projects progress to realization stage remains uncertain. Privatisation is another area where heading into year-end there has been enough progress to suggest deals may happen in 2013.” According to Mr Markušić, the transport sector holds the most promise, mainly because the government is tendering the motorways network for concession. “It is also seeking a solution for the state-owned freight rail business. The tourism sector always has potential, especially as the government looks to offload remaining state-owned hotel assets and it actively seeking investors in the sector on a number of potentially attractive sites. The energy sector is also interesting and state-owned companies may well be seeking private sector involvement in the future. The government is selling majority stakes in the largest insurance company and the larger of the two remaining state-owned banks as well – these will be completed during 2013. “Another interesting area is that of distressed private companies – while it is difficult to talk of specific sectors, given the relatively high indebtedness of many Croatian corporates/businesses, the high At this moment Croatia has good business potentials but the situation is not the same in all places. How is your business experience going to be in Croatia depends very much on a local politics, local potential in providing support and specially in will of local administration who is providing you a permits you need. Many sectors have a good potential but without doubt, tourism is the best sector to invest into. There lies a great potential, as Croatia coast is still undeveloped and we have increasing numbers of tourists every year from all over the world. Still majority of our bed capacity is in private accommodation so hotels are needed in many areas. Also, everything connected with providing entertainment to tourists are needed since the offer is still very poor in that sector.

cost of capital currently and the weak economic environment which significantly limits profit growth possibilities, private equity capital remains one of the most reliable ways to breathe new life into businesses and fund investment. Though not as pronounced as in Slovenia, the sale of private companies in the future is something to monitor.” Mr. Markusic emphasises that the Law on Investment Promotion and on Improving the Investment Climate which provides favourable tax and other incentives to investors came into force on 10th October 2012 evidencing the Government’s determination to complete its abovementioned goals and its realisation that this can only be achieved through foreign investment in a favourable investment climate.

Don Markusic Solicitor Company: Markusic Solicitor Name: Don Markušić Email: don@markusic-solicitor.hr Address: Gornji Grad, Tituša Brezovačkog 2, 10000 Zagreb, Croatia Telephone: +385 1 485 10 28

Price of the property was corrected in last couple years and it’s at the lowest possibly, so it’s good time for investment, and when Croatia joins EU investments will be even more protected than they are now.

Lawyer Goran Debak Name: Lawyer Goran Debak Email: gdebak@gmail.com Address: Vukovarska 11, 21220 Trogir, Croatia Telephone: +385(0)21 883093

December 2012 /

13/12/2012 17:58:18

SECTOR SPOTLIGHT: Doing Business - In ...

Mr Ionescu expects that services, IT and infrastructure sectors will provide some interesting opportunities in the coming year, considering the increased interest in PPP, as well as the growing pressure to improve the absorption of EU funds.

in Romania

-----------------------------------------------------------------------Radu C. Ionescu is the managing partner of Ionescu și Sava, SCA, a Bucharest based law firm set up in 2005. For the past eight years it has grown into a solid, integrated business consultancy group with four partners and sixteen associates. ------------------------------------------------------------------------

Mr Ionescu explained that the current business environment in Romania is relatively low cost and the work force has a good professionalism. “With Romania having one of Europe’s lowest flat income and profit tax rates of 16%, makes the country a very attractive option for investment, especially in the IT, automotive, oil & gas and industrial production sectors.”

-----------------------------------------------------------------------Hein van Dam is the Partner in Charge at Deloitte Financial Advisory Services. ------------------------------------------------------------------------

Mr van Dam describes the current business environment in Romania as challenging, noting that the country is obviously not immune to the economic difficulties being experienced in the region and Europe in general. “The political instability experienced during this year has brought further unnecessary uncertainty,” he commented. “With elections scheduled for 9th December 2012, we are looking forward to increased political stability in 2013.” He stated that they key pull factors for investors continue to be a relatively large consumer market, rising consumer spending, natural resources, extensive economic reform and restructuring opportunities, underdeveloped infrastructure, educated labour and relative cost competitiveness – more than 70% of Romanian exports are destined for the Eurozone. Discussing emerging trends, Mr van Dam noted that substantial investment is being committed to the oil & gas industry, specifically Black Sea exploration and the energy sector as a whole remains interesting for investors. “In this respect, the renewable energy sector is noteworthy as the relatively generous green certificate

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He noted that the big trend this year was the development of the services industry, both in terms of start-ups, as well as in the increase in quality. “Human resources have also played an important part this year and we have seen important foreignRomanian partnerships in this field. Alternative energy has continued to be the star of new investment, with some large projects being finished this year and we expect it to continue to grow over the coming years.” “We have seen a return to what was most valuable to Romania, in the communist era, but with a fortunate twist: investment in agriculture, both for small producers, as well as for large players. This will also attract investments in the food industry and should have a positive effect in terms of business development.”

“Despite initial predictions, we believe that Romania faced the Euro Crisis better prepared than other EU countries. It is true that Romania was still close to the previously experienced transition-period when the crisis debuted, but it had to face even more challenges than other EU countries. Particularly during the past year, efforts to recover from the financial crisis were also doubled by an ongoing political crisis which has weakened both the trust of the external collaborators of Romania, but also of the business environment. With the upcoming parliamentary elections, there is still hope for the political situation to become more balanced and settled next year, so that the economy can proceed with recovery unhindered by political drama. Romania is still very much exposed to the Greek Crisis, as a large portion of the local banking system is made of Greek banks, but the National Bank has set-up systems to mitigate the potential risks.”

Company: Ionescu si Sava, SCA Name: Radu C. Ionescu Email: radu@ionescusava.ro Web: www.ionescusava.ro Address: No. 24 Paleologu Street, Bucharest, Romania Telephone: +4 021 314 02 54

subsidy system continues to attract investment in wind, solar, biomass and micro-hydro projects,” he explained.

capital as over-reliance on the rest of Europe to fund convergence may not be sustainable.”

“In terms of investments flow, we have seen increased interest from Asia, in particular China, in respect of large infrastructure and energy related opportunities.

Mr van Dam believes that the government should commit to continued restructuring of the public sector through privatisation, private management as well as public private partnerships in infrastructure development and public service delivery.

“International investors are also becoming increasingly interested in Romania’s agricultural and forestry related potential.” The Eurozone crisis has had a significant impact on Romania. The country experienced a dramatic drop in Foreign Direct Investment, which together with the fall in remittances from Romanians abroad constrained the government’s ability to fund budget deficits, ultimately resulting in IMF support arrangements having to be put in place. “The largest banks in the country are subsidiaries of European banking groups. Lending growth has been very slow as banks seek to rebuild their balance sheets,” observed Mr van Dam. “Nevertheless, Romania is an exception in the region, in that lending growth expectations are still positive. “Going forward, the countries of South Eastern Europe will need to be more focused on developing and retaining their respective competitive advantages in order to compete for international

“Other priorities should include increased fiscal predictability, improved and more efficient tax collection, adequate public healthcare funding relative to size of economy, re-orientation of education curricula towards competency based learning,” he concluded.

Company: Deloitte Consultanta Name: Hein van Dam Email: hvandam@deloittece.com Web: www.deloitte.com/ro Address: 4 – 8, Nicolae Titulescu Bld., 2nd floor, Bucharest, District 1, 011141, Romania Telephone: +40 (0)21 2221 661

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13/12/2012 17:58:28

SECTOR SPOTLIGHT: Doing Business - In...

OTHER EXPERTS IN THIS AREA

Monument of Duke Mihailo Obrenovic Belgrade / Serbia

Company: Tomic Stevic Dulic Name: Ljubica Tomic Email: ljubica.tomic@tomic-stevic.co.rs Web: www.tomic-stevic.co.rs Address: Carice Milice 3/II, 11000 Belgrade, Serbia Telephone: +381 (0)11 3285 227

in Serbia

-----------------------------------------------------------------------Stefan Dobrić is the Senior Lawyer in the corporate department of Janković, Popović & Mitić Law Office. ------------------------------------------------------------------------

Mr Dobrić stated that, due to the economic crisis, the most important deficiency in the scope of the Serbian economy advancement progress is the absence of foreign investment. An additional aggravating circumstance is the fact that the period during which the Republic of Serbia is appearing as a market economy, is very short. Only twenty years ago the Serbian market was strictly controlled and strongly corrected by the country. “The current business environment in Serbia is not satisfactory as the financial state of the population is bad, profitability of investments is not assured and the uncertainty in investment is a constant obstacle,” commented Mr Dobrić. “The crucial difficulties for every investor are corruption, rigid bureaucratic system and instable political situation. Those are the main fields in which the government of the Republic of Serbia needs to intervene in order

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to improve its business environment. Probably, the greatest problems are regulatory boundaries and huge bureaucracy – based legislature that are definitely not in favour of investments.” Mr Dobrić explained that the main problem, which the government has been trying to solve for some time, is corruption. A national strategy for the fight against corruption has been adopted with three basic aims: a) the effective implementation of anticorruption legislation; b) prevention, which involves decreasing the opportunities for corruption; and c) raising awareness and public education related to the fight against corruption. “Over the years, Serbia was labeled as an unstable country because of internal political problems,” he said. “These events left consequences, because the market in Serbia was almost completely destroyed. The process of EU integration and eliminating the effects of the financial crisis are key tasks for the Serbian government and Serbian society in following period. In the case of positive resolution of mentioned challenges, there is no doubt that the problem of political instability shall be spontaneously solved.”

Mr Dobrić believes that the main task for the newly established Serbian government is the improvement of the business environment in the country and making the political situation more convenient for foreign investments. “By taking all measures requested by the EU, such as reorganization of the judicial system and reduction of the administrative processes, the Serbian government is trying to attract foreign investors and to provide better conditions for investors that are already in Serbia,” he concluded.

Company: Janković, Popović & Mitić Law Office Name: Stefan Dobrić Email: stefan.dobric@jpm.rs Web: www.jpm.rs Address: Vladimira Popovica 6, Belgrade Telephone: +381112076850

December 2012 /

13/12/2012 17:58:37

SECTOR SPOTLIGHT:

Foreign Direct Investment – in and out of...

FOREIGN DIRECT INVESTMENT

l Foreign direct investment is in great demand; after all it doesn’t only bring capital, but plays a vital role in importing technology, experience and human skills. 2012 has seen a pickup in global levels of FDI, according to the Institute of International Finance, net FDI flows will this year hit around $513-billion and next year, the figure is estimated to reach $536-billion, not too far off the all-time record of $560-billion in 2008. Amidst turbulence in the global investment community, one element has remained constant since the onset of the financial crisis and that is the flow of foreign direct investment from the developed world into emerging markets. Acquisition International examines current FDI activity around the world.

— in and out of Cambodia incentives. Specific activities are also excluded - such as restaurants, casinos, and professional services. According to the United Nations World Investment Report, Cambodia’s FDI in 2011 exceeded expectations. Cambodia has recovered strongly from the global recession, as inbound FDI reached an all-time high of $892 million in 2011. Outbound investment also set a new record at $24 million. Most inbound investment comes from neighboring countries – Malaysia, China, Taiwan, Thailand, Singapore and South Korea. Garment manufacturing, tourism, petroleum, and agriculture attract the most capital. Amongst the wide range of opportunities for investment, Dr Hem highlighted two areas.

-----------------------------------------------------------------------Dr Naryth Hem is the Managing Director of BNG Legal. ------------------------------------------------------------------------

According to Dr Hem, The Royal Government of Cambodia has proved itself to welcoming to foreign capital and dedicated to building a stable investment environment. He stated that, compared to many other countries, there are very few restrictions or impediments to FDI. The Ministry of Commerce and the Council of the Development of Cambodia (CDC) are the institutions responsible for overseeing foreign direct investment and business development in Cambodia. FDI projects which are eligible for business incentives are called Qualified Investment Projects (QIPs) and must be registered with the CDC.

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“First, there are still huge gains to be made in terms of agricultural production and efficiency. Second, the southern coast along the Gulf of Thailand is set for a real tourism boom in the years to come,” he commented. “There are some great developments popping up on gorgeous islands, and with a new airport connecting tourists to regional hubs, I see this area as really taking off.” QIPs can select between a profit-tax holiday or a depreciation allowance. The tax holiday cuts the profit tax from 20% to 0% for a specific number of years. The depreciation allowance can give a generous tax break for investors that need to import large amounts of machinery or other capital goods. In addition, all QIPs are exempted from import duties on construction materials, production equipment, and input materials. With certain exceptions, any goods manufactured by the QIP are also exempted from export taxes. With the recently established ASEAN and ASEAN-China Free Trade Areas, it is possible that traded goods could be totally free of export and import duties. Only projects over a certain size can apply for QIP

Company: BNG Legal Name: Dr Naryth Hem Email: hhn@bnglegal.com Web: www.bnglegal.com Address: No.64, Street 111, Sangkat Boeung Prolit, Khan 7 Makara, Phnom Penh, Cambodia, P.O. Box No. 172 Telephone: +855-23 212 671 / +855-23 212 740

ACQUISITION INTERNATIONAL

13/12/2012 17:58:45

SECTOR SPOTLIGHT:

Foreign Direct Investment – in and out of...

in and out of Nigeria

-----------------------------------------------------------------------Ananya Kaul is Practice Director in the law firm of Kenna Partners, based in Nigeria. The firm is distinguished not only by the depth and scope of its specialised legal advisory services, but also by its expertise in corporate set ups, financing arrangements and restructuring; particularly in the area of foreign direct and private equity investments. ------------------------------------------------------------------------

Nigeria’s approach to foreign direct investment is a blend of the neoclassical and interventionist strategies. The country aims to create an environment and pass laws and policies that are friendly to foreign direct investment.

taken by the government are the establishment of free trade zones with their flexible permits and licences requirements, as well as the introduction of various tax incentives. Nigeria is accessible to foreign investors. They can incorporate new companies easily in a day under the one-day incorporation system operated by the Corporate Affairs Commission. In comparison to Nigeria, Malaysia operates an interventionist, promotional approach to FDI through its investment promotion agency. The Czech Republic on the other hand operates a neoclassical, rule-based approach. Like Nigeria, both countries are noted to be accessible to investors.

Nigeria established the Nigerian Investment Promotion Commission (NIPC) to encourage and promote investment in the Nigerian economy and assist incoming and existing investors by providing support services. One of the ways by which the Commission carries out its functions is promotional activities, exhibition at conferences and meetings in Nigerian missions overseas. Indeed, the government also set out in recent years to encourage foreign direct investment by improving the business climate. Some of the steps

Nigeria is one of the top three recipients of foreign direct investment in Africa. However, as the country has numerous natural resources, as well as large population and market size, it has not enjoyed proportionate FDI. This is attributed partly to inadequate infrastructure and occasional insecurity. Nigeria’s percentage share of Africa’s FDI has fluctuated over the years. In 1990 it was around 24%. It reduced to 8% in 1999 and increased slightly to 11% in 2002. From $724, 700,000 (seven hundred and twenty four million, seven hundred thousand United States dollars) in 2000, Nigeria’s FDI inflow reached $8, 900, 000, 000 (eight billion, nine

in and out of Burundi

market more easily as I would not have limitations in specific areas of knowledge.

-----------------------------------------------------------------------Nitereka Deo is an independent legal adviser based in Burundi. ------------------------------------------------------------------------

I certainly have a large role to play in providing legal defence for my clients, especially as I work independently from any company. I particularly provide legal aid and advice to my clients before the juridical process as I firmly believe that access to a lawyer, in order to exercise a good defence in court, is a basic human right. Finding the right lawyer is also imperative to the outcome of the case, of course, and in order to ensure a fair trial. In Burundi there is no specialisation necessary, which is good as it means I get cases covering a wide range of jurisdictions in the country. However the most frequent cases I see include jurisdiction of the Labour Court and also land disputes. More specialists training would allow me to enter the international

in and out of Cyprus

-----------------------------------------------------------------------CIBA is here to support you and your business - Welcome to Cyprus ------------------------------------------------------------------------

The Cyprus International Businesses Association was established 20 years ago on the initiative of a number of business executives, who had moved their international activities to Cyprus in order to enjoy an interesting package which included the Mediterranean climate, the relaxed atmosphere, the easy immigration policies, high quality legal, accounting, audit and tax services, and the interesting tax regime. By then many international enterprises with foreign shareholders had opened fully fledge offices, without however being able to rely on any specific association to support, promote, safeguard and protect their interests.

ACQUISITION INTERNATIONAL

AI Magazine 1212.indd 41

Burundi’s approach to foreign investment is characterised by its Foreign Direct Investment system. The 2nd Vice President, His Excellency Gervais RUFYIKIRI, illustrated this in his address of 2010 by openly inviting economic operators to the country, and spoke of its many opportunities; such as the repatriation of profits and the creation of the Agency for Investment Promotion. The AIP needs essential staff training in order to promote foreign direct investments as well as possible because that agency is very necessary for investors. Of late, Burundi has certainly made a breakthrough in laws to attract foreign investors. However, it is essential for us to continue to make improvements in order to be fully integrated into the East African Community (EAC). Such integration has not yet come to fruition. Burundi

CIBA is a non-governmental independent association, financed by membership fees. Its activities and initiatives are organised by an Executive Committee of 12 persons. The members of the Executive Committee are volunteers and do not receive any compensation. They are elected by the members at the Annual General Meeting for a term of three years and meet at least once a month. The Executive Committee follows up on a number of issues with the support of the secretariat and a number of sub-committees which include external experts. Ever since its creation, CIBA has gone to great lengths to represent and safeguard the interests of the international businesses, their international shareholders, managers and staff. CIBA is in continuous and close contact with the government authorities and in particular with the Ministry of Finance, The Ministry of Commerce

hundred million United States dollars). This amount translates to over 20% of Africa’s total FDI inflow. Nigeria, South Africa and Ghana attracted up to half of the total FDI inflows into Africa. Between 2010 and 20111, FDI inflow into Africa increased by over $6,000,000,000 and Nigeria had about 20% of the FDI. This incremental rise in FDI is expected to continue, with improvement in security and diversification of the economy.

Company: Kenna Partners Name: Ananya Kaul Email: counsel@kennapartners.com Web: www.kennapartners.com Address: Kenna Place; 8, Ogunyemi Road, Palace Way, Oniru, Victoria Island, Lagos Telephone: +234 1 6282118; +234 1 8445051 ; +234 1 6290733; +234 1 8445052

needs to initiate a macroeconomic improvement policy in the sub region in order to raise the income level for Burundian citizens. To ensure my continued success I intend to continue as I am going, as practice makes perfect! Regionally, word of mouth and recommendation play a large part in attracting business, and also creates confidence for potential clients that your services are right for them.

NITEREKA Déo Name: NITEREKA Déo Email: niterekadeo@gmail.com Address: Bujumbura - Burundi Telephone: +257 79 748 672 or + 257 75 748 672

Industry and Tourism and the Ministry of Interior, who cooperate with and acknowledge CIBA as the association which represents the International Business community in Cyprus.

Association: Cyprus International Businesses Association President: Frixos Savvides Email: ciba@ciba-cy.org Web: www.ciba-cy.org Address: Iris House, 840A John Kennedy Street, Limassol 3106 , Cyprus. P.O. Box 54917 - 3729 Telephone: +357 25 583 400 Fax: +357 25 581 531

December 2012 /

13/12/2012 17:58:50

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

DOING BUSINESS IN 2012 — Forming Companies in... Lebanon

-----------------------------------------------------------------------Rami Smayra is an Attorney at Law at Smayra Law Office. ------------------------------------------------------------------------

Smayra Law office is a law firm specialised in corporate, finance, banking, commercial, real estate and tax law. Since 1964, the firm has provided a wide scope of formation and governance services tailored to each client’s needs and requirements. “Formation must take into account each client’s needs, requirements and future aspirations, as well as relevant corporate governance, corporate finance and tax considerations,” said Mr Smayra.“We therefore build upon our thorough knowledge of the law to provide our clients with tailor-made services. Furthermore, through our breadth of experience in the provision of formation services, we accumulated the tools to overcome potential red tape hurdles.” According to Mr Smayra, setting up companies in Lebanon is simple. It requires at least three persons (individuals and/or legal entities), their identification documents, a minimum capital deposited in a Lebanese bank (the amount depends on the company’s form), a Lebanese domicile, the signature of the company’s bylaws before a Lebanese notary public, the appointment of a Lebanese attorney and auditor, and the registration of the signed bylaws at the Register of Commerce. Mr Smayra explained that Lebanon’s economy revolves around services and commerce. This is reflected in

India

-----------------------------------------------------------------------Neeraj Bhagat is the CEO of Neeraj Bhagat & Co. ------------------------------------------------------------------------

Neeraj Bhagat & Co. based in New Delhi, India, established since 1997 is a team of distinguished chartered accountants, corporate financial advisors, tax consultants and legal luminaries providing a wide range of accounting and financial services to clients in India and abroad. Mr Bhagat explained that companies incorporated or registered in India are governed by the Indian Companies Act 1956. There are legal requirements relating to minimum share capital, minimum number of directors and shareholders. There is no need to appoint a local director to incorporate a company in India and all the directors can be foreign citizens. Foreign companies are allowed to become shareholders in Indian entities and there is no restriction that only individuals can be shareholders. Foreign nationals and companies can incorporate companies in India and hold up to 100% of the equity in the sectors in which 100% FDI is allowed. It generally takes 15 days for the company to be incorporated in India besides the time taken by the client in getting the documents attested from Apostille in their country of residence.

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its regulations and available infrastructure, whereby business is promoted through: low incorporation costs; low company maintenance costs; low taxes; solid legal system; free markets; strong banking sector; banking secrecy; internationally respected central bank/banking regulator. He noted that the growth in the level of formation has been slowed by the local and regional political situation. For the past few years, the most formations are seen in the tourism and hospitality, IT, real estate, construction and projects sectors. “Doing business is simple,” said Mr Smayra. “Given the competition amongst the large number of highly capitalised local banks, credit is easily accessible.”

formalities; increased transparency and continuity in the interpretation and application of tax laws; political stability, and consensus on economic policy. “Thanks to the Lebanese entrepreneurial spirit, solid legal system, strong banks and respected central bank, I expect the incorporation level and foreign investments to grow, despite the local and regional political conjuncture, as happened following other similar periods,” commented Mr Smayra. “I encourage foreign businesses to set up in Lebanon, because its (i) skilled and multilingual human capital, (ii) geographical location and available infrastructure, and (iii) legal, financial and economic model provide the constituents of a solid international business,” he concluded.

Corporate taxes are: S.A.R.L. (limited liability companies) and S.A.L. (joint stock companies): 15% of net profits; offshore companies: yearly flat tax of USD /667/; holding companies: yearly incremental tax with a ceiling of USD /3,333/. Taxes can be paid at banks or through the post. Mr Smayra explained that S.A.L.s, offshore and holding companies have the same incorporation process. S.A.R.L.s require less formalities. The greatest demand is for: S.A.R.L.s for carrying out activities in Lebanon and offshore companies for carrying out activities only outside Lebanon. In order to improve the formation process and the business environment in general, Mr Smayra suggests the reduction of red tape; the computerisation of filing Mr Bhagat noted that the regulations in India are quite liberalised and investor friendly. The country is providing a wide investment base to the foreign companies by liberalising its FDI norms and raising FDI limits in various sectors. The country has emerged as a credible business partner and a preferred investment destination. “Over the past decade the Indian Economy has witnessed a paradigm shift and is on a robust growth trajectory,” commented Mr Bhagat. “India’s economy has strong fundamentals and is host to several eminent global corporate giants that are leaders in their respective fields.” Mr Bhagat attributes this growth to a number of factors. Firstly, there is an unparalleled resource of educated, hard-working, skilled, ambitious and English speaking workers available. That this workforce is also one of the world’s youngest adds to India’s attractiveness as an investment destination. Another factor is the vibrant capital markets and strong financial sectors, along with a large and penetrative network of banks and financial institutions. Mr Bhagat also noted: India’s latest state of the art infrastructure facilities and IT enabled services; its growing middle class with increasing aspirations; the vast untapped market opportunities, the likely increase in the proportion of the population in the

Company: Smayra Law Office Name: Rami Smayra Email: rami.smayra@smayralaw.com Web: www.smayralaw.com Address: Hamra, Makdessi Str., Arab Bank Bldg., Beirut, Lebanon Telephone: +961-1-350771

working age group, and the progressive simplification and rationalisation of tax structures. “Presently, the Indian economy is on a fast track of progress at all levels,” said Mr Bhagat. “There are enormous opportunities to be tapped in India. The market here is good for both top line growth and profitability.” He stated that the major growth drivers in the coming future where immense growth is possible are: IT enabled services; software development; fast moving consumer goods (FMCG) and luxury sectors; back office operations; hospitality; infrastructure and allied industries; insurance; and tourism.

Company: Neeraj Bhagat & Co. Name: Neeraj Bhagat Email: neeraj@neerajbhagat.com Web: www.neerajbhagat.com Address: S-13, St. Soldier Tower, G Block Commercial Complex, Vikas Puri, New Delhi-110018 Telephone: + 91 11 28544939/+ 91 11 28543739

ACQUISITION INTERNATIONAL

13/12/2012 17:58:54

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Austria

-----------------------------------------------------------------------Dr Klaus Oblin, LL.M. is a lawyer at Oblin & Melichar. ------------------------------------------------------------------------

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

Zimbabwe

“This is particularly true when compared with the structure of a joint stock corporation,” he commented. “A supervisory board can be established for a limited liability company. However, except for large limited liability companies (which must exceed certain thresholds), a supervisory board is not required under mandatory law. Thus, the GmbH can, subject to the above-mentioned exception, operate without any worker representatives in the corporate bodies of the company.”

•

Another feature of the limited liability company is that the managing directors must comply with the direct orders of the shareholder. Dr Oblin added that the foundation of a limited liability company is generally not more cumbersome than the registration of an Austrian branch office in the Commercial Register.

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

An estimated time for the establishment of a company is approximately three weeks after receipt of all the required documents. For the purposes of preparing the foundation of a limited liability company, the following information is required: • Desired company name; • Business Address and Corporate Seat of the Company; • Information about the Shareholder(s); • Object of the Business; • Share Capital and Shareholders’ Contributions; • Business Year; • Name, Birth Date, Address and Power of Representation of the Managing Director. After receipt this information, the firm would prepare drafts of the following documents: • Register filing signed by all managing directors • Notarial foundation deed setting up the GmbH

-----------------------------------------------------------------------Phathisile Ncube is a legal practitioner at Mawere & Sibanda Legal Practitioners. ------------------------------------------------------------------------

“The increase recorded in these sectors is largely attributable to the stable political and macroeconomic environment that has persisted since 2009 as a result of the formation of the inclusive government that has created a conducive environment for the business planning and project execution,” she commented.

Founded in 2001, Mawere & Sibanda Legal Practitioners is a full service law firm specialising in corporate law, with its offices in the central business district in Harare, Zimbabwe.

The private limited liability company structure is in the greatest demand in Zimbabwe, in comparison to public companies. Ms. Ncube stated that incorporation of the former is simple and relatively cheap.

Company formation services are provided by M & S Trust Company, an entity wholly owned by the law firm which is overseen by Miss. Daisy Zinyemba an Associate Partner at the firm.

“Private limited companies are favoured because the shareholders or directors control the operations of the company with minimum external supervision outside of the normal corporate governance issues.

Ms. Ncube explained that it is relatively easy to set up a company within Zimbabwe, and that there has been a phenomenal increase in company registrations in the last few years due to self-employment and indigenisation issues.

“A public company on the other hand takes a much longer time and is subject to stricter regulatory control.”

“There is also a market registration increase due to foreign investors engaging in joint ventures with local partners,” she added. This has happened since February 2009. She noted that the sectors seeing the most company formations are the mining and related sectors due to the increased injection of foreign investment from Chinese and Western European countries. There has also been an increase in formations in the telecommunications and service sectors.

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AI Magazine 1212.indd 43

• •

Notarised document on the appointment of the managing director(s) Notarised sample signature sheet Confirmation by the managing directors that all necessary contributions have been/are at their free disposal Bank statement evidencing payment of the company‘s share capital Tax clearance certificate (Powers of attorney of the shareholders issued to the firm for the foundation of the company)

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

that the elections due in 2013 will result in a clear victory by one political party and that the results will not be disputed. “This will result in removal of sanctions and normalisation of the country’s relations with the West and multilateral lenders,” she explained. “We expect massive FDI to go into the restoration of infrastructure and energy which will boost employment and general economic activity.” She noted that the Companies Office is in the process of being fully computerised which should help speed the company formation procedures. “In general we are optimistic that the economy can only get better. We expect an increase in formations due to: the continued stable economic and political environment; fiscal prudence; an improvement in electricity and water supply,” concluded Ms. Ncube

In practice offshore companies are hardly incorporated in Zimbabwe because there is a simpler procedure getting the same result, observed Ms. Ncube. “The main challenge is that the process is slow as it requires Ministerial approval,” she explained. “The solution to this challenge is to register a local company wholly owned by a foreign entity. The results are practically the same.” In the next 12 months, Ms. Ncube expects the political environment in Zimbabwe to normalise. She hopes

Company: Mawere & Sibanda Legal Practitioners Name: Phathisile Ncube Email: pncube@maweresibanda.co.zw Web: www.maweresibanda.co.zw Telephone: + 263 – 4 – 750 627; 750 843; 781 241

December 2012 /

13/12/2012 17:59:00

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in... authentication of legal documents and registration do not pose major problems. The absence of arbitrage and use of only state justice is likely to delay judicial decisions whose implementation is not easy.” Mr Abdoullah noted that Mauritanian law firms are the Société Anonyme (SA) (minimum shareholders: 5; minimum capital: 5 million UM) and the Limited Liability Company (LLC) (minimum of shareholders: 2; minimum capital: 1 million UM). “We can also create G.I.E. (Economic Interest Group) and Cooperatives. Foreign companies may set up subsidiaries or branches in Mauritania,” he added. Commenting on offshore companies, Mr Abdoullah stated that there is no regulation in offshore Mauritania. “It follows that our knowledge, at present, there are no foreign companies offshore. But there is no reason that governments are seized by a request for installation of offshore companies.”

Mauritania

-----------------------------------------------------------------------Maître Mine O. Abdoullah is a Lawyer in the firm “ Etude Maître Mine O. Abdoullah”. ------------------------------------------------------------------------

Etude Maître Mine O. Abdoullah provides consultancy, legal consultancy or legal representation services.

Mr Abdoullah noted that the firm distinguishes itself by allowing its employees to undergo computer training and participation in seminars and study days on issues related to their legal work. He explained that it is relatively easy to set up a business in Mauritania. Incorporation of a business requires: statues; a PV Constitutive General Assembly; a first meeting PV Board; a list of subscribers/United payments, and an attendance of shareholders at the Notary authentication; Registration Services Domains; and Register of Commerce. The average time to complete all these formalities is about a week.

the DRC

-----------------------------------------------------------------------Guillaume Bononge Litobaka is the CEO of Rocat Sprl Royal Customs and Trade. ------------------------------------------------------------------------

Rocat Sprl is one of the best clearing service providers in DRC with a high level quality of service. Mr Bononge explained that clearing services require much O.J.T (on the job training) for new agents, to get fit and serve better customs. “Academic formation alone is not enough in that we organise many trainings, meetings and OJTs to reach the high standard requirements of Rocat,” he commented. “Also, F.E.C (Congolese Federation of Enterprises) helps us in many ways to train our agents in OHADA, new technologies of information (N.T.I) and English speaking and writing.” Commenting on the ease of forming companies in the DRC, Mr Bononge explained that things are getting better because of the requirements and other changes in the business legislation. “To set up a new firm, you have to put up some fight,” he said. “This is to say that it is not easy. Nevertheless,

44 / December 2012 AI Magazine 1212.indd 44

“Growth is a function of investment, continue to improve the legal instruments relating to investment but also provide facilities for investors in taxes for example,” he commented. There has been a growth in formations in Mauritania, and Mr Abdoullah attributes this to relationships with foreign customers wanting to do business in Mauritania or locate their companies in the country. He observed that the banking, business, mining and oil sectors are seeing the most formations. Discussing the ease of doing business in Mauritania, Mr Abdoullah explained that the country has an investments code that is attractive for companies wishing to invest in the country. “Procedures related to authentication formalities necessary for doing business are relatively heavy and slow,” he explained. “This is because there is no single window. The formalities for the

the positive growth is a fact and so we are hopeful for the future. “When it comes to creating a new firm, complying with the country legislation in the matter is a must; have a status elaborated; get a NRC (commercial registration number); get a National ID number; also get a tax number.” Mr Bononge believes that improvements are needed in the regulation in the DRC, but he expects to see more growth in formations in two or three years.

In order to create a better business environment in Mauritania, Mr Abdoullah believes that it is necessary to improve the institutional framework to focus on the training of justice sector actors. He concluded that in 2013, the firm plans to continue the development of junior lawyers and staff of the Cabinet.

Etude Maître Mine O. Abdoullah Company: Etude Maître Mine O. Abdoullah Name: Maître Mine O. Abdoullah Email: cabmine@yahoo.fr Address: Av GA Nasser, BMCI Building No. 203 - BP. 3807 - Nouakchott – Mauritania Telephone: +222.45.25.59.54 - Mobile: +222.46.41.77.02 / +222.22.49.47.70

“A deep informatic application in the clearing circus process is needed to have less and few individual (human) intervention to prevent corruption. “The hope of growth is expected in many jurisdictions, about formations and businesses, but a meticulous follow up about new reforms is needed. “I truly invite anyone to come and fight to implement businesses in DRC because I am expecting more growth here than anywhere else. Africa, DRC are the future of the world in the next years to come,” he concluded.

“I am witnessing some growth concerning my jurisdiction, talking about formations,” he noted. “This is consecutive to the implementation of the Sydonia++ system. “Taxes sector have brought more formation processes and the channels are T.V.A. and Sydonia++.” Mr Bononge stated that the mining sector seems to show more growth than anywhere else. “Adaptation, integration to DRC taxes system are the key challenges to set up new firms or incorporate offshore,” he commented.

Company: Rocat Sprl Royal Customs and Trade Name: Guillaume Bononge Litobaka Email: rocatsprl@gmail.com Address: 1er Niveau Ancienne Galerie Présidentielle Local 1M9, Kinshasa Telephone: +243 999403040

ACQUISITION INTERNATIONAL

13/12/2012 17:59:05

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Haiti

-----------------------------------------------------------------------Ludwig LeBlanc is a Junior Associate and Managing Partner of LeBlanc and Associates Law Firm. ------------------------------------------------------------------------

Cabinet LeBlanc & Associates is a law firm established in 1990. It advises companies in the fields of company law, contract law, and mergers and acquisitions. The firm’s clients include companies in the world, state enterprises, international organisations and individuals. As a law firm, the cardinal point of its work is still defending the interests of the client. However, this advocacy of the customer can result in various ways, both in council, litigation and negotiation. The firm has a strong national and international reputation. It has lawyers who are regularly called as law‘s expert in U.S. courts, in Tallassee, Washington and Florida. The firm represents small businesses, corporate, faith based organizations, NGOs and State Agency such as Trinity Broadcasting Network ,Malteser International Haiti, Smile of a Child, US Agency for International Development (USAID)… Ludwig LeBlanc is an experienced business attorney and has recognised experience in contractual matters, corporate law, corporate finance, mergers and acquisitions, joint ventures and international law.

He organises, manages, and assists the corporate or NGOs in all matters with a precise knowledge of the Law. He also monitors them both during their creation as their development. Commenting on the ease of setting up a company in Haiti, Mr LeBlanc explained that it takes more than 85 days to obtain the registration of a company. This involves drafting the Bylaws of the company, to submit it to a Public Notary who will notarise the documents and submit it to the Commerce Ministry to get the Authorisation to operate.

-----------------------------------------------------------------------Lenche Karpuzovska is Head of communications at EVN Macedonia. ------------------------------------------------------------------------

EVN Macedonia AD is the electricity supply, distribution and production company of Macedonia, jointly owned by the Republic of Macedonia (10%) and EVN AG (90%), a leading, international and publicly listed energy and environmental services company with its headquarter in Lower Austria. On the basis of a state-of-the-art infrastructure, we are offering our more than 720,000 Macedonian customers besides electricity supply also related services. EVN AG started its business operations in April 2006; we are now present in the Macedonian market for more than 6 years. The development of the country in regards to e.g. establishing business procedures, existing banking sector, transportation

ACQUISITION INTERNATIONAL

AI Magazine 1212.indd 45

The company structure in greatest demand is similar to the LLC, called Société Anonyme. In order to improve the formation process and the business environment in general, Mr LeBlanc believes it is necessary to reduce the process to incorporate a company.

Mr LeBlanc stated that the country is now open for business and offers lots of advantages for prospective companies via the investment code for the tourism, small and large industries, and Agriculture. “There has been a growth in creation of companies because of recent government stability, Haiti has a lot to offer in that particular International Crisis. Foreign companies has a lot to gain in every sector, Companies can easily have enormous profits, like MCI International, DIGICEL Communications due to the lack of serious competition. There is a lot of opportunity for foreign investment, now is the time to prospect,” explained Mr LeBlanc. He noted that the construction and tourism sectors are seeing the most attractive sector as Best Western and Marriott are now present in HAITI.

Company: LEBLANC and Associates Law Firm Name: Ludwig LEBLANC Email: maitreleblanc@avocatleblanc.com ; cabinetleblanc@gmail.com Web: www.avocatleblanc.com Address: Complexe Galleria Angle rue Aubran et Lambert , Suite 302, Petionville , HAITI HT 6120 Telephone: +509 37021913 / +178662458133 To obtain a well-grounded overview the “doing business project” was launched, providing objective measures of business regulations and their enforcement across 185 economies at the subnational and regional level. By gathering and analysing comprehensive quantitative data to compare business regulation environments across economies, the report additionally encourages countries to compete towards more efficient regulation. Finally these reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas.

Skopje / Macedonia

Macedonia

Commenting on the ease of doing business in Haiti, Mr LeBlanc explained that it is not easy to access credit facilities for small businesses. However, local corporation taxes are not complicated and are in accordance with international taxes.

In this year’s doing business report, Republic of Macedonia has reached 23. Place in the overall ranking. “Getting electricity”, as indicator for the time and costs related to connection to the EVN Macedonia grid, has contributed to this ranking via improvement of 15. Ranks compared to last year’s doing business report. facilities and infrastructure as well as the cultural opportunities is impressive taking into consideration that the world was hit by an economic and financial crisis. Besides this, the exchange rate between the Euro and the Macedonian Denar remained stable over the past few years, thus enabling the country to become increasingly attractive to foreign investors. In order to encourage investment and provide an attractive setting for business and work, a country must ensure stability and competitive administrative processes in various fields to potential investors. The existence of and compliance with legal and regulatory framework, the transport infrastructure as well as a stable electricity supply are main key determinants of the capacity of regions to attract business investment. Therefore EVN Macedonia together with the governmental institutions has put many efforts to grant stable energy supply to national and international acting companies. Besides a constant energy supply, the time and costs related to the connection procedures with our supply grid is of particular importance for potential investors.

In order to become fully competitive with all other Balkan and EU countries, Macedonia has to continue along the course it has set. As the Macedonian membership in the EU would lead to additional confidence and trust in the stability of the country, we are convinced that a stronger focus on that issue will contribute beneficially to the country’s development.

Company: EVN Macedonia Name: Lenche Karpuzovska Email: lenche.karpuzovska@evn.mk Web: www.evn.mk Address: 11 October, 9 Skopje, Macedonia Telephone: +389 3205 000 / 42286

December 2012 /

13/12/2012 17:59:11

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Kuwait

-----------------------------------------------------------------------Nada F. A. Al-Fahad is the Vice President of GEC DAR, Kuwait. ------------------------------------------------------------------------

According to the World Bank Guide for doing business, which GEC DAR has participated in for 2011 and 2012, Kuwait rank has moved up to 67 in 2012 compared to 71 in 2011, in terms of the ease of doing business. This makes Kuwait rank seventh in the Arab World. “This shows that the efforts are made to make setting up a business easier and to make the regulations and procedures shorter and clearer,” said Ms Al-Fahad. She explained that, legally, a business license is obligatory to conduct any business in Kuwait. Licenses are classified by business activity like general trading, contracting, construction, consultancy, and industrial licenses, all issued by the Ministry of Commerce & Industry or Relevant Ministry. Business licenses are issued only to Kuwaiti nationals or to Kuwaiti companies and in some cases they can be issued to GCC nationals and companies. Ms Al-Fahad noted that one of the main things that help many businesses in Kuwait to grow is the availability of a good grading system for some businesses.

“Some licenses are graded based on the size and qualification of that company,” she commented. “For example, there are four classifications for contracting companies based on the size of the company and the availability of workmanship and construction equipment.” “This gives a good chance for competition and allows companies of all sizes to focus on their continual growth and development.” According to Ms Al-Fahad, the overall market in Kuwait has been stable for the past year, with no significant growth except for some small businesses. She noted that the retail, wholesale and restaurant sectors have seen the most formations.

-----------------------------------------------------------------------Gerard David is a Partner of SJMS Associates, an independent correspondence firm to Deloitte Touche Tohmatsu. ------------------------------------------------------------------------

My core area of specialization revolves around advisory on the regulatory and legal framework in setting up of Foreign Direct Investment (FDI) and business entities in Sri Lanka whilst ensuring a smooth commercial operation of such entities in Sri Lanka. The granting of approval for setting up companies in Sri Lanka vests upon both the Board of Investments of Sri Lanka (BOI) and the Registrar General of Companies (ROC) and the proposed activities of such companies are governed by the Exchange Control Regulations of the country. The country as a whole is well and truly poised towards the promotion of foreign investments into the country. As a result of the efforts so taken in this aspect, in the “Doing Business 2013” prepared by the World Bank and it’s private sector funding arm International Finance

46 / December 2012 AI Magazine 1212.indd 46

“This will ensure a better and easier way of setting up a business and obtaining its licenses and permits.” “We are expecting that by next year and after the parliament elections in Kuwait to observe new projects, business opportunities, and tenders from various ministries,” she concluded.

Commenting on the ease of doing business, she explained that the necessary procedures in Kuwait are quite lengthy, and it may take several weeks or months to complete. “Generally Kuwaiti citizens do not pay individual income tax, however, an income tax is levied on a foreign corporate body conducting commercial activities in Kuwait,” she added Discussing the incorporation process for different sized companies, Ms Al-Fahad explained that, depending on the type of business, the procedures differ starting from the Relevant Ministry that issues the license, the required documentation, and the time required to issue the license.

Colombo / Sri-Lanka

Sri Lanka

In order to improve the formation process, and the business environment in general, she believes that it is necessary to ease the processes and procedures needed to form a business in Kuwait, and also to make all the needed information available online and allow for online submittal and follow up for forming a business.

Corporation (IFC), ranks Sri Lanka at 81 out of 185 countries which amounts to a 15 notch improvement from the 2012 ranking at 96. The BOI offers a wide variety of incentives/concessions targeted at FDIs, small, medium and large scale investments as disclosed in the web-link http://www.investsrilanka. com/welcome_to_boi/info_for_local_investors. html. In addition to this all foreign investments are protected by the Island nation’s constitution and provisions of any agreements entered into with the BOI remains unchallenged irrespective of any regime change. Since the ending of a three decade old civil strife, Sri Lanka under its present government had taken significant steps towards overall development with special emphasis on infrastructure development and tourism. Sri Lanka had always been blessed with a wide array of tourist attractions at close proximity, giving it an insurmountable competitive advantage over other neighboring countries. The already presence of many renowned giants in the hospitality industry such as Hong Kong based Shangri-La Hotel Group, United States based Sheraton Leisure Group and Thailand’s Minor Hotel Group validates the identified future potential in this sector.

Company: GEC DAR, Gulf Engineer’s Consultants Name: Nada F. A. Al-Fahad Email: info@gecdar.com Web: www.gecdar.com Address: P.O. Box 2796 Safat, 13620, Kuwait Telephone: +965 22267313/4/5/6

The ROC and the Labour Department have already embarked on a project to venture towards automated filing and in time to come once fully functional will further simplify the current corporate registration process. As a result in the “Doing Business 2013” under the “starting a business” category Sri Lanka had achieved a ranking of 33 from previous year’s position of 71. In general it takes five days to get a company registered at the ROC. The government allows the registration of Overseas Companies for both commercial as well as non-commercial purposes and readily identifies such companies as an extended operation of the respective foreign parent. By 2008 Sri Lanka had 235 listed companies which had increased to 287 by October 2012, irrespective of the financial crisis prevalent during that period. Project funding for investors is simple and straight forward as a result of the presence of renowned foreign banks such as Hong Kong and Shanghai Banking Corporation, Standard Chartered Bank, Citibank, Deutsche Bank, State Bank of India, ICICI Bank, Habib Bank to name a few. Country’s FDI inflows had improved to USD 1.07 Billion in 2011 and the present expectation is for same to be USD 1.75 Billion by the end of 2012. The recent relaxation of foreign exchange control regulations has enabled Sri Lankans to invest in the equity of foreign companies and sovereign bonds and make payments in terms of setting up businesses out of the country.

Company: SJMS Associates Name: Gerard David Email: david_sjms@sltnet.lk Web: www.sjmsassociates.lk Address: No.2 Castle Lane, Colombo 4, Sri Lanka Telephone: +94 (11) 5444419

ACQUISITION INTERNATIONAL

13/12/2012 17:59:17

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

“The following documents must always accompany an application for registration of a new company: the Bylaws (Bylaws of the parent company if it’s a branch), name of the manager/ legal representative, its location, the jobs to be created, the list of equipments to be purchased, the foreign participation if any, the investment and financing plans.

Tunis / Tunisia

“Following the “Jasmine Revolution” of 2011 Tunisian economy decreased due to unfavourable domestic instability and difficulties have persisted in 2012 causing significant decrease of investments. However the Government continued to implement reforms in order to improve the local company’s capacity to invest.

Tunisia

-----------------------------------------------------------------------Adly Bellagha & Associates Law Firm is led by Adly Bellagha and is a leading Tunisian law firm established in various fields of work. ------------------------------------------------------------------------

Mr Bellagha explained that Tunisia’s economic policy has been based on supporting investment and reinforcing production and exports for a number of years. This action is part of the country’s policy for increasing the competitiveness of local products and the opening up of the country to global free exchange.

a business is the exception whatsoever,” he observed. “The Investment Code grants advantages and incentives which consist of a total or partial exemption from customs duties and freedom from taxes on profits derived from exported products. Dividends are not taxed in Tunisia “Foreign Investors are permitted to hold shares in Tunisian companies, operating in industry, energy, mining and tourism, without restriction and may, at any time, transfer the profits derived from the invested cap ital, including its increase in value and in the currency of the initial investment.

“New Laws have been enacted in several sectors of the economy, and approval or authorisation to start

According to Mr Bellagha, the project implementation procedure is simple and fast in Tunisia. The time for completion is roughly one week.

Nigeria

process typically takes between 2 to3 weeks. The CAC has recently introduced a 24 hour incorporation service. Thus the entire incorporation process can be completed in about four days.

-----------------------------------------------------------------------Kenechi Ezezika is a member of Ikeyi & Arifayan. ------------------------------------------------------------------------

Ikeyi & Arifayan is a full service business law firm. We focus on helping our clients attain their business needs, while minimising costs and meeting their contractual and regulatory obligations. In relation to formation services, we provide not only incorporation services but also pre-incorporation advice and support as well as assistance with postincorporation registrations and approvals. We pride ourselves in completing the incorporation process within the least time possible. We also pre-empt and proactively resolve any queries by the Corporate Affairs Commission (“CAC”). The Companies and Allied Matters Act (“CAMA”) stipulates that no foreign company may carry on business in Nigeria unless it incorporates a local subsidiary for that purpose. Foreign companies/ investors typically adopt the private limited liability company as their business vehicle. The incorporation process is fairly straight forward. The key requirements are: proposed name; authorised share capital; a minimum of two shareholders; a minimum of 2 directors; a registered address; and a company secretary. Upon approval and reservation of the proposed name at the CAC, the incorporation documents and statutory forms are prepared; relevant stamp duty is paid; then the documents are submitted to the CAC for incorporation. The entire

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The Nigerian Investment Promotion Commission (“NIPC”) Act requires Nigerian companies with foreign participation to register with the NIPC. The Act guarantees foreign investors the unconditional transferability of funds (both capital and earnings) and also prohibits the expropriation of foreign-owned companies. Furthermore, the federal government has through other laws and regulations provided incentives and reliefs for foreign investments in Nigeria. These include grant of pioneer (taxexemption) status, relief on foreign loans, favourable capital/investment allowance, investment tax credit/ relief, relief from double taxation, and export related incentives. Nigeria has witnessed a growth in formation levels over the years, in particular in the oil and gas, telecommunications, electricity and services industries. This growth may be attributable to constructive regulations and policies including the liberalization and deregulation of the exchange control regime, reduction of items on the import prohibition list, etc. The government also embarked on a massive privatisation exercise which has spurred investment and formation activities in several sectors of the economy. Nigeria’s current industrial policy is aimed at attracting foreign direct investment (“FDI”). FDI in Nigeria has over the years witnessed significant growth – from about $1.2 billion in 2002 to about $8.9 billion in 2011; with Nigeria recording over 20% of the total FDI to Africa. We expect more formation activities in the electricity

“Sectors seeing the most formation growth include those with higher added value such as services and electrics and automotives industries remain the largest growing sectors, as well as green energy. This is a significant change as the country was mainly known for tourism, electronic and textile.”

Adly Bellagha & Associates Company: Adly Bellagha & Associates Name: Adly Bellagha Email: a.bellagha@Gnet.tn Address: 126 rue Radhia Haddad, Tunis 1000, Tunisia Telephone: + 216 71 327 122 / 71 328 625 / 71329 117 sector in the near term, in line with the impending full deregulation of the sector. Also, the enactment of an investor-friendly Petroleum Industry Act would likely generate more FDI and formation activities in the oil and gas sector. The corporate tax rate in Nigeria is 30%, with an additional 2% levied as education tax. Access to banking facilities is relatively easy although interest rates are notoriously high. Nigeria has historically not been the easiest place to do business;, this has largely been due to poor infrastructure, security challenges, multiple taxation, bureaucratic bottlenecks and corrupt practices. These issues are being tackled and considerable progress has been made in recent times. There is still a lot of work to do in making Nigeria one of the top investment destinations in the world. With regards to the incorporation process, the establishment of a simplified, automated, and largely web-based system would greatly aid prospective investors.

Company: Ikeyi & Arifayan Name: Kenechi Ezezika Email: kezezika@ikeyiarifayan.com Web: www.ikeyiarifayan.com Address: 1st floor, 21 Boyle Street, Onikan, Lagos Telephone: +234 1 461 4946

December 2012 /

13/12/2012 17:59:22

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Sierra Leone -----------------------------------------------------------------------Corneleius Max-Williams is the Managing Director and CEO of Destiny Shipping Agencies Ltd. ------------------------------------------------------------------------

Destiny Shipping Agencies Ltd is a shipping company designed to act as vessels’ agents for vessels calling in Sierra Leone. In its business as a shipping agent, the company can represent either of the following parties: Owners – Port Agent, Protecting Agent; Charterers Agents & Receivers’ Agent. “Basically, we are Port’s Agent acting on behalf of either the Owners or the Charterers or Receivers,” explained Mr Max-Williams. “We can handle Tampers, Liners, Bulkers and Tankers. The Shipping Industry in our domain. Shipping is in our Nature.” Destiny Shipping Agencies Lt can also handle project cargoes from ship to door. The company can also handle consolidated containers, unstuffed into port shed and elsewhere. It also acts as customs Brokers for both Sea Freight and Air Freight. Mr Max-Williams noted that the government is an open one where all are given a free and fair treatment. This has created a level playing field for all to play, and, according to Mr Max-Williams, “whosoever plays well will win”.

Kathmandu / Nepal Dmitry Berkut / Shutterstock.com

There has been a growth witnessed in business formation in Sierra Leone. The economy is growing, and the president and his government are committed to growth and expansion. Mr Max-Williams added that with the birth of the mineral mines it has become more lucrative for even the locals to come into business. “We have seen growth in the service sector,” he observed. “It was not so in the past but with the opening of the iron ore, bauxite and rutile, we see businesses to do with providing services to work alongside the mining companies being set up – logistic companies, transport, shipping and custom brokerage all being set up. “Nothing in business is easy. One has to work hard to succeed. However, the atmosphere is very good and this means more and more businesses are being formed. One area that has developed and opened is the banks. Access to banks now is far easier than it was before. This makes credit more accessible. The NRA has also done a great job in ensuring that local corporate taxes are paid.” Mr Max-Williams stated that they key challenge to incorporating offshore and foreign companies is finance, thereby size. He has witnessed companies from abroad coming in and opening their own business in Sierra Leone. “This is very common for example in the shipping industry with shipping lines like Maersk; CMA-CGM/ Delmas and MSC opening Sierra Leone branches instead of partnering with local shipping agencies.” • • •

Representative Service for foreign investment. IP registration & maintenance ADR(Arbitration/Mediation)

Mr Niraula explained that setting up a company in Nepal is not difficult, but FDI processes need to fulfil some procedural formalities. Company registration under the name of a Nepalese citizen is easy and will be completed within three days. However, company registration under the name of a foreign company or individual may take some time. Firstly the FDI process and approval need to be completed then a company can register under the name of foreigners. Nepal has all required sets of laws for company incorporation. The first is the Company Act 2006, which is a standard law having basic fundamentals of corporate governance.

Nepal -----------------------------------------------------------------------Matrika Niraula is a Lawyer/Arbitrator/Mediator/Corporate Law Consultant in NIRAULA LAW CHAMBER & CO. ------------------------------------------------------------------------

NIRAULA LAW CHAMBER & CO is a wellestablished and leading law firm in Nepal. The firm has been rendering every corporate and property solution in the following services: • Company designing, registration and maintenance • Foreign Direct Investment FDI Processing • Company Registration with FDI • Banking, Finance and Economic legal service • Contract • Infrastructural & Development legal service • Real Estate & Housing legal service • Corporate Law, Corporate Governance, CSR consultant • Property and Civil Rights legal service • Family and matrimonial Legal Service

48 / December 2012 AI Magazine 1212.indd 48

“Likewise the Contract Act 2000, Arbitration Act 1999 and other acts are guiding the Nepalese corporate spectrum in Nepal,” commented Mr Niraula. “As per the prescribed legal provision of Nepal business growth is going well.” He explained that a quantitative growth in company formations is quite satisfactory, but he believes that Nepal needs to pursue a growth in quality. “Incorporation itself is not a real growth of economy but we have to pursue for the quality like Unilever, Standard Chartered, Chilime Hydropower and so on,” he added. Commenting on the sectors seeing the most formations, Mr Niraula noted that Nepal is the second richest country in Hydro Resources. “Nepal has fascinating running rivers from North (Tibet) to South (India) capable of generating at least 84,000 MW of hydropower easily,” he commented. “But not only Nepal, this region of South East Asia is facing a dearth of power supply. So Nepal is wishing to form a Hydro Power company for massive power

To improve the formation process and business environment, Mr Max-Williams stated that policies are needed to enable the Sierra Leonean Companies in some of the viable sectors to grow. “We need politicians to take their hands off and allow the market forces to work out without government interference. “With the new government in place and with the peace that has been achieved, we expect that the prospect going on for oil will be commercially viable and that the mining industry will boom within the next 12 months. With that in place, doing business in Sierra Leone will greatly improve with the agenda for prosperity,” he concluded.

Company: Destiny Shipping Agencies Ltd Name: Corneleius Max-Williams Email: max.williams@dsa-sl.com Web: www.destinyshipping-sl.com Address: Ritcorp Building, 211 Fourah Bay Road, Cline Town, Freetown, Sierra Leone, West Africa Telephone: +232 76 602813

generation, but it is being difficult to meet up the expectation.” According to Mr Niraula, doing business in Nepal is not difficult. He noted that banks are quite positive for credit services and the tax system is favourable. “But big infrastructure projects can face a little bit of a shortage of capital in the domestic banking jurisdiction,” he added. “In such a situation big projects may need to knock on the door of international financing institutions.” Discussing how the formation process and business environment in Nepal could be improved, Mr Niraula stated that substantial corporatisation in a country is the backbone of a national economy. “Social and economic evils like poverty and unemployment can be a washoff from FDI in nationally prioritised sectors, so a special focus needs to be given for business investment.” Mr Niraula concluded with a prediction that company formations in Nepal will double in the next 12 months.

NLC & Co Company: NIRAULA LAW CHAMBER & CO Name: Matrika Niraula Email: niraulamatrika@gmail.com Web: www.corporatelawyer.com.np Address: House No. 163, Pragatimarg-2, Hanumanthan Anamnagar Kathmandu-32, Nepal. Telephone: +977 14252246 (o) +977 9851052246 (cell)

ACQUISITION INTERNATIONAL

13/12/2012 17:59:28

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Malta

-----------------------------------------------------------------------Dr David Tonna is a Partner and CEO of Mamo TCV Advocates. ------------------------------------------------------------------------

Dr Tonna explained that the setting up of a company in Malta generally poses little complications provided a number of legal requirements are complied with. “Naturally, the legal requirements applicable will be determined and will vary depending upon the type of corporate structure being set up, for instance the company may be set up as a private company or as a public one,” he commented. A private company may be set up as a private exempt company. A company, whether private or public, may be set up as an investment company with variable share capital (SICAV). Alternatively, a public company may be set up as an investment company with fixed share capital (INVCO). “The latter two types of corporate structures are the most common vehicle utilised in Malta for the formation and registration of collective investment schemes,” observed Dr Tonna. “The requirements necessary for the incorporation and registration of a SICAV or INVCO-type structure will vary in some respects from the formalities prescribed for the registration of standard private or public companies. Similarly, the setting up of a trustee company under

the Trust and Trustees Act (TTA) will entail the observance of a set of specific legal requirements designed for this particular corporate vehicle.” Discussing improvements to the formations process, Dr Tonna noted that a bill entitled the ‘Various Financial Services Laws (Amendment) Act 2012’ is currently being debated before the Maltese parliament. If enacted, the act would bring a number of changes to the formation process, most notably to the setting up of the private exempt company. If enacted, it would eliminate restrictions placed on the eligibility criteria for corporate shareholders in such a company. “The amendments would pave the way for corporate shareholders within the context of a private exempt company,” said Dr Tonna. “At the time of this article, the bill has undergone a First Reading, however, the legislative process has ground to a halt. Consequently, this bill is still some way off from promulgation. Given that the current legislature is nearing the end of its term, it remains unclear whether this bill will be brought to fruition in the near future.” Dr Tonna stated that, from a practical viewpoint, emphasis has always been on rendering the formation process more expedient, cost-effective and less cumbersome. “The Maltese Registrar of Companies has implemented a number of initiatives aimed at facilitating a smooth and less time-consuming mode

-----------------------------------------------------------------------Ali Al-Hebshi is the Principal at Advocacy and Legal Consultations Office (ALCO). ------------------------------------------------------------------------

Mr Al-Hebshi stated that the ease of formation and the legal requirements in Yemen depend on the types of companies. For example, setting up a JointLiability Partnership or Partnership Limited By Shares require only the signature of their setters or whom they authorise to do so before the supervisor of companies or the authentication section in court. However, as to setting up a L.L.C., setters are firstly required to deposit their full shares of the capital to a local bank upon opening an account in the company’s name – under establishment – and then obtaining a certificate from the bank that certifies such a deposit of all shareholders are made. This certificate has further to be attached in addition to the Incorporation Contract and Articles of Association with the Application of License of the company to the supervisor. The supervisor will review the formation

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“Despite the dire economic situations currently plaguing several Euro-zone economies, Malta has managed to weather this financial storm remarkably well. All indications are that the corporate and financial sector will go from strength to strength. Provided that Malta continues to offer attractive incentives to foreign investors, harnessed with the right level of regulation, one would expect company formations to increase in volume across the whole corporate spectrum,” he concluded.

Company: Mamo TCV Advocates Name: Dr David Tonna Email: david.tonna@mamotcv.com Web: www.mamtcv.com Address: Palazzo Pietro Stiges, 103, Straight Street, Valetta, VLT1436, Malta Telephone: +356 21 231 345 / 21 232 271

“Based on the rules regulating the Fonds de Commerce (Business Assets), the contract of security of business assets must be registered in the Commercial Registry for declaration purposes,” he explained. “Security of Business Assets brings priority over other creditor claims that were not duly registered at the Commercial Registry, provided that Priority of Claims must be clearly stated in the Mortgage Contract of Fonds de Commerce. However, such priority does not include state taxes because of its absolute exceptional priority over any other creditor claims based on the Income Tax law.”

Sana’a Old Town / Yemen

Yemen

of registration – namely the digital registration of companies. The ROC online system allows for the filing and signing electronically of a number of key documents particularly the memorandum of associations, company’s annual returns, share transfer forms etc.

documents and will have the right to state comments on some of the articles, suggest any amendments on them and discuss that with the person authorised by the company setters to represent them in the formation process. “In any case, formation of companies is deemed to be easy, particularly after the amendments made to the law regulating companies in Yemen (Law No.22 for the year 1997 along with its amendments,” commented Mr Al-Hebshi. The trade sector is seeing the most formations in Yemen. In recent years, there have been changes in the direction of the investment sector, particularly Oil and Gas, as well as the Services sector, including Transportation and oil field services, and the Contracting sector. Discussing the ease of doing business, Mr Al-Hebshi noted that both individuals and companies can grant a security in movable property. Securing a loan may take place by keeping both the ownership and possession of the collateral, provided the subject of security is solely represented in Fonds de Commerce (Business Assets).

Commenting on how the formations process could be improved, Mr Al-Hebshi stated that decision makers must be willing to attain such improvement that could be reflected in current legislations. Also, joining the WTO might help to attain this improvement. “Taking into account the expectation to obtain serious economic support to infrastructural inhabitation and the direction of investments in Yemen, I think the next 12 months will witness improvements in the formation process, particularly in establishing contracting and investment companies,” he concluded.

Company: Advocacy and Legal Consultations Office (ALCO) Name: Ali Al-Hebshi Email: ali@alco-lawyers.org Web: www.alco-lawyers.org Address: Al-Mutahar Building, United Nations Street, Sana’a, Republic of Yemen Telephone: +967 (1) 206814

December 2012 /

13/12/2012 17:59:33

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in... Ms Ongo noted that Gabon has recently created two Special Economic Zones (SEZ) to attract foreign investment and encourage local processing of raw materials by law: Nkok, inaugurated in September 2011 about 30 kilometres east of Libreville and covering 1,100 hectares, is primarily for wood processing. The second project is under construction since June 2012 across an area of 1,500 hectares north of Port-Gentil, will host a fertilizer plant. Both projects which offer tax incentives like tax holidays are part of the country’s ambitious program of “emerging Gabon by 2025”. “In the aforementioned SEZ, through special incentives, the Gabonese government is hoping to attract US$1.1 billion worth of investments annually into the SEZ,” added Ms Ongo. “Companies which establish themselves in Nkok will benefit from various fiscal incentives including tax exemptions on profits for a decade. After the 10 years have lapsed, companies will pay a flat rate of 10%.” Ms Ongo stated that Gabon has witnessed a growth in formation levels, and she attributes this to a raft of reforms that have been implemented with a view to enhancing the business climate to attract investment. “Most of the foreign investors really do believe that Gabon is the new place to be because of various business opportunities that exist,” she observed.

Gabon

-----------------------------------------------------------------------Marie Josée Ongo is the Managing Director of Business Consulting Gabon, a Libreville based legal and tax consultancy firm. ------------------------------------------------------------------------

Business Consulting Gabon provides a full range of services and advisory services in the following matters: Corporate Secretarial activities (incorporation of companies); Labour Law/Social Security; Legal; Tax: Management activities (signing of documents on behalf of clients to some extent...); custody of assets (holding of share certificates); and expatriate employment regulation. Ms Ongo noted that the firm has strong references in terms of company formations, and is able to create companies in a very short time thanks to the strong relationships it has developed with all the relevant administrations and offices dealing with the matter.

Commenting on the ease of forming companies in Gabon, Ms Ongo stated that it may not be straightforward, but the firm usually takes care of all the processes, from the drafting to the submission of the deeds to the relevant authority. The client’s obligation is to provide the requested information and documentation. The main documents and information requested for the formation of a PLC are: • • • • •

Company’s name Object clause Share capital amount Name of the company’s shareholders and allotment of shares per shareholder Name of the statutory auditors

50 / December 2012 AI Magazine 1212.indd 50

Ms Ongo believes that Gabon entered a new era in 2009. The sectors seeing the most formations over the last three years are raw materials (the timber industry, mining) and Consultancy services. The private limited company (SARL –“Societe A ResponsabiliteLimitee”) is the structure in the greatest demand. • • •

Situation of company’s registered office Copy of the subscription contract to the National power company (SEEG) and last invoice; Copy of company’s lease agreement.

For the above last 2 items, the firm may provide the necessary documents in order to speed up the incorporation process. • • • •

Name of the directors, along with a copy of their ID stating their date and place of birth, address and if possible the profession; Name of the chairman of the board, along with a copy of his ID stating his date and place of birth, address and if possible the profession. Name of the Managing Director along with his ID stating his date and place of birth, address and if possible the profession; The Chairman and the Managing director have also to provide two original criminal records still valid.

She stated that it used to be hard to do business in Gabon, and it wasn’t straightforward for a SME to have access to banking and credit facilities. “The situation is improving, but remains tough. But in 2010, the numerous projects launched by the authority include support to SMEs.” In order to improve the formation process and business environment in Gabon, Ms Ongo stated that it is necessary for the country’s “one-stop” office dedicated to foreign investors to become even more efficient, as to date there are still delays in incorporating companies. “Gabon is the place to do business in Central Africa. I believe our ‘Emerging Gabon’ ambitious program is genuine and does work. We have a lot of investors coming around and we have a very ambitious plan to cause the country to become an emerging country within 10 to 15 years,” she concluded.

Ms Ongo believes that the regulation in Gabon benefits business growth in many ways. As the competition to attract investment increases in Africa, with the continent in full growth, the government has taken several steps to improve the business environment and enhance Gabon’s appeal among investors. “For instance the Agency dealing with the formation of companies has been restructured, the objectives being to put in place an efficient ‘one-stop’ office dedicated to foreign investors and to reduce the length of time it takes to open up a business,” she explained. “The Chamber of Commerce and Industry has also been restructured and transformed into an effective organisation to service the private sector. It acts as an information portal, able to provide useful reliable facts about the Gabon Economy and put investors in touch with Gabonese businesses.”

Company: Business Consulting Gabon Name: Marie Josée ONGO Email: marie-jose.ongo@businessconsulting-gabon.com Web: www.businessconsulting-gabon.com Address: Anc. Sobraga, Face Entrée Union Médicale, BP 20211 Librevill (Gabon) Telephone: +241 07374210

ACQUISITION INTERNATIONAL

13/12/2012 17:59:40

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Ethiopia -----------------------------------------------------------------------Berhane Ghebray is founder and principal of the Law and Consultancy firm “Berhane Ghebray and Associates”, established in September, 1995, in Addis Ababa. ------------------------------------------------------------------------

The firm carries out due diligence work, drafts joint venture agreements, assists in obtaining registration and investment permits. It arranges settlement of disputes, acting as mediator, arbitrator and attorney for various clients. The firm distinguishes itself in terms of accurate and timely performance of the work assigned by clients.

Dr Ghebray stated that setting up a company in Ethiopia is relatively easy provided all the required documents are made available including fulfillment of formalities such notarization and authentification. The first thing that is needed is to have the statutes of the company properly drawn up and confirmed. He explained that the legal framework is businessfriendly, provided the rules and formalities are strictly observed. There are possibilities for tax holiday depending on the type of business, and work and residence permits are granted to owners/ managers of foreign business. “There is a continuous growth of company registration, and it would appear that this is due to the favourable investment climate, especially in certain sectors,” said Dr Ghebray. “The sectors that are seeing the most formations are agro-

Athens / Greece

industry floriculture, mining, IT, Cement and Steel Production. This has intensified in recent years.” Dr Ghebray noted that banking and credit facilities are available subject to strict Central Bank control regarding collateral. Corporation tax is a flat 30% plus 15% VAT. “The incorporation process varies according to whether we are dealing with a Share Company or a Private Limited Company (PLC),” said Dr Ghebray. “In the first instance, that is more adapted to big business for which the capital and governance requirements are higher. On the other hand, in the case of the PLC, which is in much greater demand, both the financial and organizational structures are much lighter.”

“They are also required to produce original copies of their statutes, confirmed by a notary public and authenticated by the State. It is also necessary to have the decision of the governing organ to set up a company/ branch in Ethiopia, and all of this has to be authenticated by the Ethiopian authorities. These formalities are real challenges, but they cannot be avoided.” Dr Ghebray believes that the formation process can be improved by greater/more intense training of the local staff. There are two types of companies. Partnerships (general or limited) and capitalised companies (LLC, Private Capitalised Company, and SA companies).

Commenting on regulation, Mr Stamelos noted that Memorandums 1, 2 and 3 provide for a friendly environment for businesses, at least in theory.

-----------------------------------------------------------------------Harry Stamelos runs Harry Stamelos Law Offices together with other five partners who are lawyers. ------------------------------------------------------------------------

Harry Stamelos Law Offices deal with a variety of cases and legal counselling. The firm focuses on commercial law, company law, EU law, international trade law, tax law, administrative law, sports law, mediation and civil law.

“Tax deductions and low wages could attract companies, but complicated legislation is still an obstacle,” he added. He stated that it is easy to set up a company in Greece, and it is very easy to proceed to bankruptcy if the company fails to do well. However, access to banking and credit facilities is less easy now compared to five years ago. He added that the incorporation of offshore/foreign companies is not difficult; noting that the corporation tax on such companies is low in comparison to other businesses at least today.

“My law offices combine experience of senior partners with the enthusiasm and expertise of young partners,” commented Mr Stamelos.“For instance, one lawyer speaks, writes and understands English, French, German, Italian and Spanish at the highest level specialised in legal terminology.”

“There is a constitutional provision for the protection of foreign investments in the Hellenic Republic,” he explained. “Invest in Greece is a new programme of the Government aiming at attracting foreign companies. The idea is good, and there is the constitutional provision which allows for exemptions and special benefits for foreign companies.”

Mr Stamelos explained that it takes a few days to set up a company in the Hellenic Republic, stating that a good lawyer can perform it in two or three days.

In order to improve the formation process and business environment, Mr Stamelos believes that it is necessary to simplify the Hellenic Law, and to

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“There is greater emphasis given to small and medium scale enterprises and I expect more businesses to be set up in different fields during the next 12 months. These businesses are in metal and woodwork, construction, furniture, and food processing activities. “One of the major difficulties faced by those engaged in these businesses is the fact that communication with foreign correspondents is in English and the language deficiency is a real handicap,” concluded Dr Ghebray.

On the issue of incorporating offshore/foreign companies, Dr Ghebray explained that some sectors of business are not allowed for them, e.g. banking, insurance and other financial activities, as well as trading (import, export, wholesale and retail) except for a manufacturer who can sell his own products inside and outside the country.

“The former require less documents, the latter require more documents, mainly the articles of association, the payment in the tax authority of a capital tax of 1% of the share capital, and the publication of the establishment in the Official Gazette of the Government,” he stated.

Greece

“The business environment will change gradually with the change in the mind set on the part of the bureaucrats.

Company: Berhane Ghebray & Associates Name: Berhane Ghebray (Dr.) Email: berhaneg@ethionet.et berhaneg95@gmail.com Address: Haile Gebreselassie Avenue, REBECCA Building, 6th Floor, No. 610 Telephone: +251 11 663 08 34 Fax: +251 11 663 09 30 Cell: +251 91 120 18 97 require less signatures, stamps, and civil servants bureaucratic involvement. Also, a long term policy on such issues should be combined with a stable legal environment. Looking ahead, Mr Stamelos noted that a survey in the Hellenic Republic shows that 85% of the young entrepreneurs in the country are optimistic for the business future. “If they feel optimistic, this may mean that economic growth will eventually start here based on more foreign investments and more offshore companies,” he commented. “I believe that if the political parties in the Hellenic Republic work together, a solution will be applied. For example, a new political party, the European Federalist Party appeared in 10 countries in the EU. There is also a chapter in the Hellenic Republic. We try to promote the idea of a federal Europe. Maybe this will be the solution for growth and prosperity and wealth for all Europeans,” he concluded.

Harry Stamelos Law Offices Company: Harry Stamelos Law Offices Name: Harry Stamelos Email: harrystamelos@hotmail.com Web: www.efek.gr Address: Thessalonikis 61, Athens, 11851, The Hellenic Republic Telephone: +302103467993

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13/12/2012 17:59:47

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in... Entrepreneur: a personal identification card; a completed registration form; and a registration fee of €10. There is no minimum capital requirement.

Kotor / Montenegro

Limited Liability Company (d.o.o.): minimum capital requirement of €1; founding act; the contract of decision of the company’s foundation; a completed registration form; and a registration fee of €10 Joint Stock Company (a.d.): a minimum capital requirement of €25,000; the founding act; the contract of decision of the company’s foundation; a list of names of all boards and managers; the board members’ and managers’ social security numbers; the names and addresses of the executive director, reviser board and secretaries; signed statements of agreement to perform duties in the company; a resolution from Security Commission board approving a public offer of shares; a completed registration form; and a registration fee of €10. General partnership (o.d.): two or more persons; and a registration fee of €10. There is no minimum equity requirement; Limited partnership (k.d): two or more individuals; and a registration fee of €10. There is no minimum equity requirement.

Montenegro -----------------------------------------------------------------------Nikola Perovic is the Director of International Sales at 13.jul Plantaze. ------------------------------------------------------------------------

The company is the single largest exporter of finished goods from Montenegro. It is a producer of premium wines and grape brandies, selling to 30 countries all around the world, on every continent except Africa. Mr Perovic explained that Montenegro has very low value added tax, as well as corporate tax, compared to all countries in Europe. Tourism is a growing segment, as is agricultural, especially in the wine industry. “We have 50% growth from exports in 2012, and lots of space for modernisation, where investments from abroad will find a very efficient yield,” he commented. “The fact is that Montenegro local authorities are slow in granting contruction licences, but it is important to know that their efficiency has been improved. I find this problem is the main issue. The bank sector is very liquid, so it should be a good partner for all incoming investors.” Regarding formation assistance, Mr Perovic noted that there are lots of good lawyers and consultants ready to help. He believes it is important to stress that they are equipped with good multi-language staff and that they better understand local problems in procedures. “Also, we have experts, like myself, who can assist in post-acquisition management issues, which can arise, especially in the period of global crisis.” Mr Perovic stated that, regarding business organisation law, the Central Register of the Commercial Court is in charge of business

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Part of a foreign company: A registration fee of registration fee of €10. There is no minimum equity requirement. registration. It has an electronic database of registered business entities, contracts on financial leasing and pledges. Montenegrin law permits the establishment of six types of companies, the most common being: Entrepreneur, Limited Liability Company (d.o.o.), Joint Stock Company (a.d.), General Partnership (o.d.), Limited Partnership (k.d.), and part of a foreign company. “The procedure of setting up LLCs in the Central Registry of the Court shall be completed within four working days, with founding capital of one Euro, and by submitting three documents: founding agreement, bylaw and form available at the website: www.crps.co.me,” added Mr Perovic. He explained that in Montenegro, foreign companies are guaranteed equal legal treatment to local ones. The term “foreign investor” applies to a company that has been set up in Montenegro by a foreigner, or foreign local entity, whose share of investment capital is higher than 25% of total capital invested. There is no limit on the amount of capital invested in Montenegro. “Beside the national treatment of foreign investors, in Montenegro we have a competitive tax system (VAT 17%, corporate profit tax 9%, personal income tax 9%, property tax 9%), as well as a skilled labour force, investment incentives, and market access to the countries that we have signed FTA (EU, EFTA, CEFTA, Russia, Turkey),” said Mr Perovic. Discussing the sectors seeing the most formations, Mr Perovic noted that 40.5% are in business in the “wholesale and small” sector, 10.8% in services in accommodation and food, and 8.9% in construction. “The highest concentration of business subjects recorded at these sectors and almost all municipalities follow this trend,” he added. To register a company in Commercial Court, it is necessary to present:

After fulfilling all these requirements, it is necessary to open a bank account. After that, the company reports to Tax Authority in order to receive a PIB (taxation identification number) and VAT number (Value Added Tax). The World Bank Doing Business Report 2012 has recognised that Montenegro has made progress and improvements in the areas of starting up businesses, issuing constructing licenses, taxes payment and employment. “The protection of investors and development of a competitive investment environment has been recognised as one of strategic priority of the Government of Montenegro,” explained Mr Perovic. “The Council for Regulatory Reform and Improvement of Business Environment has the aim of providing a stable business environment, implementation of structural reforms and to create conditions for attracting foreign investments. “We are constantly improving the economic environment in Montenegro. Currently, this process is very simple and short. “Having in mind all the benefits mentioned before Montenegro is recognised as a friendly environment for business and investment,” he concluded.

Company: 13.jul Plantaze Name: Mr.Nikola Perovic Email: nikola.perovic@plantaze.com Web: www.plantaze.com Address: Put Radomira Ivanovica 2 Telephone: +38220658032

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13/12/2012 17:59:53

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Russia

-----------------------------------------------------------------------Mike Allen is a partner with RUSSIA CONSULTING, where he runs the UK and US country desks, which are focussed on helping investors from these, and other English speaking countries, enter the Russia/CIS market. ------------------------------------------------------------------------

Mr Allen noted that there has been a generally strong demand in company formation due to Russia having a buoyant economy with strong business to business (B2B) and retail demand and with GDP growth of approximately 4% expected for 2012. This has been offset to an extent by concerns in the Euro zone limiting funds available for investment. “Russia continues to experience a high level of retail sales growth, which is expected to be 5.3% in 2012 and is driven by the consumer products, food and beverage, IT and Pharma/health care sectors. Looking ahead these and the agriculture and food production, B2B, construction, leisure and transportation equipment sectors are likely to provide good areas for investment over the next decade.

“There have been significant improvements in the ability to do business in Russia in recent years, in particular in the rule of law and the ability to enforce contracts and in property registration, where Russia came 11th and 46th out of the 185 countries reviewed in this year’s Ease of Doing Business report issued by the World Bank. The banking system functions well and generally payments are made electronically. However, bank loan facilities are more limited than in Western Europe.

is paying more attention to international trade relations and the business climate is expected to continue its strong and improving trend. “Western media has a tendency to be alarmist when reporting on domestic issues in Russia. This market presents a very attractive growth opportunity for many businesses and provided proper advice is taken investing companies can avoid difficulties.”

“These advantages are offset by a generally cumbersome and bureaucratic process of starting a business, which is likely to take between 3 and 6 months, and a bureaucratic State filing requirement for quarterly financial reporting and for all taxes.” Mr Allen explained that the Ease of Doing Business report issued by the World Bank identified the areas of Trading Across Borders, Obtaining Construction Permits and Getting Electricity Connected as being particularly troublesome, where Russia was evaluated as being the 162nd., 178th and 184th. country out of the 185 countries reviewed. “Looking forward we expect company formations to continue at a similar level to 2012. The Government

Company: RUSSIA CONSULTING Name: Mike Allen Email: AllenM@russia-consulting.eu Web: www.russia-consulting.eu Address: 115054 Moscow, ul. Bakhrushina 32/1 Telephone: +7 (495) 956 55 57 UK Representative: Dr. Gaby Henze Email: HenzeG@russia-consulting.eu Telephone: +44 78 3333 0557 The verification of submitted documents with the state registration authority usually takes up to three business days, and is considered successfully completed upon obtaining the Certificate of Registration (Guvohnoma) which contains a statistical code of a newly incorporated company according to the National Nomenclature of Enterprises and Organisations, and a taxpayer identification number, among others. 4. Along with the Certificate of Registration the state authorities grant permission for a company’s seal which have to be made by specialized seal-making companies.

Uzbekistan

-----------------------------------------------------------------------Valeriya Ok is a Senior Associate at Legalmax Law Firm ------------------------------------------------------------------------

Possessing rich natural resources, investing in human capital and implementing onward legal reforms, today Uzbekistan is ready to propose favourable conditions of doing business to potential investors and prospective companies. Over the years the most attractive areas for business circles have been transport and telecommunications, oil and gas as well as light and food industries. Irrespective of scope and scale of a business with the exception of specific areas, most start-ups prefer to be set up in the form of Limited Liability Company (thereafter – ‘LLC’, ‘Company’). The procedure of incorporating an LLC in Uzbekistan contains both legal and bureaucratic barriers, and also costs certain time and spending. However, those hurdles have been eased to some extent due to introduction of some recent legal acts. Basically, the procedure of incorporating an LLC can be described in 5 stages. 1. The first stage is the state registration of the name of the company and the preparation of constitutive documents. Legal requirements of the latter vary

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subject to the initial number of shareholders of a company. Given there are from 2 to 50 shareholders the constitutive documents shall be the shareholders agreement and the Statute. If there is only one shareholder the shareholders agreement is irrelevant so that the Statute shall be the only constitutive document. All constitutive documents have to be duly authenticated with notary public with the exception of the case when all shareholders are domestic. Since 1 June 2011 prospective entrepreneurs may substantially save their time as the reservation of a company’s name from then on is made online. 2. Before filing the relevant documents with registration authorities it is required to open a temporary bank account to which each shareholder must transfer 30% of his respective contribution in cash, likewise, to fully pay the state registration fee. 3. The next stage is the registration per se which is made by the state registration authorities (Khomiyat). The following documents must be submitted: • • • • • •

Standard application form; Two copies of constitutive documents; Three samples of the corporate seal and stamp approved by shareholders; Confirmation of payment of 30% contributions Confirmation of payment of the state registration fee; Confirmation of reservation of the Company’s name

5. The final step is the opening a permanent bank account which will serve as a main account for doing business. All previously paid contributions should be transferred to permanent bank account so that the temporary account is closed. This summary does not cover various issues that may occur at any stage of the procedure of registration of a company. Also, when thinking of starting a business in Uzbekistan, foreign investors should note that depending on the amount of foreign investments and value of the authorized capital, procedural requirements for incorporating a company will be different from the described. In order to avoid certain unexpected outcomes, it is highly recommended first to counsel with a local law firm that majors in corporate matters and knows all the peculiarities of the local legal system, and which can also advise on other efficient forms to set up a new business in Uzbekistan.

Company: LEGALMAX Law Firm Name: Valeriya Ok Email: valeriya@legalmax.uz Web: www.legalmax.uz Address: Room 6C-08 International Business Center, 107B Amir Temur Street, Tashkent, 100084 Uzbekistan Telephone: +998 71 2124732

December 2012 /

13/12/2012 18:00:00

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Guatemala

-----------------------------------------------------------------------Guillermo Montano is President of Transactel, powered by TELUS, the largest Central American BPO provider. With more than 7,000 employees in the region, and 17 years of solid trajectory, the firm continues to build successful client relationships. ------------------------------------------------------------------------

There are many attributes that make Guatemala so attractive for the outsourcing industry. Its geographical position is strategic for the development and investment of several industries. The export of services and its expansion in the country is an example of that. We’ve been characterised for different competitive advantages, such as bilingual and trilingual talent, a neutral accent, (required for customer service at international companies), wide access and development of the telecommunications and electricity industries, which allows us to provide first world qualified services. In addition we operate on the same schedule than the markets that have the greatest impact in our economy, such as the United States, Canada, Mexico, and the Caribbean.

Guatemala is currently experiencing strong growth in the outsourcing sector. Currently there are some 20 call centers that serve international accounts and 55 in-house call centres that manage services of their own company. Services offered in the market include customer service, telemarketing, collections, help desk and outsourcing of financial and administration processes. Services are provided currently for Latin America, the United States, Canada, the Caribbean and Europe. The most important languages are English and Spanish, although accounts are also being served in Portuguese, French, Italian, and German. The growth potential during the next years require having qualified talent as demanded by international markets, so the Agexport has promoted the creation of massive English language training programs with support from Government institutions. The industry currently 19,000 direct employments of which 9000 are bilingual. The industry grants professional development opportunities to its associates, who manage to make a career in those companies. The annual growth rate is estimated to be between

35% and 45% during the next years when local and foreign investment can surpass US$ 65 million. Judging from this rate of growth, AGEXPORT estimates a projected inter-annual growth of the services sector to generate 37 thousand new positions by 2015, should Guatemala apply a strong national bilingual program for university students. Otherwise, growth will be positive but will remain with a 15% rate.

Company: Transactel, powered by TELUS Name: Guillermo Montano Email: doingbusiness@telusinternational.com; sebastian.bulanti@telusinternational.com Web: www.transactel.net Address: 18 calle 25-85 Zona 10, Torre Transactel Pradera. Guatemala City Telephone: 2223.0000

THE SOLOMON ISLANDS Company: Rano & Company Name: Wilson Henry Rano Email: ranocompany@solomon.com.sb Telephone: +677 38741

MALI Company: Cabinet d’Avocats Seydou Ibrahim Maiga Name: Maiga Seydou Ibrahim Email: casim@afribonemali.net Web: www.casim-avocats.com Address: Sogoniko Rue 102 Porte 172 – BP: 2708 – Bamako Mali Telephone: +223 2020 8102 Fax: +223 20 20 96 17

BURUNDI Company: SODETRA Ltd. Name: Antoine Ntisigana Email: antisigana@yahoo.fr Web: www.sodetra.com Address: 8 Rue des Usines, B.P 2096 Bujumbura Burundi Telephone: +257 22 215841

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13/12/2012 18:00:12

SECTOR SPOTLIGHT:

Managing Environmental Risks in M&A Transactions

MANAGING ENVIRONMENTAL RISKS IN M&A TRANSACTIONS l As businesses develop plans for growth in these still somewhat turbulent times, environmental issues play a big part in determining strategic growth options and the decision to buy or sell. Regulatory and enforcement trends are ever-evolving and can impact on business strategy, operations and entity valuation. Over the years there have been some major environmental issues that have halted corporate transactions and inevitably the deal has failed to complete. After acquiring a company, by default, the acquirer assumes environmental legacy costs, and the vendor also still has liability. It is therefore of the upmost importance for both sides to understand the environmental issues and risks involved before entering into a deal. Within this report we are looking to include a select number of firms who are invited to discuss how they are able to assist businesses in carrying out environmental due diligence, advise firms in aligning their management of environmental exposure with their strategic decision making and to demonstrate how your expert financial and/or legal expertise can prove vital in identifying any environmental risks when completing a corporate transaction. Some of the topics we will be discussing within the report include the importance of comprehensive due diligence, assessing the risks that are particularly prominent in certain sectors or areas of business, the liabilities each party assumes when embarking on a deal along with any recent changes in enforcement and regulation. Acquisition International speaks to the experts for a close look at environmental risks. -----------------------------------------------------------------------Allan Busse is the Managing Partner at Ambiente International LLP. ------------------------------------------------------------------------

Commenting on how the firm assists business in assessing environmental risk when embarking on a deal, Mr Busse explained that in the first instance it is paramount to understand the deal context and what the acquiring business’ motivation is for embarking upon the transaction. In addition, the entities within the deal (such as additional lenders) need to be outlined along with any potential differences in risk appetite. “For example, if a US company is involved in the deal then reporting may need to reflect US standards as well. Once this is understood the environmental risk review can be structured along the lines of the purchaser’s needs,” he said.

The next step is to understand the business being reviewed and how this business historically and currently interacts with the environment – soil, controlled waters, air and most critically human health. “This usually requires a combination of a desk based review of all the available and relevant information from the vendor, a site audit, a review of publicly held data and consultation with regulating authorities.” Mr Busse noted that, for divestiture, it is essential that a firm understands the environmental impacts associated with all aspects of its business activities. This allows the development of strategies to address the environmental risks by structuring the day to day management of the business around the elimination (where possible), minimisation or management of environmental risks.

“The implementation of best environmental practices not only manages current liabilities but is crucial in the future when presenting a business to the market,” he observed. “A purchaser must also understand the environmental risks associated with an acquisition to implement and cost management strategies in order to ease the integration of the business into their corporate structure.” Mr Busse stated that the cost of addressing environmental issues such as soil and groundwater contamination, retrofitting energy inefficient buildings or process/production changes can significantly undermine the business case of a transaction. “Full understanding of environmental liabilities and compliance issues associated with a business or property is crucial to successful negotiation and ensuring costs for future management and alterations are accounted for within the transaction. Such assessment will inform all parties and allow for price negotiations, if appropriate.” “Larger corporate purchasers are increasingly looking at the wider sustainability agenda and will want to understand the cost of integrating an acquisition target into the sustainability programme of the purchasing entity,” he concluded.

Company: Ambiente International LLP Name: Allan Busse Email: allan.busse@ambientellp.com Web: www.ambientellp.com Telephone: Direct: +44 20 76212850 Mobile: +44 7770 615928

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December 2012 /

13/12/2012 18:00:13

SECTOR SPOTLIGHT:

Managing Environmental Risks in M&A Transactions A key issue raised by Mr Pearson is the referred reputational risks to co-investors. Many financial institutions are exceptionally concerned about poor environmental and social performance reflecting directly into an entire fund, portfolio, or institution itself. “These concerns are also supported by varying degrees in Directors liability which can drive the need for meeting international criteria such as IFC Performance Standards,” he added. Commenting on recent changes in enforcement and regulation, Mr Pearson noted that there is generally a slow increase in the levels of enforcement as the regulators are being provided with more teeth. “The rise in public opinion on environmental matters in Asia generally is giving regulators more support and reason to ensure that laws are followed by major and minor corporations. When foreign investors are involved there still seems to be added emphasis on E&S issues and compliance. However we are increasingly seeing more enforcement and monitoring on activities that can impact the environment and communities as a whole.” -----------------------------------------------------------------------James M Pearson is the CEO of Pacific Risk Advisors Ltd. ------------------------------------------------------------------------

Pacific Risk Advisors Ltd (PRA) is a management consultancy specialising in ESG and sustainability risk management in Asia. PRA works with the whole investment team to ensure that the E&S risks are appreciated and understood. Mr Pearson noted that it is important that the linkages between the E&S risks and the other key fundamentals being considered in the transaction are established. “Keeping E&S as a separate entity away from the core elementals of the deal means that the expected values will not be realised,” he commented.

“By understanding these key considerations an appropriate E&S risk profile can be established and a strategy developed,” observed Mr Pearson. “The risk profile can be used to ensure that exposures are reduced, but more importantly that opportunities are identified for new and improvement strategies in market positioning, products and approaches. “Many areas that are being missed in Asia are energy and resource management. Significant improvements to the bottom line can be realised through some fairly simple measures and improvements.” Mr Pearson stated that there are many avenues to consider when looking at the benefits of E&S DD.

“As such a key point in advising on a deal is to understand the status and structure of the proposed investment. Appreciating the leverage that the investor will be able to use in implementing E&S actions and improvements is critical. Knowing this ensures that the actions are attuned and focused to achieving the best outcome within the constraints of the deal.”

He noted that, from the operational perspective, many practical operational risk issues can be identified during the DD process that can translate into meaningful performance improvements within a short period of time. This can help settle concerns and also give a positive approach to the transaction.

Another aspect of an M&A deal noted by Mr Pearson is that often not all the assets are being considered for retention. However, as soon as an asset is owned the liabilities are transferred, so not including some assets in a E&S DD exercise can lead to some significant risks being held and not accounted for.

“Fully understanding the E&S risks at the outset allows for realistic actions to be developed, usually within the post investment 100 day action plan. If an escrow account needs to be set up for long term environmental risks these can be established as part of the main contract. Both sides need to be aware of this and it actually helps bridge the pre and post transaction periods.

“Often those assets not to be kept are ones where there has been limited previous investment, and as such this lack of management focus has led to corners being cut and E&S risks not being managed,” he added. The E&S risk advice PRA offers is very much focussed to the overall strategy of the deal and the subsequent details. Important considerations that need to be understood are investment period, structure, amount, reason, exit route, other investors, ESG criteria, ESG monitoring and surveillance, nature of operations, supply chain risks and exposures, international influences and trends.

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“If no E&S DD is conducted there is potential that E&S liabilities raised post investment will be difficult to deal with and time consuming. This detracts from the commercial aspects of running the “new” business and can seriously impact post transaction performance. “Any elements in the deal that are being considered for spin off need to be looked at carefully. The E&S risks cannot be side-lined and ignored just because it will be spun off and carved out, unless of course the liabilities are remaining with the seller.”

Looking ahead, Mr Pearson stated that Environmental and Social DD should no longer be seen as a separate function, as many opportunities are being missed by investors as they are not integrating environmental (and social) issues into the overall risk management approach of the transaction. He predicts that there will be a lot more integration of E&S into investor risk management strategies, coupled with the increase in ESG reporting for listed companies. This will drive ESG reporting in companies considered listing as an investment exit. “Many investors are leaving valuable intellectual knowledge with their E&S consultants, and post investment they are not tapping this resource to their benefit. The function of the DD process is to find the concerns and help close the deal. But having done so the transition of using DD related information to improve the performance of the investment is not being followed. “PRA views the role of E&S risk management as a combined strategy in pre and post transaction and pre and post exit. By considering the whole life cycle of the investment and maximising the performance through each stage, investors can realise the benefits in terms of reduced risk, better performance and elevated values. All these combine to form Sustainable Alpha,” concluded Mr Pearson.

Company: Pacific Risk Advisors Ltd Name: James M Pearson Email: james.pearson@pacificriskadvisors.com Web: www.pacificriskadvisors.com Address: 20F Central Tower, 28 Queen’s Road, Central, Hong Kong Telephone: +852 8199 0535

ACQUISITION INTERNATIONAL

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SECTOR SPOTLIGHT:

Managing Environmental Risks in M&A Transactions -----------------------------------------------------------------------Emmanuel Raskin is a Manager, Business Development, Benelux & Germany, at URS. ------------------------------------------------------------------------

URS is a fully integrated organisation with the capabilities to support the full lifecycle of a project – from conception through to start-up and ongoing operations, as well as decommissioning and closure. The firm is a single source provider of planning, architecture, engineering, environmental, construction and technical services. With a global network of offices in nearly 50 countries, URS’ comprehensive skills and expertise are valued by public and private sector clients around the world. The firm’s environmental advisory services cover a broad range, from due diligence, compliance auditing, permitting, management systems, product stewardship and sustainability services to soil & groundwater investigation and remediation, as well as asbestos management and the complete decommissioning and dismantling of industrial sites. In 2011 URS was identified as the largest global environmental consultancy based on revenue (Environment Analyst). Mr Raskin explained that, when assisting businesses in assessing environmental risks, URS usually applies a multi-stage approach tailored to the respective portfolio/client, comprising high-level identification of potential risks. This includes a media review (top down), a detailed document review and comprehensive site visit (bottom up) regarding environmental issues, as well as health & safety, reputational sustainability and technical concerns. URS uses its engineering background to deliver solutions instead of just identifying issues. Cost estimates are tailored to customers’ specific requirements, for example based on International Reporting Standards for recognising provisions, outlining cash flows and probabilities or applying Monte Carlo Simulations. “The management of environmental exposure should not only focus on liabilities and non-compliance issues (as is today’s standard in many transactions), but also consider future exposure to issues beyond compliance, as these may have a much bigger impact on the business (e.g. revenue and market share). It requires more than just paying money for remediation or correcting non-compliance issues,” commented Mr Raskin. “Such potential high risks could be related to water (increasing scarcity or flooding events), energy or the availability of raw materials and their origin. A review of these tasks should also consider the supply chain.” URS is helping its clients to cover these areas by conducting Environmental Social and Governance (ESG) due diligence. Mr Raskin stated that comprehensive due diligence is now considered necessary, as potential deal breakers can and have been identified even in relatively low risk and small transactions. This can be due to unclear historic ownership/liabilities, missing or incomplete permits, or risks within the supply chain. The key benefits of comprehensive due diligence are: • Getting the full and clear picture of a target’s environmental performance; • Assessing the vendor’s own perception of risks;

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• •

Identifying ways to deal with issues (such as cost reductions, escrows, contractual solutions or insurance); Drafting a plan for post-closure activities to begin corrective actions / integration of new sites without delay.

Mr Raskin noted that the key risk factors are very different between sectors and there is a constant flow of new regulations affecting the manufacturing industry. “A general trend is the increased awareness of media and stakeholders with regard to environmental and social issues, as can be seen in the textile or electronics industries in Asia, where most of the Western brands have their production facilities,” he observed. “The consumer goods industry is mainly in the focus of stakeholders, but suppliers are also confronted with increasing requirements and codes of conduct and often do not meet minimum standards. “An additional issue for the food industry is the risk and liabilities with regard to contamination with GGOs and allergic sensitive compounds (including control of the supply cycle).” Mr Raskin explained that the distribution of liability between buyer and vendor is a major part of any due diligence, as respective regulations increasingly define a broad range of liable parties (e.g. the polluter, the current and former owners of a site or the operator of a site). It is therefore necessary to agree on responsibilities for potential future liabilities at an early stage. “Of course, as a basis of such an agreement it is necessary to know as much as possible about the related costs as a result of a comprehensive due diligence,” he added.

Commenting on recent changes in enforcement and regulation, Mr Raskin noted that the Walloon region is still waiting for the full implementation of a soil decree, providing investors with a stable framework to consider environmental soil and groundwater liabilities. “Further implementation of IPPC and environmental liability directives as a consequence of REACH in the highly chemically industrialised country should not be underestimated,” he stated. In Real Estate transactions, environmental due diligence will also include a review of green building certification schemes (BREEAM, LEED) as this becomes a significant parameter for RE funds in their acquisition processes. URS’ team of accredited green building assessors is one of the largest globally. “The complexity of environmental due diligence efforts will further increase due to the number of deals that include multi-country portfolios. Also, we believe it is important to continue to focus attention on the environmental reputation, performance and compliance of products put on the market,” concluded Mr Raskin.

Company: URS Name: Emmanuel Raskin Email: emmanuel.raskin@urs.com Web: www.ursglobal.com Address: URS, De Vunt 13, 3220 Holsbeek, Belgium Telephone: + 32 16 46 86 60

December 2012 /

13/12/2012 18:00:22

SECTOR SPOTLIGHT:

Managing Environmental Risks in M&A Transactions -----------------------------------------------------------------------Gerard Kelly is the Managing Director of Environet Solutions. ------------------------------------------------------------------------

Environet Solutions specialises in providing sustainability and environmental compliance consulting services to clients. This can be in the form of sustainability consulting, licensing and compliance support or environmental due diligence. Mr Kelly explained that the assistance the firm gives to businesses in assessing environmental risks when embarking on a deal largely depends on whether the firm is acting for the vendor or the purchaser. In case of the vendor the firm always recommends the completion of a Vendor Due Diligence report, allowing the client to address any material compliance issues at an early stage. “For the purchaser it’s critical that the process doesn’t just look at environmental compliance but at sustainability compliance as well,” he commented. “Environmental is really a subset of sustainability in this context. If the planned purchase doesn’t align with the Sustainability Policy of the purchaser (if there is one) this needs to be highlighted along with the associated costs. This should form part of the decision making process.”

Discussing the advice the firm offers in relation to aligning management of environmental exposure with strategic decision making, Mr Kelly observed that recently it is all about sustainability and not just environmental compliance. He believes that comprehensive due diligence is imperative in M&A transactions as on too many occasions facilities and businesses have been purchased with associated environmental liabilities that far outweighed any profits that would ever be generated.

strengthening of legislation around the licensing of discharges to ground, and soil and groundwater pollution. He concluded: “There appears to be growing activity in Ireland, perhaps spurred on by lower company valuations due to the economic downturn. Environmental due diligence will develop towards sustainability due diligence as companies ask the question ‘will this acquisition align with our Sustainability Goals?’”

According to Mr Kelly, the current key environmental risks are centred around soil and groundwater contamination, installation of required abatement equipment and future costs such as the purchase of carbon credits. He stated that the distribution of liability between buyer and vendor will be a key aspect of the deal. “We would always recommend that the purchaser receives an indemnity against historical liabilities as part of any deal,” he added. Commenting on enforcement and regulation in Ireland, Mr Kelly noted that there has been recent

Company: Environet Solutions Name: Gerard Kelly Email: gerard.kelly@environet.ie Web: www.environet.ie Address: Dungarvan Business Centre, Dungarvan, Co. Waterford, Ireland Telephone: +353-58-51155 Mobile: +353-87-8221756

OTHER EXPERTS IN THIS AREA

Company: Baker & McKenzie Abogados, S.C Name: Federico M. Ruanova Guinea Email: federico.ruanova-guinea @bakermckenzie.com Web: www.bakermckenzie.com Address: P.O. Box 1205 Chula Vista, CA 91912, Tijuana, B.C., 22420, Mexico Telephone: +52 664 633 4324

OTHER EXPERTS IN THIS AREA Company: Churchfields Solicitors Name: Oluwatoyin Ajoke Bashorun Email: t_bashorun@yahoo.co.uk Address: Suite 201-203, West Wing City Hall, 23/25 Catholic Mission Street, Lagos Island, Lagos, Nigeria Telephone: +52 664 633 4324

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13/12/2012 18:00:31

SECTOR SPOTLIGHT:

Q4 — Report

Q4 Report

l Acquisition International’s final quarterly review of 2012 examines the factors driving the global economy, discusses some of the major findings of the last quarter and profiles the leading experts. -----------------------------------------------------------------------Harry Stamelos runs Harry Stamelos Law Offices together with other five partners who are lawyers. ------------------------------------------------------------------------

Mr Stamelos legally supports a new business in Athens – the first climbing centre in the Hellenic Republic. It is 2.500 square meters and has two beach volley courts, one open air ground and one huge building for climbing, parties, movies, and a conference room for 60 persons. Mr Stamelos note that there is innovation in this project. For example, there is now a rope course, a slack line, and so forth. This limited company has more than 10,000 clients and they have a flow from all over the Hellenic Republic, both adults and children with groups from schools. The first Hellenic Champions in winter beach volley took place there. “The natural persons who run this business are two inspired men,” commented Mr Stamelos. “The one is 62, and has worked for many years in the USA as a bank director. The other is 32, and has a passion with climbing. The combination is outstanding. -----------------------------------------------------------------------Stephen Bennett is a Partner at Hunton & Williams (Thailand) Limited. ------------------------------------------------------------------------

Hunton & Williams (Thailand) Limited provides its clients with experience and advice in virtually every discipline of the law. The firm’s pan-Asia domestic and international cross-border southeast Asia practice is centered from Bangkok. The firm coordinates multifaceted teams in negotiation, dispute resolution and transactions for the protection of its clients’ interests. With lawyers in Bangkok and around the globe, the firm can respond knowledgeably, effectively and quickly, whether the issue is local, regional, national or international. The firm’s active clients include: International Finance Corporation; Ashmore Investment Group; Telenor Asia; Cedar/ Aspen (affiliates of Temasek); Chubu Electric Power Company, Inc.; BP; Electricity Generating Public Company Limited; IPR-GDF Suez Asia Company Limited/ Glow Energy Public Company Limited; PTT Public Company Limited; Oravanich Group. Mr Bennett ‘s practice focuses on project development and corporate and structured finance, including telecommunications, petrochemical and electricity transactions.

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The deal was to raise the capital of the company for €140,000. This is huge for the Hellenic Republic in these times. And, the third partner went away. So, now these two are willing to do more. Size is big, complexity is certain, because of the many details and the legal requirements from the tax authorities, the zoning authorities, the sports authorities, and the transactions combined with the different legal provisions. At the same time, the duration of this project is since January 2012 and it is still going on.”

be applied. For example, a new political party, the European Federalist Party, appeared in 10 countries in the EU. There is also a chapter in the Hellenic Republic. “We try to promote the idea of a federal Europe. Maybe this will be the solution for growth and prosperity and wealth for all Europeans,” concluded Mr Stamelos.

Mr Stamelos noted that everyone is aware of the difficult situation in the Hellenic Republic. He believes that the Memorandums 1,2 and 3 are a solution only if there is economic growth and a high standard of living.

Harry Stamelos Law Offices

“However, there is disagreement between IMF and the European parties of the Troika about the problem .Most people hope that something good will happen. But many people feel lost. So, the businesses try to survive in a very difficult political and economic environment.”

Company: Harry Stamelos Law Offices Name: Harry Stamelos Email: harrystamelos@hotmail.com Web: www.efek.gr Address: Thessalonikis 61, Athens, 11851, The Hellenic Republic Telephone: +30 210 3467993

Mr Stamelos believes that if the political parties in the Hellenic Republic work together, a solution will

Mr Bennett has been practicing in Thailand since 1994. He is an Australian lawyer, qualified to practice in Victoria, Queensland and the High Court of Australia. Mr Bennett led the teams in the following representative work highlights: • Advised Cedar Holdings Limited (an affiliate of Temasek) on a sale of 6.24% of its holdings in Shin Corporation Public Company Limited to institutional investors through the Stock Exchange of Thailand board, with a value of approximately Baht 9.1 billion (US$ 300 million). •

Advised Cedar Holdings Limited (an affiliate of Temasek) on a sale of 7.9% of its holdings in Shin Corporation Public Company Limited to public institutional investors through the Stock Exchange of Thailand board, with a value of Baht 8.1 billion (US$270 million).

•

Advised International Financial Corporation on its investment in Sun Edison’s solar assets in Thailand.

•

Advising Thai Rail Investments, an entity controlled by Ashmore Investment Group, on the disposition of its remaining 6.12% shareholding in BST Group Holding, the owner

of the Bangkok Skytrain, to Keeree Kanjanapas for approximately US$ 120 million. •

Advising BP in relation to various corporate matters in Thailand.

•

Advising Glow Energy Group, one of Thailand’s largest independent power producers in Thailand, on all corporate & M&A matters.

•

Advising Pacific Century Group on its acquisition of Thai insurance assets of ING.

Company: Hunton & Williams LLP Name: Stephen Bennett Email: bennetts@hunton.com Web: www.hunton.com Address: 34th Floor, Q.House Lumpini Building, 1 South Sathorn Road, Thungmahamek, Sathorn, Bangkok 10120 Telephone: +66 2 645 8811

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-----------------------------------------------------------------------John Reeve is a Senior Consultant at Premier Pensions Management Ltd. ------------------------------------------------------------------------

Premier is a national employee benefit consulting firm specialising in advising Trustees and Sponsoring employers on all aspects of pension scheme management. Over the years pensions has moved from being one of the last things to be considered in any form of corporate transaction to being a major part of any deal. Over recent years we have worked with a number of corporate clients to manage their pension liabilities in such a way as to ensure that they are well positioned when a transaction becomes a possibility. In this way they can be sure that they will not be added to the list of deals that have failed due to the fact that it has not been possible to reconcile the pension issues.

-----------------------------------------------------------------------Tim Keast is the CEO of Clayton Euro Risk Limited. ------------------------------------------------------------------------

Clayton Euro Risk (CER) is part of a global consultancy business based out of the US. The UK business, based in Bristol, is responsible for all overseas activity from the UK and Europe to the Middle East, Asia and Australasia. CER specialises in the Credit and Property markets providing both Asset Due Diligence and Credit Risk consultancy. The Asset Due Diligence covers the majority of asset type such as Commercial, SME, Residential and Consumer Finance using a deep dive approach into individual loan files by a team of our experienced Underwriters, all highly experienced and ex Bank/Lender backgrounds. All aspects of risk are assessed including Credit Risk/Title/Compliance/Conduct Risk and any other identifiable evident risk in the loan portfolio. The Consultancy helps both new entrants and existing Financial Institutions in all aspects from Manuals -----------------------------------------------------------------------Ivan Gustavino is the Managing Director of Atrico Pty Ltd. ------------------------------------------------------------------------

For one client we worked on the closure of the Defined Benefit arrangement and its replacement with a high quality Defined Contribution arrangement. This was soon followed by an exercise to enable members to transfer their benefits out to another arrangement on enhanced terms. We worked with them to minimise the Plan’s investment risks and we have recently helped them to purchase a bulk annuity policy to match their pensions in payment and so eliminate their longevity, investment and interest rate risk. Whilst on their own these were all sensible projects which increased shareholder value; as a package they improved the funding of the pension arrangement, significantly reduced costs and have put the client into a strong position to carry out a significant corporate transaction. All of this was only possible by planning in advance. These projects take months (if not years) and cannot be contemplated when a transaction is approaching.

(such as Credit and Underwriter to Collections and Compliance Manuals), staffing (providing short term or smoothing peaks and troughs), outsourcing options (and managing the beauty parade process), oversight of reviewing and grading new business to M&A work. All staffed by former Bank and Lender Senior Management. CER has locally based teams in most of the active overseas markets as well as Country Heads, all project managed from Bristol, UK. The UK centre also provides completely secure facilities allowing remote access of virtual data rooms where an onsite presence is either impractical or too sensitive. CER acts for both the Buy side and Vendors. Since the onset of the financial crises, markets have and continue to be highly active, driven by the Banks need across Europe to divest and consolidate. The more active jurisdictions continue to be the more liquid markets such as the UK, Germany and Holland as well as the distressed markets such as Ireland, Spain, Portugal and Greece. Expectations are particularly high that amongst the latter group there will be substantial

We continue to work with clients to reduce risk, reduce costs and better manage their pension arrangements to add shareholder value immediately and put them in a better position to take advantage of future opportunities as they arise.

Company: Premier Pensions Management Ltd Name: John Reeve Email: john.reeve@premiercompanies.co.uk Web: www.premiercompanies.co.uk Address: 1st Floor, Prudential Buildings, 11-19 Wine Street, Bristol, BS1 2PH Telephone: +44 (0) 20 8663 5835

activity (and therefore Investor opportunity) in the next year or so, measured in the tens of billions Euros, of loan and property portfolios to appear on the market. Returns are highly attractive in the Sector but given the highly specialist nature of the market it pays to talk to Industry Experts like CER, the UK and Europe’s largest Due Diligence firm.

Company: Clayton Euro Risk Limited Name: Tim Keast Email: tkeast@claytonerm.com Web: www.claytonerm.com Address: 40 Queen Square, Bristol, BS1 4QP Telephone: +44 (0) 117 315 5810

which has had an effect on the engineering services firms and funding for new projects.

The Reserve Bank of Australia expects Australia to have a GDP growth rate of 3% for July 2012 to June 2013. Mr Gustavino stated that the rate of growth is slowing but activity is still strong in oil & gas and mining.

Commenting on the overall attitude regarding growth and deal opportunities in Australia, Mr Gustavino stated that it is very positive due to the major natural resources projects being invested into in the region. “Our attitude has improved since Q4 2011 due to an increase in our deal activity.”

“Fortunately this is where Atrico is a world-leading technology transaction specialist and has established an enviable track record in completing many deals between the $5-$50m range,” he commented.

He explained that, in September 2012, Australian imports were worth A$25,623m and exports A$24,166m. “The drop in exports can be largely attributed to declines in commodity prices due to the slowing global economy.”

“We expect Australia’s GDP to slow to 2.5-3% in 2013,” he concluded.

Mr Gustavino stated that, depending on the complexity and the parties involved, Atrico has seen deals in Q4 take from four months to 18 months from the beginning of the company’s mandate to deal completion. “Typically they have taken six – nine months to complete and have been funded by a combination of the acquirer’s cash reserve and debt facility.”

Discussing fiscal policies and economic reforms, Mr Gustavino commented: “In Australia, the Federal government is attempting to produce a balanced budget and has also introduced the carbon tax and a new tax policy for the iron ore and coal industry. Some commentators have voiced concerns these policies may worsen the impact of the slowing global economy on Australia.”

He observed that oil & gas and mining (natural resources sector) have seen the most promise in Q4, noting that Australian publicly listed company Imdex acquired ioGlobal – Atrico acted for ioGlobal.

He explained that access to funding in Australia has tightened due to the slowing global economy, decline in commodity prices, and souring market sentiment. This has led to some capital projects being shelved,

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“We expect this can affect the level of deal activity via downward pressure on valuations and therefore deferment on trade sale activity.

Technology Company Advisors

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

ACQUISITION INTERNATIONAL

13/12/2012 18:00:43

SECTOR SPOTLIGHT: Q4 Report

-----------------------------------------------------------------------Sherif El- Kilany is the Tax Service Leader Middle East & North Africa (MENA), at Ernst & Young Egypt. ------------------------------------------------------------------------

In line with the rest of the world, the economic outlook in MENA remains soft, primarily, due to the economic malaise that continues to plague Europe and its overhang effect on the global financial markets and major manufacturing and trading countries like China, Korea, Japan, Singapore and India. Fortunately, the economies of most MENA countries have been sheltered by the oil and gas sector which continues to be buoyant. During 2012, we have seen most MENA countries progressing with investments in oil and gas, infrastructure development and economic growth to generate employment opportunities for their youth, albeit with considerably more realism than in the past years. From a fiscal perspective, the tax authorities in MENA countries are facing pressures to increase tax collections to fund social programs and subsidies. -----------------------------------------------------------------------Scott Maras is Sales Director for ITG Worldwide. He has primary responsibility for group client acquisition and retention and the ITG team that supports this effort. ------------------------------------------------------------------------

Mr Maras stated that all indicators point to continued growth if accelerated growth for ITG. This means clients from small to large are expected to continue sending people outside their home country to engage in any number of activities from global sales and client service to major mergers, acquisitions, and divestitures. The company expects continued doubledigit percentage growth in 2013. One of several deals ITG is working on includes providing benefits for an employee customer service unit located outside the US that was sold by a previous corporation and acquired by ITG’s client. “We are creating a customised program that takes into account the employees’ benefit expectations and the acquiring company’s benefit philosophy and budget allocation,” commented Mr Maras. “We recognise our role in helping the client make a smooth transition when such an acquisition takes place. Often we can help overcome some potential -----------------------------------------------------------------------Evangelos I. Lakatzis is a Partner at A. S. Papadimitriou & Partners Law Firm and has participated as a legal advisor in numerous M&A, private equity and other cross border transactions. ------------------------------------------------------------------------

A common element in private equity cases is that the legal advisor must always take into consideration the legal and commercial aspects of the deal in order to offer legally safe – yet feasible – solutions. Obviously, this requires theoretical background, knowledge of business ethics, understanding of the deal and creative thinking. In terms of business during this last quarter, I think that we have witnessed a case study of the adverse effect created by a negative macro environment. It is common knowledge that this period has been extremely challenging for Greece; only six months ago, a Grexit from Eurozone was not a theoretical

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In the light of the prevailing low corporate tax rates, the tax authorities are adopting measures, to introduce and enforce more complex tax laws and regulations, to broaden the tax net and increase compliance. These trends are likely to continue through the coming year, 2013.

•

double tax treaty developments

Ernst & Young has the largest professionally qualified and experienced tax specialists located Egypt, Iraq, Kuwait, Libya, Oman, Pakistan, Qatar, Saudi Arabia and UAE.

Therefore, it is imperative for companies doing business in the Middle East to remain well informed of the changes in tax laws and practices as these arise. To help our clients stay well ahead, Ernst & Young is continuing its efforts to engage closely with clients, by providing on-the-ground quality tax advisory and compliance services relating to • dealing with subjective assessments of income and expenses • the changing outlook for deemed profit based tax filings • related party transactions • changes in thin capitalization rules and transfer pricing regulations and

negativity related to other aspects of the acquisition by providing a superior benefit package compared to what the employees had before.” ITG Worldwide serves clients of all sizes. Mr Maras noted that the company’s team dedicated to serving individuals and families can sometimes deliver an international travel plan in minutes, but most often these cases can be done in one or two days. “Individuals and smaller groups needing long-term benefits can be done in several days or several weeks depending on the size and complexity of risks,” he said. “A few very large cases can take months to complete from the initial conversations to final implementation.” Mr Maras stated that ITG continues to see the most promise delivering solutions to small-group forprofit clients. “By this we mean organisations with between two and 20 persons living and working outside their home country for six months or more,” he explained. “These organisations can make quick decisions based on current economic factors and want a firm that can move quickly with them.

discussion but a real possibility. During this time, the political, financial and legal instability, together with the results of recession and the turbulence created in social level, have rendered Greece a rather unattractive place to do business in. However, great effort has been put to leave all this behind. Firm political decisions and effected legislative changes aim to reinstate an attractive - investor friendly - business environment Of course, the situation is not ideal: it takes effort and sacrifices to implement changes that, under normal circumstances, would require decades. That being said, I think that the return of stability, together with the radical reform and structural changes that are being placed right now, will contribute to the reversal of the negative effects on the Greek business sector. Investment opportunities and prospects do exist in Greece and it is anticipated that investors will focus

Company: Ernst & Young - Egypt Name: Sherif El-Kilany Email: sherif.el-kilany@eg.ey.com Web: www.ey.com Address: Ring Road, Zone #10A - Rama Tower, P.O.Box 20 Kattameya,, Cairo, Egypt Telephone: +202 27260260

“The international insurance and benefits business is not immune to the ramifications of the US Healthcare Reform law, but so far the impact is not as great or as immediate as it is for benefits professionals who deal entirely in the “domestic” benefits space. And in some respects, the US law is just one of many challenges we deal with when we work across the world and the many dozens of jurisdictions and compliance environments our clients operate in,” he concluded.

Company: ITG Worldwide Name: Scott Maras Email: scottm@itgworldwide.com Web: www.itgworldwide.com Address: 500 Professional Center Drive, Suite 515, Novato, CA 94947 Telephone: +1 515 954 7392

again on such (even now there are some significant privatizations underway). This is the real comeback and we are looking forward to it.

Company: A. S. Papadimitriou & Partners Law Firm Name: Evangelos I. Lakatzis Email: eil@saplegal.gr Web: www.saplegal.gr Address: Macedonia Building, 367, Syngrou Ave., GR 175 64 Palaio Faliro Telephone: + 30 - 210 - 9409.960/961/962/926/042

December 2012 /

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SECTOR SPOTLIGHT: Q4 Report

-----------------------------------------------------------------------José Mahmoud Ayoub Barros Lubbad is the founding partner of Lubbad Advogados Associados S/S. ------------------------------------------------------------------------

In his career with Lubbad Advogados as a partner, lawyer and consultant, Mr Lubbad was and is responsible for the setting up of legal teams to take care of clients all over Brazil; especially in the northeast of Brazil. He is also responsible for the creation of a legal as well as political network so as to guarantee protection of client interest in the country; focused on real estate law and business, especially distressed properties and company recuperation. In his 12 years as CEO and Chairman of the board of partners of Lubbad Adv., Mr Lubbad was and is responsible for all of Lubbad Advogados offices in Brazil as well as abroad. Mr Lubbad is also responsible for investment analyses and business setup all over Brazil creating with the help of his partners tax bridges between Brazil and other countries all over the world.

-----------------------------------------------------------------------Richard Hall FBCS FIoD is the Chief Executive and Founder of CloudOrigin. ------------------------------------------------------------------------

We focus on IT advisory and due diligence work, where technology is central to the value generated and TMT sector deals where we also provide commercial and operational reviews. Our ability to deliver pragmatic recommendations for posttransaction improvements - whether to raise efficiency, accelerate management plans, reach new markets or control day to day cashflow sets our work apart from simple technical risk assessments. Since foundation in 2009 we have experienced annual growth in the number and value of transactions, alongside operational engagements with Private Equity portfolio firms. However 2012 was remarkable for the number of deals from the

-----------------------------------------------------------------------Adeyemi A. Akisanya is the Principal at Adeyemi-Akisanya Associates. ------------------------------------------------------------------------

Adeyemi-Akisanya Associates is a highly skilled, service-oriented boutique law firm specializing in energy and natural resources law, corporate commercial transactions and maritime operations, as its core areas of practice. Its partners and associates have developed considerable expertise and experience in every aspect of the business, operations and taxation of the oil and gas industry, (upstream, downstream and midstream), including independent power projects, all types of operations contracts and joint ventures (development, structure and finance); Ethical Laws (US FCPA, UK Bribery Act and others, in the context of Nigerian business operations); Statutory and Regulatory Compliance; and ADR, most especially Mediation, Negotiation & Conciliation. Mr. Akisanya is a CEDR Accredited Mediator. Mr. Akisanya is generally recognized for deep rooted experience and hands-on knowledge in the Energy

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Education: 1998: MBA in Theology and Islamic studies by the Royal Jordanian University; 2001: MBA in Business Law by Pontifícia Universidade Católica de São Paulo – SP, Brazil; 2004: MBA in International Private Law by the University of Fortaleza – CE, Brazil; Professional career: 1992-1993: Official UN translator in the UAE; 1993-1994: Official representative and translator of Al Nillen Co. part of the Lubbad Family Fund; 1995-1998: Professor of Arabic, invited, in the Federal University of Ceará, pedagogy sector; 1999-2000: Member the Law office Professor José Guedes, Advocacia Municipal e Electoral; 2000: Partner of Lubbad Advogados Associados S/S; 2005: Partner Lubbad Ambiental Reciclagem Ltda; 2008: Partner Grupo Vindo Brazil; 2009: Partner Lubbad Investments Ltda.; 2009: Partner Vindo Construçoes SA; Articles, publications and lectures: - Number on professional publications lectures on Brazilian comparative law;

and

billion dollar range down to the mid-market which failed to complete for a number of reasons, all arising from the fundamental macro-economic environment. Major businesses carrying too much prior leverage failed to attract new owners despite stable annuity revenues. Innovative, global players ran short of investors when a competitor received investment – which in other times would have been an encouraging sign of confidence in the sector. High growth services firms with credible expansion plans but Euro denominated earnings were unable to find banks to underwrite their future plans. Meanwhile some of the largest deals in FinTech have been hard fought over by major buyout firms and trade players. We were pleased to provide commercial and technical advice on the Thomson Reuters Trading and Risk carve out and potential Misys breakup for possible acquirers keen to understand all the angles. At the other end of the spectrum we were proud to work

(Oil & Gas) Sector, gained from working in the Law Department of ExxonMobil’s largest Nigerian E&P subsidiary, Mobil Producing Nigeria Unlimited, for over twenty years, three of which years were spent as International Transactions Counsel in that company’s head office, E & P division in Fairfax, Virginia, USA. He has advised government, as well as private companies and business persons on a full range of international corporate and commercial matters within that sector. The delay in the passage of the proposed Petroleum Industry Bill and, the controversies over some of its major aspects such as fiscal terms, has caused a lull in investment activity in Oil and Gas. Meanwhile, great gains are being made in the implementation and enforcement of local content law and policy. Government’s focused objective to empower indigenous operators and raise the level and scope of their participation in the oil and gas industry has seen positive results. Their operations are no longer confined to marginal fields and many are gradually

- Publications of the Lubbad legal Magazine with multiple legal views and articles; - Publications of multiple blogs regarding investment in Brazil and Brazilian cultural differences; - Lectures in multiple Brazilian states to speak about positive law and its affect in Brazil - Lectures in multiple Brazilian states regarding the difference between Islam and the Arabism; - Lectures in Brazilian state, Islam, difference between factions and sects as well as fanaticism.

Company: Lubbad Advogados Associados S/S Name: José Mahmoud Ayoub Barros Lubbad Email: jmlubbad@lubbad.com.br Web: www.lubbad.com.br Address: Rua Tibúrcio Cavalcante, 1.327, CEP 60125-00, Aldeota, Fortaleza, Ceara, Brazil Telephone: +558530333950

on early Venture Capital rounds for UK technology startups such as KnowledgeMill, and current strategy engagements for high growth Software as a Service providers which include M&A opportunities. We expect these green shoots to fuel deal flow in 2013.

Company: CloudOrigin Name: Richard Hall Email: info@cloudorigin.com Web: www.cloudorigin.com Address: Exchange Building, London, UK Telephone: +44 203 642 5715

becoming major players. These gains are being consolidated through Government’s concerted efforts to liberalize the investment laws and regulations, which is improving, significantly, the ease of doing business in the country.

Company: Adeyemi-Akisanya Associates Name: Adeyemi A. Akisanya Email: yemi@adeyemi-akisanya.com info@adeyemi-akisanya.com Web: www.adeyemi-akisanya.com Address: 5th Floor, Okoi Arikpo House, 5 Idowu Taylor Street, Victoria Island, P. O. Box 50230, Ikoyi Post Office, Falomo, Ikoyi, Lagos, Nigeria

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SECTOR SPOTLIGHT: Q4 Report

is expected to grow as GDP in forecasted to rise 1.9% in 2013.

Valletta / Malta

Maltese students recently topped the ranking of the European Survey on Language Competences when it comes in 14 countries to provide comparative statistics and information about language learning, teaching methods and curriculums. Malta ranked fourth overall for second foreign language competence (English and Italian). Similar to the country, Centrecom is constantly expanding and reaching new heights. Our future expansion plans will focus on the Middle East region. In addition we aim to create an outbound team on data collection and market research, after sales calls, customer satisfaction and customer retention. At Centrecom, we are dedicated to you. -----------------------------------------------------------------------Nadia Pace is the Business Development Manager at Centrecom. ------------------------------------------------------------------------

In recent years Centrecom has established itself as a premier contact centre. As a multi-lingual International Business Process Outsourcing (BPO) company, we offer back and front office services through our contact centre based in Malta - a native English speaking country. It is the security, quality and excellence in the services we provide alongside our specialised workforce, economic stability and highly motivated team that nominates us as a natural extension to your business.

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Our current clients come from a variety of industries, including; aviation, utilities, finance, online classified advertising, government entities as well as travel and tourism. We are proud to be the contact centre for renowned international brands, such as Gumtree UK & eBay, Inc. together with other leading companies in their respective industry. Malta’s stable economy is also recognized by international credit rating agencies, such as Moody’s, Standard & Poor’s, and Fitch, all of them ranking Malta’s Public finances in a very positive light. This distances the country from the international recession scene. The Maltese economy

Company: Centrecom Name: Nadia Pace (Business Development Manager) Email: nadia.pace@centrecom.eu Web: www.centrecom.eu Address: Aviation Centre First Floor St. Thomas Street | Luqa | Malta | LQA5000 Telephone: +356 2364 4098

December 2012 /

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SECTOR SPOTLIGHT: Q4 Report

-----------------------------------------------------------------------Mike Hinchliffe is a Director at Merrill DataSite, International. ------------------------------------------------------------------------

Mr Hinchliffe explained that the volume of new projects Merrill DataSite has been involved with since the start of 2012 is actually up around 15%, which is consistent with the company’s growth forecasts. “Judging by the volume of new projects being opened through Merrill DataSite’s international team, which covers EMEA and APAC, we also believe there will be a significant number of M&A deals closing in the first quarter of 2013,” he commented.

significantly from quarter to quarter from what we are seeing,” observed Mr Hinchliffe. “The most active sectors are consistently industrial and manufacturing, financial services, energy and utilities, and healthcare. This hasn’t changed for us throughout 2012, or even since 2011.” Mr Hinchliffe stated that, since the start of the financial crisis, tightening and on-going regulatory changes have definitely been affecting the M&A industry. This has had an obvious impact on the company as a service provider to the industry.

Recent high profile deals the company has been mandated include the acquisition of NDS Group by Cisco for £3.1bn, the purchase of Mediq NV by Advent International for more than £1bn, the merger of Norsk Hydro’s and Okla’s aluminium businesses and the sale of Actavis to Watson Pharmaceutical for £3.6bn.

“Regulation is definitely making dealmakers more careful when it comes to performing thorough due diligence – for example the U.K. Bribery Act requires investigation to be carried out on the U.K. company in question, and also any subsidiaries or JV partnerships,” he commented. “Additional compliance requirements, such as these, can put pressure on smaller companies in particular, who may struggle with resourcing.

“The industries that are delivering in terms of successful M&A activity aren’t changing

“We know that global growth is slow and there are still plenty of challenges for dealmakers out there.

There are regulatory changes, political uncertainties and pressures on lending. However, we truly feel there is plenty of cause for optimism given the volume of transactions we are opening up across EMEA and APAC. “We haven’t necessarily seen a huge up-surge in the number of transactions we’ve been involved with from Q4 2011 to Q4 2012, but a solid 15% growth has been delivered, and we expect that to continue or to improve next year,” he concluded.

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)845 602 6916

— Escalation of tax audits and disputes invasive powers (for example search and seizure of documents without a warrant and criminal sanctions on not providing information timeously). Taxpayers who are subjected to an audit would be well advised to treat these exposures proactively and understand their rights in terms of the Tax Administration Act as well as Administrative and Constitutional Law principles. Taxpayers face a challenging and complex tax environment. The tax authorities will continue to regularly audit large corporate taxpayers. The frequency and intensity of the audit may vary directly with the risk ascribed to the particular taxpayer and the perceived aggressive tax planning implemented. Even where these transactions comply with the letter of the law, they may be regarded as tax aggressive if they do not comply with the “spirit” of the law and are bound to be challenged. South Africa ranks amongst the best in the world in the financial and legal sector, auditing standards and business sophistication. With Africa widely viewed as the last frontier of continents providing real growth, the foreign investor would be well placed to promote strong corporate governance regarding their tax function.

-----------------------------------------------------------------------Roula Hadjipaschalis is a senior partner at KPMG South Africa (tax). ------------------------------------------------------------------------

The impact of the Euro zone debt crisis and the slowdown in China and India are adversely affecting economic growth in South Africa with forecasts that the projected growth of 2.7% will not be achieved in the current fiscal year. With the Euro zone being South Africa’s largest trading partner, the decreased demand for South African exports has resulted in a deteriorating economic performance, an increase in the trade deficit and more sombre approach to the

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economy. National Treasury forecasts GDP growth at only 3% for 2013. With fiscal deficits increasing, the tax authorities are under increasing pressure to hunt and collect from a smaller pool of taxpayers. The result has been an increase in tax audits and disputes, creating an uncertain landscape for taxpayers. This trend is by no means unique to South Africa as tax authorities around the world are becoming more aggressive in pursuing corporate taxpayers. The introduction of the Tax Administration Act hints at these tensions. It provides the tax authorities with substantially more

Company: KPMG Services (Pty) Ltd Name: Roula Hadjipaschalis Email: roula.hadjipaschalis@kpmg.co.za Web: www.kpmg.co.za Address: KPMG, 85 Empire Road, Parktown, Johannesburg, 2193 Telephone: +2711 647 5745

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-----------------------------------------------------------------------Arnaud Coibion is a Corporate Partner at Linklaters, and coleader of the firm’s global Energy & Utilities sector. ------------------------------------------------------------------------

M&A activity remained relatively scarce in Q4 2012 across sectors. Mr Coibion noted that LBO deal flow remains low, not so much for lack of availability of senior debt financing, but often for perceived lack of worthwhile opportunities. Given the relative scarcity of targets, he stated that valuations in M&A deals remain resilient. “Throughout Europe, trade sales are currently the most common exit routes for Private Equity investors, which shows that corporate buyers, albeit picky, retain a strong appetite for strategic expansion,” he observed. “Asian buyers are becoming more prominent than before.” During Q4, Linklaters advised on a number of M&A deals, including the creation of a joint venture between the Belgian gas transmission system operator (TSO) and its Italian counterpart, and the

subsequent acquisition by such joint venture of stakes in the gas interconnector linking Belgium and the UK. “This deal is typical of the trend toward horizontal consolidation of the European gas and electricity transmission networks, as well as the development of interconnectors, which will create greater flexibility in the market, in line with the impulse given by the Third Energy Package,” explained Mr Coibion. Mr Coibion highlighted the following recent transactions that mirror the trends described above and the sectors that show the most potential: •

AXA Private Equity’s acquisition from ArcelorMittal of a 23.48% stake in Enovos International S.A., the Luxembourg headquartered gas and electricity supplier;

•

Sinopec Kantons’s acquisition of a 50% stake in Vesta Terminals, a group engaged in operating bulk liquid storage terminals.

GDP growth for the Benelux region is expected to be between 0.5% and 1% in 2013. In the energy sector, Mr Coibion expects a number of renewable energy assets to change hands in the next year, as well as some more traditional generation assets. “The healthcare and biotech sectors should continue to provide opportunities for M&A,” he commented. “Since the M&A market is significantly influenced by non-European buyers, deal prospects will depend to a large extent on the improvement or worsening of the Eurozone crisis.”

Company: Linklaters Name: Arnaud Coibion Email: arnaud.coibion@linklaters.com Web: www.linklaters.com Telephone: +32 2 501 90 18 / +352 2608 8363

— Five Recommendations for a Foreign Retailer in Ukraine

Independence Square - Kyiv / Ukraine Mikhail Markovskiy / Shutterstock.com -----------------------------------------------------------------------By Kostiantyn Likarchuk, Partner, and Gennadii Roschepii, Associate ------------------------------------------------------------------------

In Ukraine, foreign investors face a “non-Western standard” business environment, confusing and unstable legislation, and bureaucracy. It requires a lot of time and effort to understand the local “rules of conduct”, so many investors prefer to have a local partner. There are two main options for having a local partner in retail: (a) franchising and (b) joint venture. Franchising requires less investment but may be less profitable; a joint venture usually is more profitable but requires more investment. Also, in the case of a conflict, a joint venture is more attackable. In the above options, a foreign retailer should consider the following: 1. Joint venture shareholding: Ukrainian courts are rather inexperienced and are sensitive to administrative pressure.We recommend moving all shareholding agreements out of Ukraine. This is

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also advisable from the perspective of investment repatriation. 2. Governing law: Ukrainian corporate law remains rather inflexible and does not provide shareholders with all “standard” corporate tools for regulation of shareholder relations. We recommend governing all commercial agreements by a foreign law and resolving all commercial disputes in an international arbitration. 3. Antitrust issues: Even if a joint venture is established abroad, it is still subject to Ukrainian antitrust regulations. In most cases, a joint venture requires approval of the Antimonopoly Committee of Ukraine. 4. Legal/financial consultants: A foreign retailer should have Ukrainian legal and financial/tax advisers. They should supervise at least (a) tax charge and payment, (b) goods supply and customs clearance, (c) permits and approvals, and (d) litigation. 5. Retail leases: Regarding lease agreements, a foreign retail investor should consider the following:

a. If the lease term exceeds three years, the lease agreement is subject to notarisation in Ukraine. This will cost from UAH17 up to UAH850 (from USD1.8 to USD106.11). b. The landlord may terminate the lease agreement only in cases, provided by (a) law (i.e., rent payment delay; damage to the leased property etc.) or (b) the agreement. We advise providing in the lease agreement a termination clause specifying alternative cases for the lease termination. c. The tenant has a pre-emptive right to execute the new lease (should the landlord wish to lease the premises for another term), as well as a preemptive right to buyout the leased premises (should the landlord wish to sell the premises). d. The tenant may carry out fit-out works only upon obtaining the landlord’s consent. Upon the lease expiration, the tenant is entitled to reimbursement of the fit-out costs, provided that such fit-out works (a) may not be removed by the tenant, and (b) were approved by the landlord.

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

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distribution system in Steyr. The legal consulting service comprised the notification of the merger with the Austrian Antitrust Authority.

Vienna / Austria

Public Procurement SCWP Schindhelm was acting on behalf of Foralith Bohrtechnik AG and won a review case before the Austrian Federal Public Procurement Office in connection with the construction of the Brenner Base Tunnel. The works were tendered in Austria and are to be performed on Italian territory. For the first time, the Federal Public Procurement Office ruled, that international cases such as this are within the scope of its jurisdiction. Real Estate SCWP Schindhelm advised ifa - Institut für Anlageberatung AG on the acquisition and development of the listed building Elisabethstraße 3 in the centre of Vienna. SCWP Schindhelm’s advising extended in particular to the structuring of the acquisition of the asset via a limited partnership and the sale of the limited partner shares to the ultimate investors.

Saxinger, Chalupsky & Partner Rechtsanwälte GmbH (SCWP Schindhelm) is one of Austria’s leading CEE-operating law firms. The firm’s roots date back to 1946. On the basis of this long-standing tradition, its focus is to provide comprehensive legal advice in all relevant fields of domestic and international business law through its specialised teams of lawyers.

The firms’ team are not only experts at law, but also at identifying a client’s (legal) needs and at explaining and summarising any legal problems and the respective tailored solutions therefore to its clients. SCWP Schindhelm can thus proudly guarantee its clients the best possible legal advice.

With around 90 lawyers at the commercial centres of Graz, Linz, Wels and Vienna and the foreign offices in Bratislava, Brussels, Pilsen, Prague and Budapest, SCWP Schindhelm provides national and international clients with support in all areas of business law.

Capital Markets SCWP Schindhelm advised Blue Planet Holding AG with regard to (i) the private placement of a EUR 10 Mio. corporate bond and (ii) the placement of a EUR 100 Mio. corporate bond in the third segment of the Vienna stock exchange.

SCWP Schindhelm is a member of the SCWP Schindhelm Services SE, an alliance of European business law firms with offices in Central and Eastern Europe and Asia Pacific. With more than 150 lawyers in 18 commercial centres in 11 countries, the alliance members accompany national and international companies in all areas of business law. The offices of the alliance are located in: Bratislava, Wroclaw, Brussels, Budapest, Bucharest, Burgas, Graz, Hanover, Istanbul, Linz, Osnabrück, Pilsen, Prague, Shanghai, Sofia, Warsaw, Wels, Vienna.

Corporate and M&A SCWP Schindhelm advised Ramber Holding GmbH on the sale of a 75 % share to the Japanese infrastructure company SEKISUI CHEMICAL CO.,LTD.

SCWP Schindhelm’s mission is to deliver creative and pragmatic legal solutions. The firm’s challenge – and source of inspiration – lies in offering its clients both, prompt and flexible legal services of the very highest standard, and understandable and easy solutions tailored to the client’s technical and/or commercial needs. Through its global network it can combine local expertise and know-how with our thorough expertise in the supervision and coordination of legal work in many different jurisdictions.

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Recent deals:

Dispute Resolution SCWP Schindhelm advised Bilfinger Berger BaugmbH in construction projects of SEG Stadterneuerungs- und EigentumswohnungsgmbH, including representation in several court cases on contract performance and termination as well as payment and liability issues. Up to now, the total amount in dispute was EUR 9,500,000.00. SCWP Schindhelm successfully conducted proceedings before Austrian courts, wherein the recent case on guarantee claims could be settled in April 2012. EU and Competition SCWP Schindhelm advised Energie AG Oberösterreich Wärme GmbH in a joint venture project and the notification concerning the merger between two national district heating companies. This joint venture will construct and operate a

Corporate Law SCWP Schindhelm advised on the acquisition of the general partner´s share of a company in the legal form of a limited partnership by a company of the ifa-group and the entry of approx. 300 investors into this limited partnership. SCWP Schindhelm drafted all agreements required (company contract, SPA, membership applications, POAs) under application of the tax-privileged developerscheme for builders which is highly beneficial for commercial investors. Furthermore SCWP Schindhelm supervised all company registerrelated aspects of the project, eg resignation of former partners and registration of new investors, as well as the transfer of the registrated office. Another focus of SCWP Schindhelm’s advice is the supervision of the investors´ and general shareholders’ meetings. Finance/Regulatory Law Additionally, SCWP Schindhelm advised ifa on the sale of the limited partnership shares to the ultimate investors taking into account regulatory aspects and acts as escrow agent for the ultimate investors. Real Estate Law Due to historical reasons the property Elisabethstraße 3 currently is part of a building complex of several neigboring porperties. SCWP Schindhelm secured the future independence of the property Elisabethstraße 3 by concluding servitude agreements with the owners of the neighbouring properties.

Company: Saxinger, Chalupsky & Partner Rechtsanwälte GmbH (SCWP Schindhelm) Email: vienna@scwp.com Web: www.scwp.com Address: Linke Wienzeile 4/II/2, A-1060 Vienna Telephone: +43 1 9050100 Fax: +43 1 9050100 100

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-----------------------------------------------------------------------David J. Pickles is Director of Strategy & Development at MIAC | Acadametrics Ltd. ------------------------------------------------------------------------

MIAC | Acadametrics Ltd is a UK based company working both in the UK, and across Europe. We are a top provider of risk management and analytics for the lending markets (residential, commercial, and other assets) providing solutions for stress testing, pricing and valuation, cashflow outcomes for example. We have expertise in secondary and capital markets, price discovery methods and collateral behaviour analysis. In the U.S. we currently integrate with the largest available, independent prepayment model vendors, credit risk model vendors and data vendors. This expertise is largely unavailable in the UK and Europe, except as provided through the services of the MIAC | Acadametrics team and the platforms and solutions provided. In both the UK and Europe, MIAC | Acadametrics combines our proprietary software and mortgage stress testing and scenario analysis programs and our proven analytics and cashflow platform. Aimed at supporting mortgage lenders, capital markets players and asset management businesses, MIAC | Acadametrics is a unique, independent, source of the -----------------------------------------------------------------------Jan Bjerrum Bach is a founder and Attorney-at-Law at Jusmedico. ------------------------------------------------------------------------

Jusmedico is a specialist law firm providing legal services to the biotech, pharmaceutical, medical device and dentistry industries, life science investors and to suppliers and service providers thereto. The working areas of Jusmedico include, without limitation, biotech start-ups, capital raising and re-funding activities, research & development, pre-clinical test (GLP) and clinical trial (GCP), manufacturing & supply (GMP), labelling & packaging, licensing, marketing alliances (copromotion & co-marketing), agent and distribution agreements (GDP), advertising & promotion, pricing & reimbursement, parallel imports of pharmaceuticals and insurance issues related to all of said working areas, including product liability claims. Internationally Jusmedico operates a representative office in New York, USA. -----------------------------------------------------------------------Marius Nasta is the Chief Executive of Redress Solutions LLP. ------------------------------------------------------------------------

Redress is one of the few recognised litigation funders members of the Association of Litigation Funders of England and Wales (“ALF”). We assist companies, partnerships and individuals to preserve cash and utilize it to manage and grow their businesses by funding the costs of their litigation in exchange for a percentage share of the award resulting from that litigation (be that a ruling of a court, arbitral award or a settlement following mediation). If our funded clients lose their case, we will also pay for the defendant’s costs and will take out insurance (yet again at our cost) to cover such expenditure. The third party litigation funding industry is experiencing strong growth. Companies find it appealing because they can write off provisions for legal costs from their balance sheets and use the

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leading edge risk analytics required of all participants in today’s demanding markets. With increasing regulatory and market pressures, organisations need to be able to look to providers who can support their needs and requirements through delivery of high standard output and services that are compliant, timely, cost effective, and underpinned by a highly professional and experienced team. MIAC | Acadametrics provides such services and solutions. We continue to expand our services across a number of geographies in Europe, and support a number of major institutions with delivering time pressured results to a high standard. With the outlook for most European geographies remaining the same, or potentially worse, over the next few years, MIAC | Acadametrics is regularly involved with organisations looking to maximise business and market opportunity across all asset and market sectors. One of the additional benefits MIAC | Acadametrics brings to organisations is our collaborative approach to working. This includes working with key partners such as Clayton Euro Risk Management who provide their services to the same high professional standards to their clients and Jusmedico is audited by AP, Chartered Accountants, Copenhagen, and is regulated by the Danish Bar and Law Society. Mr Bjerrum Bach graduated from the University of Copenhagen (Master of Laws) in 1987 and was subsequently trained in the Copenhagen City Law Firm Møller, Tvermoes & Hoffmeyer, Mr Bjerrum Bach was admitted to the bar and received his High Court advocacy rights in 1991. In late 1991 Mr Bjerrum Bach joined the Lundbeck group and was appointed General Counsel thereof in 1994. Mr Bjerrum Bach was appointed General Counsel and Executive Vice President of a globally operating reinsurance group in 1999, whose global operations were put into run-off after 9/11 2001. In 2004 Mr Bjerrum Bach established Jusmedico Law Firm Ltd. (“Jusmedico”), which is now representing leading Danish biotech companies and R&D based pharmaceutical operations on legal and regulatory issues, clinical testing, manufacturing, international alliances, product liability and insurance matters. freed up cash to either grow their business or, for those companies in dire straits, to simply survive the recession. We are also experiencing great volumes of funding in the insolvency area where insolvency practitioners call on our funding capacity and experience to pursue claims against third parties responsible for driving the company into liquidation. Increasingly, our individual clients are no longer the impecunious ones but claimants who simply want to avoid the risk of litigation all together by having us fund it and removing any risk associated with these costs. We expect the future to offer substantial growth opportunities for litigation funding. London is fast becoming the leading centre for dispute resolution as evidenced by some landmark cases this year. Changes in the law will also require more funding for lawyers who want to work for their clients on a no win no fee basis and who need the cash to fund their work in progress. The existence of the ALF

partners. This means that a business can be assured of receiving the best of the two organisations under an integrated approach, delivering improved benefits and cost efficiencies. With the current forecasts for the Eurozone, the likelihood of further deleveraging by major financial institutions across the zone, together with the need to deliver yield and return in a low rate environment, we believe MIAC | Acadametrics is well placed to support businesses to achieve these and other core objectives.

Company: MIAC | Acadametrics Name: David Pickles Email: david.pickles@miac-acadametrics.co.uk Web: www.miac-acadametrics.co.uk Telephone: +44 (0)208 392 9082 Mobile: +44 (0)7851 214975 A Jusmedico Advisory Board was formed in 2007 to accommodate the need among life science clients for services to be rendered not only by lawyers, but also by professionals holding other competencies. The Jusmedico Advisory Board now comprises 8 professionals whose individual professional competencies and experiences are complementary to each other.

Company: Jusmedico Advokatanpartsselskab Name: Jan Bjerrum Bach Email: jbb@jusmedico.com Web: www.jusmedico.com Address: Kongevejen 371, DK-2840 Holte Telephone: +45 4548 4448

and its membership also gives clients additional security when it comes to the funder’s reputation and his ability to actually cover the entire cost of the litigation process.

Company: Redress Solutions LLP Name: Marius Nasta Email: mnasta@redresssolutions.co.uk Web: www.redresssolutions.co.uk Address: 62 Grosvenor Street, London, W1K 3JF, United Kingdom Telephone: +44 (0)20 7499 4301

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— Pension Obligations – Material Transaction Issue their engagement with the Trustees and ultimately determines their decision-making.

-----------------------------------------------------------------------Gavin Markham is an Associate at Barnett Waddingham LLP. ------------------------------------------------------------------------

A thorough due diligence process should underpin the analysis of the pension issues, including consideration of recent developments such as the current consultation on the RPI calculation methodology. As the majority of UK schemes provide RPI related pension increases, any changes could have a significant impact on the liabilities. Companies should also be aware of the potential implications of the consultation on the smoothing of asset and liability values announced in the Chancellor’s Autumn Statement and the longer-term application of a European Solvency II regime to employer sponsored pension schemes, as well as the effect of the ongoing implementation of auto-enrolment.

The continuing economic climate of very low government bond yields and a fall in corporate credit spreads have put further pressure on the financing of UK defined benefit pension schemes. The resulting increase in liabilities adds to the financial impact of pensions within the overall context of a corporate transaction, potentially making it a deal critical issue.

unattractive due to deteriorations in the funding position of the target’s pension arrangements. Secondly, in a competitive purchase situation a rival bidder for a major UK plc was in a position to make a higher offer due to their pricing of the pension obligations. In particular, the Trustees of the pension scheme assessed the rival to have a stronger UK employer covenant which enabled it to price a relatively favourable future scheme funding scenario into the transaction.

For example, our recent experience has included advising buyers where the pension issues have been sufficiently material to prevent the transaction from proceeding. Firstly, a Spanish buyer chose not to proceed when the pre-agreed purchase price became

More than ever, it is crucial for the company to fully understand the financial issues and risks for both future service benefit provision and any past service commitments – how this relates to transaction pricing and risk management, influences

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Company: Barnett Waddingham LLP Name: Gavin Markham Email: gavin.markham@barnett-waddingham.co.uk Web: www.barnett-waddingham.co.uk Address: Cheapside House, 138 Cheapside, London, EC2V 6BW Telephone: +44 (0) 20 7776 2200

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— “Cash is King” for International Oil & Gas Companies in 2013 Small and medium-sized (SME) O&G companies, whose strategies traditionally involve frequently accessing the capital markets, will be adversely affected by their tightening. With European banks looking to trim their balance sheets by an estimated €2tn over the next 18 months, and facing reduced access to US$ money market funds, constrained credit may be the new norm for the proximate future. In addition, Basel III, the new global rulebook for banks, may provide one more reason as to why the outlook for smaller international O&G companies is decidedly more somber. The introduction of additional capital buffers against loan losses, including the mandatory conservation buffer of 2.5%, makes loans to smaller O&G companies less attractive. The reduced appetite for smaller transactions by traditional European RBL (reservedbased lending) providers, combined with the near cessation of subordinate and mezzanine solutions by banks, is already exacerbating the dwindling supply of credit. -----------------------------------------------------------------------John M. Sachs is a Director at Taylor-DeJongh. ------------------------------------------------------------------------

This will be a year that further validates the old adage “Cash is King”. From a commercial and financial perspective, we expect many small and mid-cap international oil and gas (O&G) companies outside the U.S. will face constrained access to capital and there will be an increased level of M&A and farm-in opportunities for larger, well capitalized companies.

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Equity markets are similarly precarious at the moment for many of the SME O&G companies, with many companies being valued at a substantial discount to risked NAV (often 30%-60%). Further, the FTSE AIM All-Share Index, often the default market for SME O&G companies, shows that only approximately £49m was raised in Q3 2012, one of the lowest quarterly amounts since 2009. Farm-ins and mergers and acquisitions will remain another path to access capital.

Non-traditional alternative capital pools, especially the highly liquid Islamic markets within the GCC (Gulf Cooperation Council) region and SE Asia, are a promising source of structured asset backed debt, mezzanine or hybrid capital. The Islamic market is estimated to be growing at a compounded annual rate of 15-20% per year. Oil & Gas is a well suited and familiar asset class to shariah investors, and many SME O&G companies may turn to investment banks with know-how and access to this pool of capital in 2013. 2013 looks to be an interesting and challenging year for SME O&G companies, but only resourceful organizations will come out the winners by the end of the year.

Company: Taylor-DeJongh Name: John M. Sachs Email: jsach@taylor-dejongh.com Web: www.taylor-dejongh.com Address: 1101 17th Street NW, Suite 1220, Washington DC 20036, USA Telephone: +1 202 775 0899

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This has been an exceptionally busy quarter for us and our clients - we have advised on deals in the services sector, manufacturing and production sectors. In MDD, the more complex deals are those where there is no previous history to draw on, where, for example, a new team is proposed, as in a BIMBO, or where there is a need for a team to work across national boundaries for the first time. These are the deals where our expertise in predicting what people will be able to do is particularly relevant. Duration and complexity do not appear to be correlated; recently we have seen some deals take months to complete, whilst others have been agreed in a matter of weeks. This may be because investors are taking more time to do initial due diligence inhouse, and phasing their DD processes so that they can assure themselves that the deal is viable before moving to the next stage. We see a lot of confidence in our market, which has been steadily improving for some time - because the majority of our clients are UK based PE firms investing in UK based companies, the economic problems of continental Europe and elsewhere have not affected us this quarter.

-----------------------------------------------------------------------Annie Gray, co-founder of Highwire Consulting, and with Sandra Aldridge, are both Business Psychologists and partners in the firm. ------------------------------------------------------------------------

Highwire provides Management Due Diligence advice to investors in the SME market in the UK We help our clients to make business decisions about -----------------------------------------------------------------------Zemedeneh Negatu is the Managing Partner and Head of Transaction Advisory Services at Ernst & Young, Eastern Africa. ------------------------------------------------------------------------

Mr Negatu explained that GDP growth in East Africa in FY 12 ranged from around 3.2% in Uganda to a high of over 8.0% in Rwanda and Ethiopia. For FY 13, most East African countries are expected to have slightly lower growth rates due to global uncertainties such as the Eurozone crisis and also, in a few cases, due to local country level factors. Commenting on the timing for completion of transaction deals, Mr Negatu noted that it takes from a few weeks to over a year depending on the size, complexity and sector. FMCG deals tend to close more quickly, whereas large expensive infrastructure deals take much longer. During Q4, Mr Negatu stated that FMCG deals have shown the most investment activity, but infrastructure, in particular the power sector, is attracting interest. With regards to regulations, Mr. Negatu said “every country in the East Africa region is continuously reviewing its regulations especially with the view of attracting FDI,. “For example, focus of regulatory reform include ease of doing business in customs regulations, contract enforcements and establishing a company. In this regard, countries have made noticeable improvements, for example Rwanda

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people, by enabling them to understand where there may be hidden potential in the management team, what risks the individuals or the team as a whole might pose, and how these can be mitigated if the deal goes ahead. We put the business at the heart of our work and we assess the fit between the person’s capabilities and the business strategy being pursued.

is amongst the top reformers in the World Bank’s latest ease of doing business ranking.” Mr Negatu explained that one of the major economic policy focuses in the region is to reduce inflationary pressures. “The focus has started to achieve the intended objective since inflation has decreased to single digits in virtually all East Africa countries. Even in Ethiopia, it has decreased to 15% from around 39% a year earlier. We are forecasting single digit inflation for all countries in the region for FY 13. EY’s analysis of the World Bank’s “Ease of Doing Business” indicates that 33% of the top 30 economies that improved the regulatory environment for business the most over the past five years were in sub-Saharan Africa and Rwanda, from the East Region, was the top reformer. “Furthermore, 16 African countries rank ahead of Brazil and 17 ahead of India on the Ease of Doing Business rankings and 13 African countries rank higher than India, and 34 higher than Russia, in Transparency International’s Corruption Perception Index,” added Mr Negatu. “This has resulted in a noticeable increase in FDI especially from China, India, the Middle East and increasingly, from the Developed economies led by Private Equity firms from Wall Street and the City of London and multinational FMCGs.”

Company: Highwire Consulting Name: Annie Gray Email: annie@highwireconsulting.co.uk Web: www.highwireconsulting.co.uk Telephone: +44 20 8332 6937

Commenting on the impact of the Eurozone economic crisis, Mr Negatu stated that the Eastern Africa region is trade and investment linked to the Eurozone and the emerging giants of Asia including China. “Therefore, slowdown in these regions is bound to have an impact on Africa although the impact has been somewhat more limited than expected. For example, FDI and trade volume with China appears to be comparable with prior years. But there has been a decline in trade and FDI with the Eurozone except perhaps investments in the oil & gas sector especially in East Africa which is experiencing world-class discoveries.”

Company: Ernst & Young Name: Zemedeneh Negatu Email: Zemedeneh.Negatu@et.ey.com Web: www.ey.com Address: Bole Road Mega Building 11th Floor, Addis Abeba, Ethiopia, P.O. Box 24875 Code 1000

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in Kilembe, Western Uganda. FMO is to provide US$12mn of the total, while the Emerging Africa Infrastructure Fund, DEG and Finnfund will provide US$6mn, US$4mn and US$2mn, respectively. South Asia Energy Management Systems is developing the 14MW plant. - The process for selecting advisors on the proposed refinery and related infrastructure is underway which will include the development of a pipe line to the East African coast among other things. - The Uganda National Roads Authority has announced that the construction of a new six-lane highway between Entebbe and Kampala commence in fourth quarter of 2012. The 51 kilometre (km) highway will be constructed by Chinese construction company China Communication Company, with completion due by September 2015. It is intended to reduce traffic congestion and travel times between the two locations. The Chinese government has provided a total of US$350mn for the project, while its Ugandan counterpart has contributed US$100mn.

-----------------------------------------------------------------------Brian Kaggwa is the Senior Partner and head of the Energy, Resources, Infrastructure & Project finance team at Impala Legal, Advocates & Consultants. ------------------------------------------------------------------------

Mr Kaggwa explained that Impala Legal has built a team that has developed a culture of ensuring that the firm understands its clients various diverse businesses and how to deliver solutions that advance their business priorities. “We have made noteworthy contributions to a variety of sectors which change the conversations about our brand’s capability in the corporate circle,” he commented. “The majority of our clients are foreign owned entities and individuals who recognise that we have extensive expertise in diverse value structures, cultures and business practices in acting as a natural conduit between the expectations of international business and the reality of doing business locally and successfully. We seek for our clients to put our knowledge and understanding of Uganda to work for them. “As advisors to regulated sectors and the like, we interact on a constant and close basis with the Ugandan government and the majority of departments and institutions and therefore able to bring this experience, and his extensive experience in handling public and private sector contacts gained thereby, to the benefit of our clients.. “We not only help our clients smoothly navigate the terrain paths of doing business locally, but also go out of our way to make sure that their businesses are successful.” Mr Kaggwa noted that Uganda’s economic growth was expected to slow down this year as the country sought to tighten its fiscal and monetary policies due to the effects of the global slow-down. The Central Bank, in its monetary policy statement for November 2012, projected that the GDP will increase by 5.05.5% in 2012/2013, though this is below the country’s recently consistent range of potential of 6.5-7% and down from 6.4% in 2011.

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“The Central Bank deserves credit for having managed the disinflation as a means of restoring macroeconomic stability,” he said. “Uganda’s year-on-year inflation rate went down to 27% in December from 29% a month before from an 18 year high of 30.5% hit in October, as food prices fell. “This quarter has gone according to the prediction of the Central Bank inflation having been significantly brought down by 2012 quarter by the implementation of a tight monetary policy stance. The current UBOS, Consumer Price Index, the official measure of inflation, evidences the accuracy of the central bank forecast as it records the current inflation rate at 4.5%. However, Mr Kaggwa observed that foreign investment continues to drive the Ugandan construction and infrastructure sector in the face of weak underlying indicators. Large natural resources attract new projects and developments despite some challenges such as corruption, fluctuating currency and infrastructure weaknesses. “The construction industry is expected to reach a value of US$2.9bn in 2012, although this will translate into real year-on-year (y-o-y) growth of -2.3%,” he commented. “However, the sector is expected to rebound, with y-o-y growth averaging 10.8% between 2013 and 2016. By the end of this period, industry value will reach US$6.6bn.” Key developments noted by Mr Kaggwa in the sector include: - The first of five turbines totalling 250MW at the Bujagali hydropower plant in Uganda was connected to the country’s grid. This new addition to the grid will decrease the existing supply gap. The ministry is assessing final bids for the development of the Karuma hydropower project at Karuma falls, located on the Nile River. The project is to cost approximately US$2.2bn and have a power generation capacity of 700MW. - The Netherlands Development Finance Company (FMO) arranged US$24mn in financial support for the construction of a run-of-river hydropower project

“Uganda maintains a positive outlook with economic growth forecasts of 7.1% against the back of evidence that high inflation and tight monetary policy,” said Mr Kaggwa. “Uganda is expected to enjoy a robust real GDP growth once oil revenues come into play, which will be in 2014-15. Further on and once the resource minerals are also exploited following the recently concluded seismic data collection, the potential revenues from that are likely to play a major part as a source of revenue.” Looking at 2013 and beyond, Mr Kaggwa believes that Uganda faces exciting challenges in the years ahead. He noted that the economy has delivered, over the last 20 years, consistent and robust real economic growth which has led to a doubling of per capita incomes. The country now has the opportunity to build on this platform and accelerate structural transformation. “The focus of our efforts should be to strengthen the incentives for raising productivity, so that continuous increases in efficiency become the driving force of growth and development. Competitive markets and a stable macro economy provide the foundations for such a transition. The resources earned from the production of oil and minerals can make a vital contribution to enhancing productivity in the economy, but only if they are managed and invested in a very sound manner. The exploitation of natural resources raises the premium on economic management and economic governance,” he concluded.

Company: Impala Legal, Advocates & Consultants Name: Brian Kaggwa Email: bkaggwa@impalalegal.com Web: www.impalalegal.com Address: Impala Chambers, 6 Kanjokya Street Kololo Hill, Kampala, Uganda Telephone: +256 414 234519 +256 414 598667 +256 312 371690

ACQUISITION INTERNATIONAL

13/12/2012 18:02:02

SECTOR SPOTLIGHT: Q4 Report

Dave & Girsih & Co., is a law firm practicing in the areas of International Finance and Corporate law with offices in Mumbai and Bangalore and associate offices in Delhi and Hyderabad. The firm has historically pioneered many innovative transactions and continues to ace the field of financial laws. “An experience of over thirty years of practice in India coupled with a Master Degree from Northwestern University, School of Law, Chicago adds to our capacity to deliver good and reliable services to our clients,” commented Ms Bhide. “D&G has built a reputation in the field of banking and corporate laws over the years.” Ms Bhide noted the following notable deals from the last quarter: • -----------------------------------------------------------------------Mona Bhide is the Managing Partner at Dave & Girish & Co. ------------------------------------------------------------------------

Ms Bhide is in charge of international finance, corporate law, securities and private equity transactions, structured finance, securitisation, swaps, project finance, derivatives, mergers and acquisitions, and restructuring. Dave & Girish & Co was founded in the year 1978 by the late Mohanlal Dave who specialised in banking and securities documentation. Late Mohanlal Dave was also awarded a citation by the Government of India for translating the Constitution of India in Sanskrit.

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• •

The acquisition of the fuel dispenser division of Aplab by Tokheim (a French company) The acquisition of EFTEC Group of Switzerland of the chemical company in India from the Shroff Group A cross broder loan to ICICI Bank (Hong Kong) branch from OeEC Bank in Austria.

She stated that the timelines for deals depend on the skills of the lawyers handling the matters and the skills that they possess for negotiations. “It can take any time between three months to a year to close a private equity investment transaction,” she explained. “Most deals are equity funded from offshore and structured as joint ventures or shareholding arrangements.”

According to Ms Bhide, the sectors showing the most investment and growth in India in Q4 are the chemical industry and technology developments, as well as franchises, consumer durables, branded sale outlets, and legal documentation work. Discussing regulation, Ms Bhide stated that she is expecting a change in the limit of foreign investment in the retail sector. She believes that the overall attitude regarding growth and deal opportunities in India has improved since Q4 2011, however new tax law could slow down foreign investment. Despite this, the ease of doing business in India has improved in Q4. “In fact many multinational companies who set up subsidiaries in India are also financed by offshore banks as well as Indian banks,” she concluded.

DAVE & GIRISH & CO. Advocates

Company: DAVE & GIRISH & CO., Advocates Name: Mona Bhide Email: mona@davegirish.com Web: www.davegirish.com Address: 1st Floor, Sethna Building, 55, Maharshi Karve Road, Marine Lines, Mumbai -400 002, India Telephone: +91-22-2206 2132 / 92 Fax: +91-22-2208 5620

December 2012 /

13/12/2012 18:02:10

SECTOR SPOTLIGHT: Q4 Report

“We are confident that a few deal opportunities will develop.” “In the fourth quarter, there were more political reforms introduced in our areas of interest that will lead to attracting new investments especially in the power sector.” Mr Alkaf stated that the ease of doing business in Sahra’s areas of interest improved dramatically, however the regional and international major catastrophes i.e. the Eurozone debt crisis, economic slowdown in China and India, and the Arab Spring all had an impact in one way or another on business and deal making.

-----------------------------------------------------------------------Jamal Alkaf is the Managing Director and Head of Legal at Sahra Petroleum Consulting (Sahra). ------------------------------------------------------------------------

Mr Alkaf manages and looks after the whole spectrum of the business, with a special focus on the legal department. Sahra acts as a boutique company specialising in providing a synergised set of consulting and advisory services in legal, technical and financial aspects of petroleum (oil and gas), power, minerals and a wide range of related industries. “I can comfortably say that we, the first among equals if not the best, nevertheless to be fair we are pursuing a niche opportunity that stand picking up with a healthy growth,” commented Mr Alkaf.

74 / December 2012 AI Magazine 1212.indd 74

He explained that there was some stagnation during the last quarter due to the world economic situation and the regional political atmosphere, but hopes that by next year there will be some improvement. The time and duration for deals to complete in Yemen varies according to the size and complexity of the deals, and they are normally funded by the investor(s) itself (fully or partially) and/or through financiers – this depends entirely on the size of the deal. Mr Alkaf noted that the oil, gas and power sectors currently show the best growth and dynamics, adding that Sahra is involved in some of the deals in these sectors. “The general investment attitude in the region is improving after a period of calm,” he commented.

Looking ahead to 2013, Mr Alkaf hopes that there will be some growth in GDP. He does not expect big leaps, but slight improvement in the region.

Company: Sahra Petroleum Consulting Name: Jamal Alkaf Email: jamalalkaf@sahraconsulting.com Web: www.sahraconsulting.com Address: Hadda District, P O Box: 15228, Sana’a Republic of Yemen Telephone: +967 (1) 428 149 Fax: +967 (1) 428 150

ACQUISITION INTERNATIONAL

13/12/2012 18:02:16

SECTOR SPOTLIGHT: Q4 Report

OTHER EXPERTS IN THIS AREA

Company: Expertise Business International Corporation Name: David Luboya Kayaya Email: ebicorporation@gmail.com Web: www.ebicorporation.jimdo.com Address: Bd Mâ&#x20AC;&#x2122;siri commune de lubumbashi Telephone: +243 997240362/083216604

ACQUISITION INTERNATIONAL

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December 2012 /

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SECTOR SPOTLIGHT: Q4 Report

76 / December 2012 AI Magazine 1212.indd 76

ACQUISITION INTERNATIONAL

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SECTOR SPOTLIGHT: Q4 Report

-----------------------------------------------------------------------Soteris Pittas is the Managing Director of Soteris Pittas & Co LLC. ------------------------------------------------------------------------

SOTERIS PITTAS & CO LLC is a boutique law firm, in size only, focusing on the areas of law related to business activity and dedicated to providing its clients with outstanding, highly personalized, legal representation. The lawyers and associates of the firm with their combined skills-set and knowledge can provide comprehensive legal solutions according to the clients’ particular business needs, requirements and objectives. The Firm is committed to representing its clients at all stages of disputes, including negotiation, mediation, arbitration, and litigation, in order to secure just compensation and legal vindication. The Firm has close links and strong associations with reputable audit firms, private equity managers, and fiduciaries in Cyprus, Russia and the former CIS countries. AREAS OF PRACTICE: • Corporate & Commercial Litigation • International Business Transactions • International Tax Planning • International and domestic Arbitration • Corporate and M&A • Intellectual Property • Banking and Finance • Corporate services • Admiralty and Maritime LANGUAGES SPOKEN: • English • Greek • Russian

ACQUISITION INTERNATIONAL

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PARTNERS: • Sotirios Pittas • Soteris Flourentzos MEMBER OF: • Cyprus Bar Association, • International Bar Association • Chartered Institute of Arbitrators OTHER OFFICES: • Limassol • Larnaca Soteris Pittas was born in 1960, in Nicosia, Cyprus. He graduated from Athens University in 1984, obtained his L.L.M. (Commercial & Corporate Law) from the London School of Economics in 1988 and was admitted to the Cyprus Bar in 1989. From 1989 until 1994 was an associate in the Lawfirm of Andreas Neocleous& Co and from 1994 until March 2002 he was a Partner and the leading litigation lawyer of the said law firm dealing with international trade law, trusts and equity, company and partnership disputes and all insurance and admiralty claims.

Corporate and Commercial Law (local and international), Stock Exchange, Capital Markets, Mergers and Acquisitions, Commercial and Criminal Litigation, Commercial Litigation, Arbitration, International Tax Planning, Insurance Law; Admiralty; European Law. Mr. Soteris Pittas has been involved in numerous complex commercial litigation and arbitration cases and in large cross-border litigation disputes. He has also been involved in numerous projects of merger and acquisitions. Mr. Soteris Pittas is an Associate Member of the Chartered Institute of Arbitrators of United Kingdom and a Honorary Member of the Association of Fellows and Scholars of the Center for International Legal Studies of Austria and of International Bar Association (IBA). He has contributed numerous articles in various legal magazines and online media and he is the author of a number of publications. He is fluent in Greek and English.

Mr. Soteris Pittas joined the firm of PATRIKIOS PAVLOU & CO on April 2002 as a Partner and he was in charge of the Commercial Litigation and Arbitration Department of the Firm until November 2009. On December 2009 Mr. Soteris Pittas established the boutique law firm SOTERIS PITTAS & CO L.L.C. and since then he has been acting and he is the Managing Partner. His expertise includes: International Trade Law, Trusts and Equity Banking and Finance, Company,

Company: Soteris Pittas & Co LLC Name: Soteris Pittas Email: spittas@pittaslegal.com Web: www.pittaslegal.com Telephone: +357 25 028460 Mobile: +357 25 028461

December 2012 /

13/12/2012 18:02:33

SECTOR SPOTLIGHT:

The Growth of Litigation Funding

THE GROWTH OF LITIGATION FUNDING

l Litigation funding is enjoying something of a booming market and in the UK alone it is an industry backed by up to £500m of investor cash looking for lucrative courtroom opportunities. Dispute resolution is a costly process especially when it involves court proceedings; even relatively straightforward cases can take a long time to resolve and the initial investment required by a company is daunting. Conditional fee arrangements obviously exist but even the big law firms have to keep an eye on their cash flow and where larger claims are concerned, it’s not always possible to offer ‘no win, no fee’. This, coupled with surging legal expenses has encouraged claimants to find alternative means of controlling excessive costs and by using third-party funders they can reduce their liabilities in exchange for taking a reduction in any eventual award.

EXPERTS IN THIS AREA Company: Law Cash Name: Harvey R. Hirschfeld Email: hhirschfeld@lawcash.net Web: www.lawcash.net Address: 26 Court Street, Suite 1104, Brooklyn, NY 11242 Telephone: +1 718 875-0605

78 / December 2012 AI Magazine 1212.indd 78

ACQUISITION INTERNATIONAL

13/12/2012 18:02:41

AMSTERDAM ∙ AMERSFOORT W W W. M E N D . N L

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

AI Magazine 1212.indd 79

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DEAL DIARY:

M&A from around the world

DEAL DIARY — Deal index 81

ACROTEC

LANSERIA

BALNAK LOJISTIK

LYOFAL/IDD-TECH ORLEANS

BUNNING STORES

RENTAU DEDAP

ENDOCOAL

SENIOCARE

ESMALGLASS-ITACA

UNEME IPO

EXPORT TRADING GROUP

UNITED SPIRITS LIMITED

FOODCORP

HEDRICH

KLEFFMANN

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86 86

VIVACY

WARSAW FINANCIAL CENTER

ACQUISITION INTERNATIONAL

13/12/2012 18:02:43

DEAL DIARY:

M&A from around the world ACROTEC

Acrotec, an independent group created by watch and micromechanic industry professionals, manufactures small and complex components including shock absorbers, regulator assemblies, oscillating weights, mainsprings and barrels. Acrotec’s clients include the most well-known Swiss watch brands and manufacturers. The diversity and power of the group’s production capabilities also allow it to respond to the needs of the medical, connectivity, automobile and aeronautic sectors. With more than 300 employees, Acrotec generates an annual turnover of over CHF70 million. The different companies that compose the Acrotec group (KIF Parechoc, Générale Ressorts, Décovi, and Vardeco) are all leaders in their respective niches, possessing the ability and technical excellence required to develop finished modules for watch movements in line with the precise and exclusive requirements of their clients. Quilvest’s investment of over CHF30 million in the capital of Acrotec coincides with the exit of funds managed by EPF Partners, which had been a shareholder in the group since 2006. Vischer represented Quilvest and its acquisition vehicle in the firm’s first transaction with Quilvest. Stéphane Konkoly, Partner (M&A, co-head of the Banking&Finance group), led the Vischer team, which included Janusz Marty, Associate. Mr Konkoly commented: “The main challenges were the legal complexity and tax impacts of the deal structure as originally proposed by the target. We assisted Quilvest in restructuring the transaction, thus avoiding legal traps and insecurity and allowing Stéphane Konkoly for a more efficient tax treatment of the deal. “The structure of the shareholding rendered the closing of this transaction (in terms of documents to produce and organisation) quite challenging.”

ACROTEC WELCOMES QUILVEST AS NEW CORNERSTONE SHAREHOLDER

Landwell

BUNNINGS STORES

l On 2 November 2012, Borusan Lojistik, a subsidiary of Turkish conglomerate Borusan Holdings, has agreed to purchase a 100% direct and indirect stake in Balnak Nakliyat, which provides international and domestic logistics services including land, rail, sea and air transportation, logistics services, and warehouse, bonded warehouse and pharmaceuticals warehouse management, for clients in the consumer goods, retail, textile, automotive, pharmaceuticals, chemicals and petrochemicals sectors among others.

l Charter Hall Group (ASX:CHC) (Charter Hall or the Group) today announced that jointly with Telstra Super, it has entered into a contract to acquire a national portfolio of recently completed Bunnings Warehouse retail stores for $176 million from Bunnings. Charter Hall and Telstra Super have also agreed to acquire a $30.7 million Bunnings anchored property at Stafford in metropolitan Brisbane from the Charter Hall managed Direct Retail Fund.

Tayfun Pişirir

‘‘

KPMG commented: We performed vendor financial due diligence services and vendor tax due diligence services. The finance team was led by Tayfun Pişirir, a transactions and restructuring partner in KPMG and the tax team was led by Eray Büyüksekban, a M&A tax director in KPMG.

The combined $207 million portfolio purchase reflects an initial acquisition yield of 7.6% post acquisition costs and provides 3% per annum rental increases. The Stafford property has further expansion potential and benefits from a weighted average lease expiry (WALE) of 8.5 years. Piper Alderman’s team was led by Lexia Wilson, partner in the Property and Projects team.

We represented Balnak on this deal and we have got a long standing working relationship with them as KPMG is their auditors.

It was a highly confidential project within the vendor side and we performed the due diligence with access to very few individuals in Balnak. Also Eray Büyüksekban publicly available data on Logistics Industry to be factored into sales and profitability analysis is limited and that was a challenging factor for which we had to rely on management accounts. It was also a fastly moving process where we continuously were in contact with management, investment advisors during both the due diligence and factual accuracy process.

‘‘

l Acrotec, a market-leading group in the manufacturing of watch components, has welcomed the family-owned Quilvest Group as its new cornerstone shareholder. The group remains under the control of its current management, which is delighted by the backing of Quilvest in supporting its long-term development plan.

BALNAK LOJISTIK

Alexander Gross, Director at Merrill DataSite, supported provision of the virtual data room used throughout the due diligence phase of this deal. He was brought into the project by Raiffeisen Investment, based in Istanbul, with whom he has a long standing relationship. Alexander Gross This project involved both Turkish and English speaking Merrill DataSite project managers, who secured over 20,000 pages of confidential information. Bidders were able to review critical company information in the VDR, facilitating a successful and speedy conclusion to this international transaction, which has now led to the creation of the largest logistics player in Turkey, with combined revenues of US$600m.

BORUSAN LOGISTICS ACQUIRES A 100% STAKE IN BALNAK FROM TURKISH SHAREHOLDERS AND ALFA CAPITAL PARTNER

Lexia Wilson

Piper Alderman advised Charter Hall Group and Telstra Super on the acquisition.

Lexia Wilson has acted for Charter Hall on a number of significant property transactions in the past. These have included the acquisition of 167 Macquarie Street, Sydney, the acquisition, financing and development of the Coles Perth Distribution Centre and a significant number of acquisitions and developments for the Charter Hall Core Plus Industrial Fund and the Charter Hall Direct Industrial Fund. The assets were located in different jurisdictions and it was necessary to ensure that any jurisdictional legislative differences were overcome so that the assets could be acquired simultaneously on a portfolio basis. The deal is a partnership between Charter Hall Group and Telstra Super worth $207m and is due to complete in the last quarter of 2012. CHARTER HALL AND TELSTRA SUPER ACQUIRE $207 MILLION BUNNINGS RETAIL PORTFOLIO

Vendor Due Diligence Provider

Virtual Data Room Provider

VISCHER Legal Adviser to the Vendor

Athemis

Vendor Due Diligence Provider

Financial Adviser to the Vendor

Legal Adviser to the Purchaser

Aritman, Yildirim, Aksun Law Firm Financial & Tax Due Diligence Provider

Legal Adviser to the Vendor

JPH Hottinguer ACQUISITION INTERNATIONAL

AI Magazine 1212.indd 81

December 2012 /

13/12/2012 18:02:54

DEAL DIARY:

M&A from around the world ENDOCOAL

ESMALGLASS-ITACA

EXPORT TRADING GROUP

l U&D Mining Industry, a joint venture between a unit of China Yima Coal Group and fertiliser manufacturer Daton Group Australia, has announced that it will acquire coal exploration and development company Endocoal for A$71m.

l 3i, an international investor, and funds managed by 3i, have today announced their divestment of Esmalglass-Itaca (“Esmalglass”), a leading global supplier of intermediate products for the ceramic industry, to international investing firm Investcorp. Terms of the transaction were not disclosed.

l The Pembani Remgro Infrastructure Fund and Global Alternative Asset Manager The Carlyle Group (NASDAQ: CG) today announced that they will make a strategic minority investment $210 m in Export Trading Group (ETG), an African agricultural commodities supply chain manager. This is the first investment by Carlyle’s Sub-Saharan Africa Fund and the Pembani Remgro Infrastructure Fund. Standard Chartered’s Africa Private Equity division (SCPE), the first private equity investor in ETG, is increasing its investment from January 2012 and ETG’s founders have also subscribed for additional equity. The transaction is expected to close in November 2012.

‘‘

Leading the team was Mr John McIntyre, Director of BDA. He commented: BDA represents EndoCoal, providing independent expert technical opinion to Ernst & Young. BDA is a specialist technical advisory group and has provided many similar independent opinions. IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk.

In 2002, 3i and the management of Esmalglass acquired 100% of the company, in the largest MBO in Spain that year. 3i took a 49% stake in a deal valued at €230 million. Since then, 3i has worked closely with the management team to develop the company’s strategy. This included the 2004 acquisition of the remaining 40% of Itaca, a subsidiary of Esmalglass involved in colours manufacturing for the ceramic industry, that it did not yet own. This acquisition established the company as one of the leading worldwide producers in technology, products, technical assistance and design.

‘‘

Cuatrecasas, Gonçalves Pereira advised all shareholders of the Esmalglass Group on divesting from it. The majority shareholder was 3i, a client with a long-standing working relationship with Cuatrecasas, Gonçalves Pereira. Dr. María José Guillén Cuatrecasas, Gonçalves Pereira partner Dr. María José Guillén (corporate law) led the deal.

‘‘

Behre Dolbear Australia (“BDA”) was retained as the Independent Specialist to provide technical advice to Ernst & Young, as the Independent Expert, on the technical aspects of the transaction, and to provide valuation of the coal exploration assets. BDA specialises in technical due diligence, advisory and review work John McIntyre for companies and financial institutions on mining and resource projects and has been involved in numerous mining-related studies, valuations, prospectuses and Independent Engineer assignments in recent years. A large proportion of BDA’s work relates to independent technical review of project proposals and feasibility studies on behalf of the prospective lenders and financiers.

Established in 1978 in Villareal, Spain, Esmalglass produces high quality ceramic glazes and colours as well as inkjet inks, an innovative and rapidly growing product used to decorate tile surfaces. Esmalglass products are sold to more than 450 customers worldwide. The company employs more than 1,000 staff and its global activities are supported by manufacturing and mixing plants in Spain, Brazil, Portugal, Italy, Russia, Indonesia and China, as well as large design and technical assistance teams in all the major ceramic markets across the world. In 2011, Esmalglass generated a turnover of approximately €270 million.

Leading the team at Linklaters was Stuart Bedford, who is the Asia head of corporate. Assisted by managing associate, Jaimie Cheung, and, associate, Oliver Evans.

‘‘

We were representing ETG – we first encountered ETG when we acted for Standard Chartered on its initial investment. Since then we have advised them on another financing and certain commodities-related work. Stuart Bedford

As a commodities trader, ETG has turnover and/ or an operating presence in a very large number of jurisdictions – principally in Africa, but also in Asia and Europe. With the proposed joint control arrangements between Standard Chartered, Carlyle and Remgro, there needed to be a wide-ranging review of the anti-trust implications (as a significant proportion of African countries now have active merger control regimes). As a result of that review and in order to enable the transaction to proceed on its original timetable, it was necessary to re-structure the investment and provide the PE investors with a right to elect for additional equity and greater control based on the FY13 profitability of ETG.

‘‘

Gilbert + Tobin is advising Endocoal Limited on the recommended offer by U&D Mining Industry (Australia) Pty Ltd for 100% of the shares in Endocoal for the approximate value of $71 million. Led by corporate advisory partner John Williamson-Noble, the proposed takeover by scheme of arrangement has John Williamson-Noble been unanimously recommended by Endocoal’s Directors subject to a superior proposal emerging and the appointed independent expert concluding the scheme is in the best interests of shareholders. Completion of the transaction is subject to a number of conditions including the approval by regulatory authorities in Australia and in the People’s Republic of China.

ETG is a great example of the sorts of growth capital PE deals that are now being undertaken in Sub-Saharan Africa – it shows the developing maturity of the PE story in that region and the importance of the PE houses as a source of funds as the relevant economies further develop.

The main challenges of this deal derived from there being a large number of shareholders (12), with different profiles and interests. The deal was completed on May 31, 2012, when all the financial and economical conditions the parties agreed on were met. These conditions were very much bound to Spain’s current economic situation.

U&D MINING INDUSTRY TO ACQUIRE AUSTRALIA’S ENDOCOAL

3I EXITS ESMALGLASS-ITACA

PEMBANI REMGRO INFRASTRUCTURE FUND, THE CARLYLE GROUP AND STANDARD CHARTERED PRIVATE EQUITY INVEST $210M IN EXPORT TRADING GROUP

Technical Expert

Legal Advisers to 3i

Legal Adviser to the Purchaser

Virtual Data Room Provider

Cuatrecasas,Ojeda M&A Adviser to Investcorp

Legal Adviser to the Equity Provider

M&A Adviser to 3i

Independent Expert

M&A Adviser to Investcorp Legal Adviser to the Vendor

Anjarwalla & Khanna Financial Due Diligence Provider & Tax Adviser

Financial Adviser to the Vendor

82 / December 2012 AI Magazine 1212.indd 82

Legal Advisers to Investcorp

ACQUISITION INTERNATIONAL

13/12/2012 18:03:03

DEAL DIARY:

M&A from around the world

Rainbow, which is South Africa’s largest processor and marketer of chicken, on Wednesday announced its plans to buy a 64.2% stake in Foodcorp, which is South Africa’s third-largest food producer, for R1.037bn.

‘‘

We have been positioning ourselves for some time now to look for other branded opportunities outside of the poultry area, Mr Dally said. Rainbow is a 73.4% subsidiary of Remgro, the investment holding company of the Rupert family. Avior Research equity analyst Jiten Bechoo said the acquisition was a good diversification away from the “bleak” prospects of the poultry business. Foodcorp’s range of products includes Yum Yum peanut butter and Ouma Rusks. The company also manufactures and sells convenience, ready-to-eat products for Woolworths and other retailers. Rainbow will conduct a rights offer‚ fully underwritten by Remgro‚ to contribute funding for strategic growth opportunities, including the Foodcorp transaction. Peter McCrystal

Foodcorp’s revenue for the year ended August 31 amounted to R6.9bn. The PwC team was led by Peter McCrystal (Engagement Partner) and Andreas Welke (Associate Director).

Andreas Welke

PwC provided vendor assistance services to Foodcorp, and has previously assisted the group with similar services .

Hedrich Group is a family-owned worldwide acting group of companies. With its subsidiaries, the company develops and manufactures production equipment and complete production lines. Its customers range from the electrical and electronics industry, automotive industry and chemical industry. They are offered customised and innovative technical products as well as services meeting with their entire chain of requirements. Their benefit: receiving all Hedrich system solutions from one source, in highest quality, worldwide. Being active in more than 30 countries, the company employs more than 270 people and fuse under one umbrella internationally acting companies. Its equipment and solutions for automation exactly match with each other. All customers can be assured that with Hedrich Group’s products they will obtain top quality, top innovative, best reliable and safe equipment and services. Ruhmann Peters Altmeyer, a partnership enterprise domiciled in Wetzlar, has given the vendor both tax and legal advice and support in the course of the transaction and been closely involved in the entire due diligence process. Ruhmann Peters Altmeyer had already been advising the Hedrich-group on all questions of commercial law for several years. By way of preparation for the transaction, the partnership executed a complete restructuring of the group and was closely involved in the legal and tax aspects of it. Dr. Ingo Peters (lawyer and notary) and Mr. Thorsten Straßheim (lawyer) led the Ruhmann Thorsten Straßheim Peters Altmeyer team for the transaction, providing overall co-ordination covering the legal due diligence, giving the vendor legal advice which included the SPA contract negotiations and the land purchase contracts. Mr. Thomas Ruhmann (Business graduate, auditor and tax adviser) was closely involved in the tax and financial part of the due diligence as well as in the transaction.

l The corporate history of Kleffmann GmbH makes impressive reading. Within a short time the company, founded in 1990, has made a name for itself as the world’s leading provider of market research in the agricultural sector. For the current financial year the Kleffmann Group, which employs over 350 people, expects a turnover of approximately € 21.0 million. In addition to the corporate headquarters in Lüdinghausen, the company has another 17 subsidiaries around the world at locations including Brazil, China, Russia, Australia and the USA.

‘‘

A prerequisite for this corporate development was to put the quality of our global data collection and our long-standing expertise in agribusiness based data analysis skills at the heart of our daily work. This will continue to be our number one priority, says Burkhard Kleffmann, managing partner of Kleffmann Group, summarising the success story. To continue the business growth of the past into the future, the company intends to increase the size of the company further through targeted internationalisation, especially in Asia and Africa, in addition to the organic growth in existing markets. To implement this strategy we have found with NORD Holding a majority shareholder whose partnership approach towards SMEs fits and speaks our language, adds Kleffmann.

‘‘

Matthias Kues, chief executive officer of NORD Holding says: We have purposefully invested in the agricultural sector. It is one of the most interesting future markets. A more professionalised food industry can make a vital contribution towards solving the world’s food problem. Long decision-making and communication paths are unknown to the company. The Kleffmann Group today thus represents an ideal platform for organic and external growth. We are pleased to be able to take the second step of business development together with the founder.

‘‘ ‘‘

Rising commodity prices, inflation and surging chicken imports from Brazil have put pressure on local poultry players forcing them to look at other avenues of growth.

l Quadriga Capital has backed the management buyout of Hedrich Group, a leading manufacturer of specialised production equipment for the electronics industry.

KLEFFMANN

‘‘

l RAINBOW Chicken’s acquisition of Foodcorp will enable the group to broaden its range of brands and categories to counter the cyclical nature of the food industry, and become a food player with significant scale, Rainbow Chicken CEO Miles Dally said on Wednesday.

HEDRICH

‘‘

FOODCORP

‘‘

NORD Holding assigned maconda to conduct a commercial due diligence on Kleffmann Group. Inna Ivanova, maconda’s project manager: Kleffmann Group is operating on a global scale in a niche market which is barely covered by any market studies. Moreover, the served regional markets are hardly comparable, neither in terms of client behaviour nor regarding market structure and market drivers. Accordingly, maconda conducted multitude well-prepared interviews with clients and various experts around the globe. Furthermore, the wide service sector experience of maconda, which is one of the most active German providers for commercial due diligences, contributed to the better understanding of Kleffmann’s product offering and positioning. www.maconda.de

RAINBOW CHICKEN’S ACQUISITION OF FOODCORP

QUADRIGA CAPITAL ACQUIRES ALL SHARES OF HEDRICH GROUP

Legal Adviser to the Purchaser & Legal Adviser to the Equity provider

Legal & Financial Adviser

NORD HOLDING ACQUIRES KLEFFMANN GROUP Commercial Due Diligence Provider

Financial Adviser

Financial Due Diligence Provider

Financial Due Diligence Provider & Tax Adviser Environmental Adviser

Legal Adviser to the Equity Provider

Vendor Due Diligence Provider Financing Bank

SSP-Law Legal Adviser to the Vendor

Virtual Data Room Provider Market Adviser

ACQUISITION INTERNATIONAL

AI Magazine 1212.indd 83

December 2012 /

13/12/2012 18:03:11

DEAL DIARY:

M&A from around the world

‘‘

The transaction is subject to certain conditions, including regulatory approval, Harith said in a statement. The airport’s CEO Gavin Sayce said, in the statement, that its management team and philosophy would remain unchanged. Edward Nathan Sonnenbergs Inc. (“ENS”) represented a consortium of private investors who disposed of their interest in LIA to a black economic empowerment consortium comprising , inter alios, the Public Investment Corporation and the Pan African Infrastructure Development Fund.

‘‘

The ENS team was led by commercial law veteran Stephen Lewis, a well known attorney in South Africa with a résumé of high profile M&A transactions (including the Walmart/Massmart merger). The ENS team comprised practitioners from the corporate commercial department (Heloise Murray-Chinelli, Michelle du Preez and Raashmi Govender) and practitioners from other disciplines such as competition (Mark Garden and Richardt van Rensburg) and tax (Dr. Beric Croome).

‘‘

The transaction was complex and unique and is subject to various conditions, including regulatory approval. The parties are optimistic that the transaction will become unconditional in early 2013.

ACQUISITION OF LANSERIA INTERNATIONAL AIRPORT (“LIA”)

l Hadiputranto, Hadinoto & Partners has represented Japan’s Marubeni Corp in relation to the development of the Rantau Dedap geothermal power plant project in Indonesia’s South Sumatra. Media reports have put the estimated cost of the project at $900 million.

‘‘ ‘‘ ‘‘

Jean-François Loumeau, President of SYNERLAB, said: These two acquisitions are perfect add-ons to our current manufacturing activities and are very much in line with our development strategy, which consists in developing our range of services to complement our core business. Pierre Banzet, Managing Director of SYNERLAB, added: These acquisitions will allow us to cover the entire value chain and expand our range of high value-added services. It confirms our commitment to investment, already demonstrated by our decision to develop the PHARMASTER site which will allow our sterile capacities to double for a €8 million investment. François Jerphagnon, Managing Director Small Market Enterprise Capital at AXA Private Equity, added: With these acquisitions, SYNERLAB reinforces its leading position within the contract manufacturing market. AXA Private Equity’s commitment alongside the management team over the last five years, including the closing of three build-up acquisitions, is a good example of how we bring value to our portfolio companies.

‘‘ ‘‘

The other investors were a Black Economic Empowerment consortium which included the women’s empowerment company Nozala; and the Government Employee Pension Fund (GEPF), through the Public Investment Corporation (PIC).

l SYNERLAB, a leading French pharmaceutical contract manufacturing firm, and AXA Private Equity, its majority shareholder since 2007, announce the acquisitions of LYOFAL, a company founded and managed by Jean-Luc Allemand which specializes in custom-lyophilization (freeze-drying), and IDD-TECH Orleans, a company which specializes in the formulation development of solid dosage forms. With these acquisitions, SYNERLAB reinforces its leading market position and consolidates into a company with 5 sites employing 700 people and a turnover of €85 million.

‘‘

A group of private investors who have owned and developed the Lanseria International Airport over the past 21 years have sold 100% of their shares in the airport, said one of the new owners, Sandton-based Pan African infrastructure development fund manager Harith.

RANTAU DEDAP

‘‘

l Lanseria International Airport has been sold to a consortium of investors, it was announced on Thursday 15th November.

LYOFAL/IDD-TECH ORLEANS

Pascal Vieilledent, Managing Partner led the team at Eurohold on the IDD-Tech deal. They were representing Synerlab, company who they have been advising since 2008 on other potential deals.

‘‘

They added: This is an industrial deal; thanks to IDD Tech Orleans, Synerlab is incorporating a new activity, the development; a development know-how is required in most of the production outsourcing process. www.pv@eurohold.com

SYNERLAB ACQUIRES LYOFAL AND IDD-TECH ORLEANS

Partners Abdul Haris M. Rum and Arisia Arundati Pusponegoro lead the team at Lubis Ganie Surowidjojo

‘‘

We represented the Indonesian Ministry of Finance (Fiscal Policy Office) in providing the Business Viability Guarantee (BVGL) of the national electricity utility (PLN) to the project company. Dr. Ganie We also advise the Ministry of Finance on the provision of BVGLs to other electricity projects as well as on broader Infrastructure Guarantees provided though the Indonesia Infrastructure Guarantee Fund (IIGF).

‘‘

LANSERIA

Dealing with the coordination of all of the parties is key in such transactions and required a deep understanding of the parties’ expectations, requirements, concerns, operations and business goals. Nah’r Murdono Law Office was representing PT PLN (Persero), Indonesian State Electricity Utility, the offtaker, in the negotiation of Rantau Dedap geothermal power plant transaction. Rex Panambunan, partner in Nah’r Murdono Law Office led the negotiation on behalf of PT PLN (Persero) to consummate the power purchase agreement with the consortium consisting of Marubeni GDP Suez and PT Supreme. Rex Panambunan has been representing PT PLN (Persero) in many power project transactions, including in the process of the issuance of the letter of guarantee by the Ministry of Finance. The challenges faced by the parties in this Rantau Dedap geothermal project transaction was relating to the risk allocation in the exploration period, reservoir failure and the political force majeure materially affecting the project. The other contentious issues were about the scope of risks to be covered under the government letter of guarantee which includes payment default by PT PLN (Persero) during the commercial operation of the plant and the project buyout consequence following the termination of the power purchase agreement. The involvement of Marubeni in this project is a good addition considering that they have just succeeded in completing other coal fired power project of big size in Indonesia which is now commercially operating and delivering electricity to PLN (Persero).

HHP ACTS FOR MARUBENI ON GEOTHERMAL DEAL

Legal Adviser to Synerlab

Financial Adviser to Synerlab

Hadiputranto Hadinoto

Financial Due Diligence to Lyofal

84 / December 2012 AI Magazine 1212.indd 84

ACQUISITION INTERNATIONAL

13/12/2012 18:03:18

DEAL DIARY:

M&A from around the world

Highgrowth

SENIOCARE

UMEME IPO

l European fund investor Akina has sold its majority stake in Swiss care provider SENIOcare to private equity firm Waterland.

l African Alliance Uganda Limited (AAUL) was appointed Lead Sponsoring Broker to the Umeme Limited IPO. AAUL’s role to the client ranged from attaining listing approvals from the Capital Markets Authority (CMA) and the Uganda Securities Exchange (USE), planning and executing the retail sales strategy across the country, training and overseeing activities of all selling agents during the IPO, advice on the allotment policy to be adopted and finally seeing to the successful listing of Umeme on the listing date.

Credit Suisse is one of the leading M&A advisors in healthcare services and divestitures in Switzerland and hence we were entrusted by the shareholders of SENIOcare to support them in a potential exit process. After an in-depth preparation, Credit Suisse run a highly competitive and tight sale process which was attracting significant interest from trade and financial buyers. Clear guidance on valuation expectations, interim phase for potential buyers to confirm adherence to Credit Suisse’s game plan and a focused due diligence phase allowed to close the transaction within a short period of time. The very favorable outcome of transaction demonstrates Credit Suisse’s capability in orchestrating highly competitive auction processes for medium-sized companies.

‘‘

Heinz Hasler

‘‘ ‘‘

Leading the team at Credit Suisse was Heinz Hasler - Head M&A Mid Market Investment Banking Switzerland. He commented: We were advising the shareholders of SENIOcare (Akina and Rhino Partners). There is a long-lasting relationship with individual representatives of the shareholders.

Were there any challenges faced in completing this deal? How did you assist in overcoming them? Challenging history and various “distortions” of the financials as concerns addressed straight away with credible mitigants - detailed information package/management presentation to highlight key value drivers and to focus on revenue growth opportunities for new owner.

‘‘

Credit Suisse is one of the few global investment banks which offers its services to medium sized companies in Switzerland. In its domestic market, Credit Suisse runs a fully-fledged, dedicated investment banking team focusing on mid market transactions. heinz.hasler@credit-suisse.com www.credit-suisse.com

AKINA DIVESTS SENIOCARE WITH SALE TO WATERLAND PRIVATE EQUITY Virtual Data Room Provider

The Chief Executive, Mr Kenneth Kitariko, led AAUL’s team in this transaction The transaction marked the first time in Uganda that a private entity was being listed based on a price developed from an International Book Building exercise The advisory team was charged with the task of testing the retail marKenneth Kitariko ket’s appetite for the Umeme IPO.

Phone +34 93 3630386 Fax +34 93 2183333 Mail info@hg.com.es

Doing Business in

Spain

Mrs Joan Irungu headed the operational activities of the IPO under the leadership of the CEO and with support from representatives from regional offices in South Africa, Kenya and Rwanda.

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The Umeme Initial Public Offering (IPO), which closed on 7th November 2012 with a 35% over-subscription Phillip Karugaba commented: We acted as Legal Adviser. Webber Wentzel of South Africa acted as International Legal Advisor. Anjarwalla & Khanna are acting as Legal Adviser to the listing by introduction on the Nairobi Securities Exchange (NSE) in Kenya. We conducted a legal due diligence, advised on the necessary legal steps to convert the company to public status, addressed regulatory concerns, issued the statutory legal opinion and generally advised on legal aspects of the transaction. For our team, our Partner, Phillip Karugaba, led the transaction. This is now the second largest company on the Uganda Securities Exchange. It is the first time that an entirely privately owned entity has listed on the Exchange and the first time that a Ugandan company will be cross-listing on the NSE. It is also the first IPO in Uganda with a complete dematerialization of the shares using the recently introduced securities central depositary system.

The Company Highgrowth is an independent financial company which, by means of two clearly differentiated lines of business, invests in innovative companies with growth potential, and offers them support, advice and guidance. These two lines of business are: l Venture Capital. l Financial Consultancy.

‘‘

Chris Beckmann

Chris Beckmann, Director, Merrill Germany GmbH, led on provision of the virtual data room (VDR) used for the due diligence phase on this deal. Through Merrill DataSite, Chris has a long standing relationship with the advising bank in the transaction - Credit Suisse. The process was run on a tight schedule and the VDR played an important role in meeting the timing requirements for this project.

Tuset, 20-24, 4º 5ª 08006 Barcelona - Spain

The transaction was also the first done under recently amended Capital Markets laws.

The nature of the client and the level of international interest drove a much higher standard in the IPO process at all levels

UMEME IPO OVERSUBSCRIBED Legal Adviser

Masembe, Makubuya, Adriko, Karugaba & Ssekatawa Advocates (MMAKS Advocates) Lead Sponsoring Broker

Financial Adviser to the Vendor

African Alliance Uganda Reporting Accountants

Vendor Due Diligence Provider & Tax Adviser Transaction Adviser/Book Runner

Financial Adviser to the Purchaser

ACQUISITION INTERNATIONAL

AI Magazine 1212.indd 85

International Legal Adviser

December 2012 /

13/12/2012 18:03:30

DEAL DIARY:

M&A from around the world UNITED SPIRITS LIMITED

These agreements trigger an obligation on Diageo to launch a Mandatory Tender Offer to the public shareholders of USL. Diageo has therefore also announced that it will launch a tender offer to acquire, at a price of INR 1440 per share, a maximum of 37,785,214 shares, which equates to 26% of the enlarged share capital of USL. On completion of the share purchases as described above and in the event that the tender offer were fully subscribed, Diageo will hold 53.4% of the enlarged USL share capital at an aggregate cost of INR 111,665 million (approximately £1,285 million). This represents a 20x multiple of USL’s EBITDA for the year ended 31 March 2012 and the transaction would be eps accretive in year 2 and economic profit positive in year 6 assuming a 12 % WACC. JM Financial acted as lead transaction and financial adviser to Diageo plc in its acquisition of strategic stake in United Spirits Limited, India’s largest spirits company. JM Financial also acted as the sole manager to the mandatory tender offer by Diageo to the public shareholders of USL.

‘‘ ‘‘

We are very pleased to support Vivacy Laboratoires at such a period of strong growth. We have been impressed by the professionalism of the management but also by the quality of the company’s innovative , patended products, that are very well positioned to serve this rapidly growing market, explained Jean Bernard Meurisse and Philippe Dilasser, respectively President and Manager at Initiative & Finance. This move is consistent with our desire to consolidate our international development and to ensure our growth through the upcoming launch of new innovative products as well as the construction of new industrial site, said Vivacy Laboratoires’ management. Remora Partners, managed to complete due diligence, secure a buyer and close the transaction within a 3-month period. Leading the team at Remora Partners were Gérald Neuville, Managing Partner & Pierre Huyghues-Despointes, Principal.

‘‘

- The shareholders of USL will be asked to approve the preferential allotment to Diageo at a price of INR 1440 per share of new shares amounting to 10% of the post-issue enlarged share capital of USL.

Vivacy Laboratoires, specializing in hyaluronic acidbased medical devices, mainly used in the area of medical aesthetics, welcomed Initiative & Finance as a minority partner to support the company through its development projects.

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- An agreement to acquire a 19.3% interest in the current share capital of USL at a price of INR 1440 per share from the UBHL group, the USL Benefit Trust, Palmer Investment Group Limited and UB Sports Management (two subsidiaries of USL) and SWEW Benefit Company (a company established for the benefit of certain USL employees). Following this disposal, the UBHL group would continue to have a shareholding in USL amounting to 14.9% of current share capital.

l In the context of the sale of a minority stake to an established private equity fund, Remora Partners advised the majority shareholder of the holding of Vivacy Laboratoires, which designs, manufactures and markets aesthetic medical devices.

‘‘

l Diageo plc, United Breweries (Holdings) Limited and United Spirits Limited have today announced agreements under which Diageo would acquire a 27.4% stake in USL, the leading spirits company in India. The consideration will be INR 1440 per share and the total consideration would be INR 57,254 million (approximately £660 million). Following completion of these agreements, Dr Vijay Mallya will continue in his current role as Chairman of USL, and UBHL and Dr Mallya will work with Diageo to build the USL business as the current consumer trends for premiumisation accelerate in India. The agreements are in two parts

VIVACY

Challenges in this deal included minority transaction completed within a limited period of time. We overcame this by managing to find a buyer and execute due diligence in a timely manner. http://bitly.com/Sh34BM

DIAGEO ACQUIRES SHARES IN USL

INITIATIVE & FINANCE ACQUIRES A MINORITY STAKE IN VIVACY LABORATOIRES

Lead Transaction & Financial Adviser to Diageo

Fundraising Advisory

Financial Advisers to Diageo

AXON CAPITAL Calle Almagro 15, 5th floor 28010 Madrid Phone +34 913102894 Fax +34 911412540

Spain Doing Business in

The Company Axon Capital is a growth capital investment firm with the mission to create value by investing in and supporting innovative entrepreneurs and management teams to help them gain the largest possible client-base for an exciting set of products and services. Our tools include a team with entrepreneurial track record, broad industrial knowledge, access to markets, active participation in the investee companies. Our own investors (apart from ourselves) include financial institutions, multinationals and large private investors who trust Axon Capital to work in an ecosystem with extraordinary business potential. We always seek strategic alliances to improve performance of our companies, and we put all our networking power to work on behalf of the entrepreneurs we work with. We invest from 100,000€ to 10 million Euros. For seed companies, we are typically below 500.000€. For companies in expansion stage, we tend to invest above 2 Million €, tranching the funding according to milestones.

Accounting & Finance Due Diligence Advisers

Red2Green Legal & Tax Due Diligence Advisers

Legal Adviser to Diageo

Financial & Tax Due Diligence

Lamartine Conseil IP Due Diligence Advisers

Atem Legal Advisers

Reinhart Marville Torre 86 / December 2012 AI Magazine 1212.indd 86

ACQUISITION INTERNATIONAL

13/12/2012 18:03:42

Deals

of The Year 2012

AI Magazine 1212.indd 87

13/12/2012 18:03:43

DEALS OF THE YEAR: The Best Deals of 2012

— Deal of the Year index

l Acquisition International looks back over 2012 to highlight the most important, interesting and complex deals of the year. These transactions represent the best of the best in M&A.

A&A GROUP - UK INSURANCE DEAL OF THE YEAR

FOUNDOCEAN - ITALIAN/UK CROSS BORDER ENVIRONMENTAL DEAL OF THE YEAR

ADELAIDE ENERGY - AUSTRALIAN ENERGY ACQUISITION OF THE YEAR

GS INTERNACIONAL PR - DEAL OF THE YEAR

BACTEST - UK FUNDING DEAL OF THE YEAR

INDUSTREA LTD - ASIAN MINING DEAL OF THE YEAR

BLOCK 9 - REPUBLIC OF YEMEN PETROLEUM DEAL OF THE YEAR

JORDAN DUBAI CAPITAL - HONG KONG/JORDAN CROSS BORDER DEAL OF THE YEAR

BONITA - DEAL OF THE YEAR

KORES - DEAL OF THE YEAR

CBPE CAPITAL/JTC GROUP CHANNEL ISLAND DEAL OF THE YEAR

LGC - DEAL OF THE YEAR

CLAREMONT HOSPITAL - DEAL OF THE YEAR

LME - UK/CHINA CROSS BORDER DEAL OF THE YEAR

COVE ENERGY - DEAL OF THE YEAR

META ABO - ETHIOPIAN DEAL OF THE YEAR

DIAM - DEAL OF THE YEAR

M7 WORLDWIDE TRANSPORTATION US TRANSPORTATION DEAL OF THE YEAR

DPT LABORATORIES - DEAL OF THE YEAR

NESTLE - AUSTRALIAN PE ACQUISITION OF THE YEAR

ECOBANK - AFRICAN DEAL OF THE YEAR

SCAW SOUTH AFRICA - DEAL OF THE YEAR

EDCON - DEAL OF THE YEAR

THERAPIA HEALTH - NIGERIAN HEALTH SECTOR DEAL OF THE YEAR

EXPRESS LIFE INSURANCE GHANAIAN DEAL OF THE YEAR

TRUE CORPORATION - DEAL OF THE YEAR

FAIVELEY TRANSPORT ACQUISITION OF GRAHAM WHITE MANUFACTURING COMPANY - DEAL OF THE YEAR

UNITED COFFEE - DEAL OF THE YEAR

FINTRAX - IRISH PRIVATE EQUITY DEAL OF THE YEAR

VISTEON - DEAL OF THE YEAR

88 / December 2012 AI Magazine 1212.indd 88

ACQUISITION INTERNATIONAL

13/12/2012 18:03:46

DEALS OF THE YEAR:

The Best Deals of 2012

UK Insurance Deal of the Year The A&A Group, consisting of High-performance and The A&A Group Limited, previously Allen & Allen, has completed a management buyout (MBO) with funding from Darwin Private Equity. The MBO was led by A&A Group chief executive Tony Allen and the senior management team. As part of the deal, Ian Chippendale will be joining as chairman. Previously Chippendale was chief executive of DirectLine and Privilege Insurance, as well as chairman of RBS Insurance. Allen & Allen was founded in 1968 as a broker specialising in niche motor risks. It has more than 500 staff and had around £140m gross written premium last year. Allen said: “We are a close-knit team, who have worked together for a long time. Over the past two years, we have got to know the Darwin team extremely well. They have good experience and knowledge of our industry and their plans to invest and build the business were very much in line with our own.” Darwin Private Equity partner Jonathan Kaye said: “We see great potential for the business and are looking forward to working with Tony and his team to help them extend their market position in non-standard motor insurance. The deal needs FSA approval.” Richard Hall (pictured), Chief Executive and founder of CloudOrigin led the IT Due Diligence of The A&A Group in their first assignment for Darwin Private Equity. CloudOrigin assessed the current IT operations and strategic change programmes underway with a view to the future Richard Hall needs and growth potential of the whole business post transaction. Richard Hall commented: “We delivered a detailed picture of the IT investment options to achieve increased operational controls from day one, and incremental improvements over the next eighteen months. All while supporting different commercial and compliance models across Europe in the most efficient fashion, and building upon best practice within the various business units.”

Australian Energy Acquisition of the Year Piper Alderman acted for Beach Energy Limited (Beach) on its acquisition of Adelaide Energy in a deal valued at $94m. Beach already owned 19.5% of Adelaide Energy’s shares. Through an on-market takeover offer, Beach gained a relevant interest in Adelaide Energy of more than 90% and then acquired the remaining shares by compulsory acquisition. This takeover is part of Beach’s strategy to increase exploration and development activities for unconventional gas in Queensland and South Australia, where Adelaide Energy currently have interests. Corporate partner Robert Postema led the matter. He was assisted by Senior Associate, Sina Kassra. Robert commented:

“This takeover is of significant benefit to both Beach and Adelaide Energy shareholders, and represents another step in Beach’s expansion of operations. We are delighted to have been able to advise Beach on another transaction as part of this growth strategy”.

Piper Alderman, who are recognised as a leading Energy and Resources firm in Australia, have been acting for Beach Energy for over 20 years. The firm also acted for Beach in their takeover of Impress Energy earlier this year. Deal contact: www.piperalderman.com.au

Deal contact: www.CloudOrigin.com

A&A GROUP MANAGEMENT BUY OUT

UK Funding Deal of the Year UK based Bactest Ltd, has closed a £900k funding round led by the Low Carbon Innovation Fund (LCIF), which invested £300k. LCIF is managed by Turquoise International. The round was completed by existing investors and a syndicate of business angels that included Minerva (Warwick), London Business Angels, Finance East and a number of high net worth individuals. The funding will be used to bring to market the company’s in-situ and mobile products that monitor and manage bacterial activity in waste water and other applications that include general laboratory, health and consumer products. Part of the Adapt Low Carbon Group, based at the University of East Anglia, LCIF makes early stage investments in companies producing low carbon products and services and resource efficient businesses located in the East of England region. It is public-private co-investment fund pump primed by £12.5m of European Regional Development Funding (ERDF) funds which will be matched by over £17m of coinvestment. Leading the team at Turquoise International was Ian Thomas (pictured), Managing Director. Turquoise International was appointed as Fund Manager in 2009. Ian said: “This deal provides a very good example of the benefits of combining a professional investor, LCIF, with a pool of individuals/angels, allowing Bactest to raise sufficient capital to fund its business plan and avoid the distraction of on-going fundraising.” The application of Bactest’s bacterial respirometry technology to the water industry was key to LCIF’s involvement. Richard Harvey, Chair of the Investment Committee, said “The LCIF investment will allow Bactest to bring to market a range of products which have great potential for water companies to reduce both energy consumption and carbon emissions and reduce waiting time for lab test results.” Ian Thomas

Turquoise International were assisted by Isle Utilities who undertook market due diligence on the water sector applications of Bactest’s product. Isle’s work focussed on validating the market need, competitive strength and estimated time to market for Bactest’s respirometers within the UK municipal wastewater market. Deal contact: www.lowcarbonfund.co.uk

BEACH ENERGY’S TAKEOVER OF ADELAIDE ENERGY

BACTEST LTD £900K FUNDING ROUND Financial Adviser to the Equity Provider

IT Systems Due Diligence Provider Legal Adviser to the Purchaser Debt Provider

Legal Adviser to the Equity Provider Financial Adviser to the Purchaser Legal Advisers to the Debt Provider Legal Adviser to the Vendor Financial Due Diligence Provider

Financial & Tax Adviser to the Vendor

Commercial Due Diligence Provider

ACQUISITION INTERNATIONAL

AI Magazine 1212.indd 89

Broker

Legal Adviser to the Equity Provider

Commercial Due Diligence Provider

Virtual Data Room Provider

December 2012 /

13/12/2012 18:03:57

NEWS:

from around the world

Republic of Yemen Petroleum Deal of the Year

Deal of the Year

Medco Energi has signed a Sale and Purchase Agreement (SPA) with Reliance Exploration & Production DMCC to acquire 25% participating interest in Block 9 (Malik) Republic of Yemen on July 5 2012, with effective economic date of January 1 2012. Completion of the transaction is conditional upon approval from the Ministry of Oil and Minerals of Yemen. Upon the completion of the transaction, Medco Energi will effectively have 21.25% participating interest (after taking into account a proportionate carried share of Yemen Oil and Gas Company (YOGC)). The resulting participating interests in the Block 9 (Malik) PSA will be as follows: Calvalley Petroleum (Cyprus) 42.50% (Operator); Medco Yemen Malik 21.25%; Hood Oil 21.25%; YOGC 15.00%. Block 9 is located in the province of Hadramaut, Yemen, about 350 kms NE of the Yemeni capital, Sana’a. The Block, which is located within the Sayun-Masila Basin, has an area of 2,234 sq kms, in which some of its area has previously been explored. On Aug 25 2005, the Government of Yemen granted the development licence for the Block for a 20 year period. Participating licence holders have the right to negotiate for an extension of another 5 years after 2025. The estimated gross 2P reserves of Block 9 are approx. 58.6 mmbo (as of Jan 1 2012) and is envisaged to produce up to approx. 14.5 mbopd. Discoveries in Block 9 include four oil fields.

Jamal Alkaf

Sahra Petroleum Consulting (Sahra) provided the legal due diligence and advice for Medco Energi acquisition of the 25% participating interest in Block 9 (Malik) in the Republic of Yemen. Sahra due diligence team was led by Jamal Alkaf, Managing Director and Head of Legal.

Sahra was representing Medco Energi in this deal, who have been clients of Sahra for several years.

On June 20, 2012, TOM TAILOR announced that it had entered into a definitive agreement to acquire BONITA, one of the leading “best-ager” fashion retailers in Germany. The acquisition represents one of the rare truly transforming M&A deals in the European apparel market, with TOM TAILOR effectively doubling its topline, tripling its retail store network and creating a real apparel “heavy-weight” in Europe. With the acquisition of BONITA, TOM TAILOR is expanding into the attractive fashion segment for women and men in the customer age group over 40. The combined group now operates more than 1,350 retail stores with more than 6,100 employees in its core markets of Germany, Austria, Switzerland and Benelux. J.P. Morgan acted as financial adviser to TOM TAILOR and developed the structure to facilitate the transforming acquisition. Michele Iozzolino, Vice President at J.P. Morgan, commented: “The latest deal cements the long-term relationship between J.P. Morgan and TOM TAILOR, following the successful IPO in March 2010 as well as the ABB for Alpha in December 2010. The transaction design enabled the seller to effectively inject BONITA into TOM TAILOR HOLDING AG, become an anchor investor with a 24.9% stake and participate in the expected joint value creation.” The share consideration from the capital increase represented over 35% of TOM TAILOR’s issued share capital, one of the largest capital increases against contribution-in-kind in Germany. Herter & Co. acted, as in the past, as debt adviser to TOM TAILOR. Marcel Herter, leading Partner, commented: “In the fashion retail sector it is difficult to get underwritings. Herter & Co. found new banks, created competition and ensured a significant oversubscription of the facilities.” The transaction was also very well received by equity investors and research analysts, with TOM TAILOR’s share price gaining over 30% since announcement. The acquisition was successfully completed on August 8, 2012, following approval by the German and Austrian antitrust authorities.

MEDCO ENERGI ACQUIRES INTEREST IN BLOCK 9 (MALIK) IN YEMEN

TOM TAILOR HOLDING AG ACQUIRES BONITA

Channel Island Deal of the Year CBPE Capital LLP (CBPE) has invested growth capital into JTC Group, an independent provider of trust, corporate and fund services. Headquartered in Jersey, a leading international finance centre, JTC Group has operations in six jurisdictions, more than 160 employees and a worldwide client base. The business is embarking on a strategic growth plan, designed to take advantage of positive market drivers and industry conditions, by increasing its geographical network and bolstering its capabilities to meet clients’ demands for a sophisticated global provider in this space. Nigel Le Quesne, Group Managing Director, states: “As the rapid pace of globalisation continues, businesses and high net worth individuals are looking for a service provider with the necessary technical skills and regulatory knowledge to protect, manage and enhance their assets across multiple jurisdictions. JTC has the specialist expertise and understanding of the regulatory environments to maximise clients opportunities and provide solutions that are effective and compliant.” Kinetic Partners was employed by JTC Group to undertake independent regulatory risk and compliance due diligence prior to acquisition. The team at Kinetic Partners was led by Monique Melis, Global Head of Regulation and Consulting, assisted by Claire Simm. Melis commented: “Vendor due diligence was a favourable option as it was less intrusive, more cost effective and provided an independent expert’s report that was shared with all parties involved in the transaction. Vendor due diligence allows a firm more control and oversight over the process and the messages delivered are clear and consistent. It ensures that key risks are highlighted, assessed and that possible areas for development are identified.” The PwC Corporate Finance team, led by Steve Cater (Partner and Head of the Financial Services team) advised the JTC Group on its sale of a minority stake to CBPE Capital. They invested time ahead of the process to really understand the business and its key stakeholder objectives; providing continued strategic advice that added value to the business. Steve Cater PwC, through its deep understanding of the offshore sector and the international private equity market was able to pinpoint the appetite, maximise competitive tension and run a tight process. This deal matched JTC with the ‘right’ investor and created a positive benchmark within the market.

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NEWS:

from around the world

Deal of the Year

Aspen Healthcare has acquired the Claremont Hospital in Sheffield. The Hospital is an excellent facility with a proud tradition of delivering quality healthcare to the people of Sheffield and surrounding regions. Based in four acres of grounds, the hospital has a total of 41 beds and three operating theatres. The Claremont provides a wide range of services including a day surgery unit, endoscopy suite, Level 2 critical care and a comprehensive Diagnostic Suite. “We are delighted to welcome the Claremont and its employees to the Aspen group”. Commenting on the transaction, Aspen Healthcare’s CEO, Des Shiels, said “The Claremont is an excellent facility with a proud tradition of delivering quality healthcare to the people of Sheffield and surrounding regions. Aspen Healthcare is excited by the opportunities that this acquisition offers and intends to build upon the Hospital’s past success.” John Randle, Executive Director at The Hospital Management Trust, said “The sale of Claremont Hospital is part of our wider strategy to divest out of hospitals to focus on grant giving and care of the elderly. We are very proud of our achievements at the Claremont and believe that the acquisition by Aspen Healthcare positions the Hospital for further success in the future.” Aspen Healthcare owns and operates six healthcare facilities in the UK. Aspen is a subsidiary of United Surgical Partners International Inc., which has ownership interests and operates over 200 facilities in the USA. Squire Sanders Hammonds acted for Aspen Healthcare on the transaction, Ernst & Young and Bircham Dyson Bell acted for The Hospital Management Trust.

ASPEN HEALTHCARE ACQUISITION OF THE CLAREMONT HOSPITAL Healthcare Property & Valuation Adviser

Deal of the Year

The Tanzanian government has approved Wentworth Resources’ acquisition of a 16.38% participation interest in production operations in the Mnazi Bay concession and Maurel et Prom’s pre-emption rights from Cove Energy. “We continue to work with our partners, M&P and TPDC, to further the exploration and development of the Mnazi Bay concession. In anticipation of the Mtwara to Dar es Salaam pipeline’s completion, negotiations of a gas sales agreement are underway, workovers of three existing gas wells are ongoing and the partners are planning additional exploration activities. These activities are designed to increase our resource base and to position Wentworth as a significant gas producer in Tanzania,” Wentworth’s Executive Chairman Bob McBean said in a statement on Tuesday. The Mnazi Bay Concession Area is located in coastal, south-eastern Tanzania in the Rovuma (Ruvuma) Basin. The area lies between Aminex and Tullow Oil’s Ruvuma Concession Area and Ophir Energy and BG Group’s offshore Block 1. Ophir and BG Group’s Chaza-1 gas discovery lies just northeast of Mnazi Bay’s marine border. The 756 km concession area contains two discovered Tertiary aged gas fields (Mnazi Bay and Msimbati) and holds additional Tertiary, Cretaceous and Jurassic hydrocarbon potential. Four wells have been drilled to date: MB-1, MB-2, MB-3 and MS-1X, and all four wells encountered hydrocarbons. MB-1 is currently producing gas at a rate of 1.7-2.0mmscf/d and this gas is transported via an 8”, 27 kilometre pipeline to the Mtwara Power Plant where it generates electricity for numerous local communities. The Transaction is subject to pre-emption rights. The preemption period is 30 days from the issuance of the preemption notice. Notice was given to the remaining partners on January 30, 2012 and therefore the pre-emption period ends on February 29, 2012. The Transaction is expected to close immediately following the pre-emption period or sooner if both partners notify Wentworth of their intent in writing prior to the end of the pre-emption period but could extend beyond that date depending upon Government approvals. www.clermontenergy.com

WENTWORTH ACQUISITION OF COVE ENERGY’S 100% OWNED SUBSIDIARY, COVE ENERGY TANZANIA MNAZI BAY LIMITED Financial Adviser to the Purchaser

Deal of the Year

H.I.G. Capital (“H.I.G.”) announced the sale of DIAM International (“DIAM” or the “Company”) to LBO France, a leading French private equity firm. Based in Paris, France, DIAM is the leading global designer and manufacturer of high quality luxury and retail point of purchase (“POP”) displays. DIAM’s more than 1,300 employees in 13 countries throughout Europe, Asia, Africa, North America, and Australia provide the world’s leading luxury brands and specialty retailers with a full range of POP display services. The Company’s primary business segments include prestige retail displays, mass-market displays, non-cosmetic displays and installation services. For over 30 years, DIAM has nurtured close relations with the world’s leading cosmetic brands with a growing range of products and services to support their worldwide development. “H.I.G. has been a tremendous partner to DIAM and has been instrumental in helping us execute our growth strategy,” said Michel Vaissaire, Chief Executive Officer of DIAM. In the last five years, we’ve significantly expanded our international sales, made a key acquisition, and made sizeable investments to improve our market leading customer support and manufacturing efficiency. We are very happy to now welcome LBO France as a shareholder. “DIAM was an extremely successful investment for H.I.G.,” commented Olivier Boyadjan, Managing Director of H.I.G. in Paris. The team at Advention was led by Alban Neveux, the Group Managing Director, along with Julien Perret, Manager.

Alban Neveux

“We represented the buyer, LBO France, with whom we had worked extensively with before, and we lead the strategic due diligence for him

In this deal two particular challenges had to be faced and properly assessed: First, the international dimension of Diam’s market environment which led to conducting extensive investigations in Asia and more specifically in China through our local office, and second the number of product categories in which Diam now operates.”

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DEALS OF THE YEAR: The Best Deals of 2012

African Deal of the Year

Deal of the Year

RoundTable Healthcare Partners (“RoundTable”), an operating-oriented private equity firm focused exclusively on the healthcare industry, announced today that its portfolio company, Renaissance Acquisition Holdings, LLC (“Renaissance”), has acquired DPT Laboratories Inc. (“DPT”). DPT is a leading pharmaceutical contract development and manufacturing organization with facilities in San Antonio, TX and Lakewood, NJ. As part of the transaction, the current shareholders of DPT will maintain a meaningful equity stake in the combined business.

Ecobank Transnational signed a 250 million dollars agreement with the Public Investment Corporation of South Africa.

IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk.

The investment will also enable PIC to become a board member of ETI.

IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents. Joseph Moss, Managing Director, and Kevin Blitz, Vice President, GE Capital, Healthcare Financial Services led the financing for RoundTable Healthcare Partners and Renaissance Acquisition Holdings. GE Capital, Healthcare Financial Services has Joseph Moss been the leading lender for RoundTable Healthcare Partners for more than 11 years and has financed Renaissance Acquisition Holdings since its inception. At GE Capital, Healthcare Financial Services our deep industry expertise and reliability continue to drive our leadership position as the premier healthcare lender in the United States.

RENAISSANCE ACQUISITION HOLDINGS, LLC ACQUIRES DPT LABORATORIES

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The agreement was PIC’s investment on behalf of government employment pension fund (GEPF) in ETI’s common equity. Mr. Arnold Ekpe , Group Chief Executive of ETI, signed for Ecobank while Chairman of PIC and Deputy Finance Minister for South Africa, Mr. Nhlanhla Musa Nene and Chief Executive Officer of PIC, Mr. Elias Masilela signed for PIC. Under the terms of the agreement, the 250 million dollars seed fund will amount to 3,125,000 shares in Ecobank or 19.58 per cent of the bank’s total outstanding shares.

Ekpe said that the GEPF transformation as a shareholder of Ecobank will leverage the bank’s reputable local and international shareholders and gradually bring ETI’s equity capital raising programme to an end. “Our unparalleled presence across sub-Saharan Africa and our knowledge of local markets will also facilitate the GEPF’s investment plan for Africa,” Ekpe said. “With this one investment, we will be immediately optimising our footprint on the rest of the continent, an action that would otherwise require multiple investments and huge effort as well as resource allocation,” he said. Ernst & Young’s Transaction Advisory Services partners, Matthew Lee and Anil Khimjee led the due diligence and valuation teams respectively, providing advice to the PIC. Colin Schopbach, regional director, Merrill DataSite, was the lead on this Colin Schopbach project for virtual data room provision, essential throughout the due diligence phase of this project. Colin worked with Ecobank to establish their VDR.

Lisa Botha

Bowman Gilfillan’s Lisa Botha, Partner in the Banking and Finance Team, Francisco Khoza, Partner in the Banking and Finance Team and Priyesh Modi, Partner in the Corporate Department represented the PIC, which acted in this transaction as representative of the South African Government Employees’ Pension Fund.

PUBLIC INVESTMENT CORPORATION OF SOUTH AFRICA INVESTS $250M PENSION FUND IN ECOBANK Financial Due Diligence Provider

Deal of the Year

ABSA took over retailer Edcon’s store card book for R10bn — its largest investment since parent Barclays bought a controlling stake more than five years ago. Absa CEO Maria Ramos said the group would have the responsibility for credit, management of fraud, risk, finance, legal and compliance operations of the store card business. Edcon would retain customer-facing activities, including sales and marketing, customer services and collections. Edcon and Bain Capital engaged First Annapolis over two years ago to begin a strategic review that led to the transaction announced in June. For Edcon, the sale of the ZAR10 billion consumer receivable portfolio is a strategic transaction that substantially reduces their balance sheet and allows for debt retirement. The private label credit program is a critical component of the Edcon retail value proposition, however, so the transaction was predicated on a long term relationship whereby Absa will continue to provide access to credit for Edcon customers and Edcon will continue to provide all customer facing operations. First Annapolis has structured numerous partnership programs between large retailers and banks in North America, Europe and other parts of the world and was the lead advisor to Edcon and Bain on the transaction. Robert Lime, Partner, led the deal team from First Annapolis working with executives from Edcon and Bain Capital, as well as the other legal and accounting advisers to overcome obstacles and achieve a successful transaction.

Roula Hadjipaschalis

Roula Hadjipaschalis, Director of Corp Tax at KPMG advised Edcon on tax matters related to the sale of their store credit card business. She explained, “We identified and dealt with various issues towards the successful conclusion of the deal whilst remaining mindful of tax and regulatory requirements necessary for it’s sustainability in the future.”

Contact Details: www.kpmg.co.za

ABSA ACQUISITION OF EDCON

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DEALS OF THE YEAR:

The Best Deals of 2012

Ghanaian Deal of the Year

LeapFrog acquired a majority stake in Express Life Insurance Company Ltd, which focuses on serving low-income people with affordable financial tools. The transaction was the largest private foreign direct investment in the history of Ghana’s insurance industry. LeapFrog’s capital and expert operational support will enable Express Life to achieve industry leadership in financial inclusion. Ghana’s life insurance industry has grown at over 40% annually for the past five years, presenting a distinctive business opportunity. Yet less than 2% of the country’s 25 million people have access to insurance – and cost remains the primary barrier. LeapFrog’s investment will help Express Life decrease the costs of its products to around $2 per beneficiary per month, thus providing safety nets for Ghana’s most vulnerable consumers With LeapFrog’s support, Express Life aims to provide over 500,000 low-income Ghanaians with affordable hybrid savings and risk products. LeapFrog is also actively helping Express Life with many of its key initiatives, including expanding its management team, training its sales force, upgrading IT systems, and launching innovative products.

“This powerful strategic alignment will permanently alter the insurance space in Ghana. Together, we are setting a new standard for ethical and inclusive provision of insurance” - Obed Danquah, Founder of Express Life Insurance

LEAPFROG INVESTMENTS ACQUISITION OF EXPRESS LIFE INSURANCE Tax Adviser

Deal of the Year

On February 3rd 2012, Faiveley Transport has successfully completed its acquisition of 100% of Graham White Manufacturing Company, a leading designer and manufacturer of compressed air drying technology and brake components for locomotives and rail transit markets. Graham-White’s annual sales reached more than $70 million in 2011, of which 90% was generated in the USA. Concerning this operation, 209,441 new Faiveley Transport shares, representing 1.45% of the group’s share capital, have been issued to former Graham-White shareholders. This operation will reinforce Faiveley Transport’s position in the US and both companies will benefit from significant new opportunities thanks to an enlarged product range and complementary customer bases.

Audrey Fauroux

WeiserMazars LLP assisted Faiveley Transport with financial and tax due diligence services, international tax structuring and advisory services on the acquisition of Graham-White Manufacturing. Audrey Fauroux served as M&A Leader on the project, assisted by Anthony Lacoudre - Director, International Tax.

WeiserMazars is the independent U.S. member firm of Mazars Group, a prominent international accounting, audit, tax and advisory services organization with 14,000 professionals in more than 69 countries on 6 continents. Our dedicated M&A Anthony Lacoudre Due Diligence team guides clients through each stages of a transaction with a tailored approach that addresses the specific needs of the deal. Mazars has a long-standing relationship with Faiveley Transport and provides worldwide advisory services to the Group.

FAIVELEY TRANSPORT ACQUISITION OF GRAHAM WHITE MANUFACTURING COMPANY Financial Due Diligence Provider

Irish Private Equity Deal of the Year Fintrax Group Holdings has been acquired by Exponent Private Equity for a consideration of €170 million from majority shareholder the Barry Family Trust and Management. Raglan acted as exclusive corporate advisors to Fintrax Group and were hired by Gerry Barry majority shareholder. Cathal Friel (Managing Director) and John Bowe (Director) lead the deal jointly from Raglan Capital and Christian Klinkenberg (Associate Director) was also part of the Raglan deal team. John Bowe from Raglan Capital commented: “Raglan ran a very aggressive multi-stage auction for the business. After phase 1 Raglan received over ten offers (both trade and PE) which met the majority of shareholder expectations. In phase two we gave 10 parties access to mgt presentations and an online data room. Again 10 fully funded offers for the business were received at end phase 2. In phase three two parties were given a Share Purchase Agreement and allowed complete DD with first to be able to sign agreement and complete on same day allowed acquire the business. Phase three was a six week process in which Raglan ensured both parties ran very hard. As advisers we delivered an excellent result for our client. This is our first engagement with the Company but we have met Gerry Barry on numerous occasions over the last number of years. The challenges were positioning the business for sale given it was very much an entrepreneurial run company that had grown strongly over the last number of years. This was shareholders and management team first experience of a sales process and managing and keeping them focussed through a competitive process where they met multiple interested parties (both trade and private equity) was demanding. We overcame these challenges by assisting running a very efficient process and keeping parties to deadlines and co-ordinating management presentations, managing expectations and co-ordinating the DD process”.

EXPONENT ACQUISITION OF FINTRAX Corporate Finance Advisor to Vendor

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DEALS OF THE YEAR: The Best Deals of 2012

Italian/UK Cross-Border Environmental Deal of the Year Ambienta SGR SpA, an Italian private-equity company has taken a 35% stake in the U.K. offshore wind engineer FoundOcean Ltd. FoundOcean, based in Buckinghamshire, England, provides subsea and offshore foundation grouting to the offshore wind and oil and natural-gas industries. The company’s sales doubled to 12 million pounds ($19 million) last year from 2009, driven by new offshore wind contracts. Fawcus Corporate acted for the directors of FoundOcean as their Corporate Finance Lead Adviser. David Fawcus said: ‘The Private Equity investment in Foundocean provides and exciting platform for the company’s future development including potential future acquisitions. The transaction is based on secure foundaDavid Fawcus tions through a meeting of minds. I was pleased to bring important structural points to the negotiation table that helped ensure that the interests of all stakeholders were suitably aligned. The key points are now embedded in the agreed transaction terms. PricewaterhouseCoopers supported Ambienta in making the investment through the provision of financial and tax due diligence and SPA advice. David Smellie, partner in the corporate and commercial practice at B P Collins LLP, led the lawyers which acted for FoundOcean Limited and its management team in connection with the investment by Ambienta SGR. Other members of the corporate team were associate lawyer, Harriet Jones David Smellie and trainee lawyer, William Key. Smellie commented, “There were a number of issues to overcome but these were successfully negotiated due to the collaborative approach taken by advisers on all sides to ensure a relatively swift and smooth transaction.” David Smellie continued, “We are delighted to have assisted FoundOcean Limited in helping it to bring on board an investor focused on growth environmental investments which will allow the company to achieve its expansive growth strategy. B P Collins LLP has had a long relationship with both FoundOcean and some of its larger shareholders and directors and this instruction illustrates the success of the approach taken by our practice in becoming trusted advisers to our clients.” Contact Details: david@fawcuscorporate.co.uk

AMBIENTA ACQUISITION OF A 35% STAKE IN FOUNDOCEAN Corporate Finance Adviser to Vendor

Deal of the Year

Lifetime Brands Inc. a leading global provider of kitchenware, table-top, home decor and lifestyle products, today announced it has acquired a 40% equity interest in GS Internacional S/A (“GSI”). GSI is a leading wholesale distributor of branded housewares products in Brazil. The company markets dinnerware, glassware, home decor, kitchenware and barware to over 7,000 customers, including major department stores, housewares retailers and independent shops throughout Brazil. The company’s principal office and distribution facilities are located in Serra, State of Espirito Santo, close to Vitoria, Brazil’s largest container port. GSI also maintains a showroom and offices in Sao Paulo. Jeffrey Siegel, Lifetime’s Chairman, President and Chief Executive Officer commented,

“This investment represents another step in executing our strategy to accelerate our growth and to strengthen our business by investing in successful companies in partnership with strong local management teams. We are impressed by GSI and the quality and commitment of its management team, led by Paulo Soares”. Paulo Sergio G. Soares, GSI’s founder and Chief Executive said,

“Our partnership with Lifetime Brands, which includes access to many of Lifetime’s brands and to its product development and global sourcing capabilities, will enable GSI to enhance its growth and profitability, and to reinforce its position as a leading supplier of high quality, innovative housewares products to retailers in Brazil and other parts of South America.”

LIFETIME BRANDS ACQUISITION OF STAKE IN GS INTERNACIONAL PR

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Asian Mining Deal of the year General Electric (NYSE: GE) completed the acquisitions of two underground mining equipment manufacturers in support of the global expansion of its new mining division, GE Mining. GE entered into an agreement to acquire 100 percent of Australiabased Industrea Limited (ASX: IDL, OTCQX: IULTY), a provider of safety and productivityenhancing mining equipment and services on 16 May 2012. The transaction is valued at approximately A$700 million, which represents a 5.5x EBITDA multiple based on full- year financial data as of Dec. 31, 2011. Record Point was the exclusive adviser to Industrea in relation to the sale, having advised the company extensively over the past 4 years. GE also signed a binding Letter of Intent (LOI) to acquire Fairchild International, an independently owned and operated underground mining equipment manufacturer located in Glen Lyn, Virginia. Terms of the agreement were not disclosed. The combination of the two entities expands GE Mining’s product offering to address approximately 35% of the underground mining value chain. Industrea and Fairchild International together are well positioned in dynamic growth regions for mining, including Australia, China (Industrea), and the United States (Fairchild). GE will enable these regionally focused enterprises to reach a global customer base with enhanced products based on GE’s clean propulsion systems, energy storage offering, and world-class system integration capabilities. Both Industrea and Fairchild International will benefit from GE’s lean manufacturing and effective global supply chain management. Both companies will become part of GE Transportation’s global mining business which utilizes the people, technologies, and products from across GE to help its customers solve their toughest mining challenges. GE helps mines work better by providing innovative solutions in critical areas such as power, water, and productivity. GENERAL ELECTRIC ACQUIRED INDUSTREA LIMITED

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DEALS OF THE YEAR:

The Best Deals of 2012

Hong Kong/Jordan Cross Border Deal of the Year Jordan Dubai Capital (‘JD Capital’), the Amman based investment company today announced that the Hong Kong based HPF Private Investment Fund Company Ltd (‘HPF’) has bought 100% of its share capital at JD 0.90 per share for an aggregate consideration of JD 92 million. Mr. Basel Barghouthi was the Partner in charge of this acquisition and assisted by Ramez Barghouthi (Partner in charge of Banking and Commercial practice), Jamal Hadidi and Ashwaq Khraisat, (Associates in the Corporate and Commercial practice). “Barghouthi & Co. represented the Purchasers with regard to Jordanian law matters relevant to the acquisition; legal Due Diligence on Jordan Dubai Capital, the Share Purchase Agreement and other Transaction Documents, filings and registration with the Companies Controller Department in Jordan. Typically, the acquisition transaction involved participating in round of negotiations and follow up meetings with International and local Lawyers representing the Sellers as well as the appointed Custodian”. Mr. Rami Al-Hadidi, Founding Partner, led the legal team at Hadidi & Co. “Our engagement initially was through the Purchasers, yet as Custodian Agents Hadidi & Co represented both Sellers and Purchasers. Hadidi & Co has advised JDC for a few years and enjoys professional relations with several Sellers to the transaction. The Companies Controller will always have a discretionary authority over the formality of the transfer deeds. The Team endeavoured to have all pertinent documentation thoroughly drafted and detailed. The Team verified all such documentation with the Companies Controller at the Ministry of Industry and Trade. Thus, anticipating any future requirements”.

JORDAN DUBAI CAPITAL ACQUIRED BY HPF PRIVATE INVESTMENT FUND HONG KONG

Deal of the Year

Southern Africa-focused Frontier Rare Earths’s stock rose by 29.17% in early morning trade on the TSX on Wednesday following confirmation that a Korean company would close a $23.8-million deal to acquire a 10% interest in the project. In terms of a financing deal to accelerate the development of Frontier’s flagship Zandkopsdrift project in South Africa, Korean government-owned Korea Resources (Kores) had taken up its responsibility to contribute its share of the project’s development budget from July 3. Under the agreement, Kores would pay $23.8-million to acquire an initial 10% stake in the Northern Cape project, including offtake rights for 10% of the rare earths production, by September 30. Frontier CEO James Kenny told Mining Weekly Online that as a junior in the tough rare earths market, the company was “extremely” pleased at having a partner contributing to developing the project in the form of both technical expertise and finance as well as having an interest in taking much of the end product. This followed Frontier completing a Canadian National Instrument 43-101-compliant preliminary economic assessment (PEA) on Zandkopsdrift on March 30, which pointed to the project being both technically feasible, economically robust and having a low-risk profile. The agreement also provided that Kores may acquire a further 10% interest in Zandkopsdrift and up to 10% of Frontier’s shares following completion of a definitive feasibility study on Zandkopsdrift, which together, if acquired, would give Kores offtake rights for an additional 21% of rare-earth production. ENS Advised Frontier Rare Earths and Sedex Minerals in respect of the strategic investment by the Korea Resources Corporation (representing a consortium of investors including Samsung, Hyun¬dai and LG), regarding the development of rare earth prospecting, mining and processing facilities in South Africa, valued at CA$24 million. The ENS team was led by Lawrence Helman, a director / partner at ENS. “We represented Frontier Rare Earths Limited and Sedex Minerals (Proprietary) Limited. We have represented Frontier and Sedex in respect of various transactions over a number of years and assisted with the South African aspects of the Frontier listing on the Toronto Stock Exchange. The importance of the transaction was to provide Kores with options to stagger their investment in client’s Zandkopsdrift rare earth mining operation and activity related to this operation against specified milestones.”

KORES CONFIRMS STAKE IN SOUTH AFRICAN PROJECT

Deal of the Year

LGC has raised approximately £80 million of additional financing from Commerzbank, GE Capital, ICG and ING in order to support the company’s future growth ambitions. The four new Mandated Lead Arrangers have joined the existing syndicate that was established for Bridgepoint’s original buyout comprising Bank of Ireland, HSBC Bank plc, Lloyds, Santander and Societe Generale. The financing completed on 15th June 2012. LGC is an international leader in laboratory services, measurement standards, reference materials and proficiency testing. The company operates out of 22 countries with laboratories and centres across Europe and the US, as well as sites in Brazil, China and India. Bridgepoint originally acquired LGC from LGV Capital in 2010 in a transaction that valued the business at £257 million. Since the original acquisition, LGC has made a number of acquisitions and the new financing provides additional facilities in order to support further acquisition opportunities. GE Capital is one of Europe’s leading providers of leveraged finance for mid-market private equity backed transactions and has a leveraged loan portfolio in excess of €5 billion across EMEA covering 160 companies in the region. The firm has been lead arranger of over 30 deals in the last 18 months and has a strong pipeline in place for the year ahead. Fenton Burgin and Chris Skinner of Deloitte acted as Debt Advisor to the Equity House & Management team. Chris Skinner commented, “The expertise shown by Management and Bridgepoint was a key feature of the deal, as was the collaborative and positive engagement from all the banks.”

LGC’S £80M FINANCING ROUND

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DEALS OF THE YEAR: The Best Deals of 2012

UK/China Cross-Border Deal of the Year Hong Kong Exchanges & Clearing has signed a framework agreement with the London Metal Exchange to buy the LME for 16.673 billion HK dollars (2.1 billion U.S. dollars). In a filing to the stock exchange, HKEx said it offered to buy the LME’s 12.9 million shares at 1,292.55 HK dollars per share.

Ethiopian Deal of the Year

Diageo has concluded the acquisition of the Meta Abo Brewery Share Company in Ethiopia with the purchase of the entire share capital for $225m. The acquisition gives Diageo direct access to the Ethiopian beer market and complements Diageo’s existing premium spirits business in the country.

The credit has been secured from a group of banks including the China Development Bank Corporation, Deutsche Bank, HSBC and UBS, according to the statement.

Meta Brewery is the second largest beer company in Ethiopia with a volume share of approximately 15%. From its brewery near Addis Ababa it produces and distributes its flagship national lager brands, Meta and Meta Premium.

Behre Dolbear Capital Inc. was the Commercial Advisor to the HKEx for the acquisition of the London Metals Exchange and was led by Project Manager Alastair McIntyre, Senior Managing Director - Asia and supported by industry veteran team Alastair McIntyre members Nigel Dentoom and Paul Shellman.

Nick Blazquez, President Diageo Africa, commented: “Gaining access to this exciting beer market is part of our strategy of participating at scale in beer and spirits growth in Africa, and I am delighted that we are able to announce the completion of this acquisition. Meta is a strong national brand that has great heritage in Ethiopia. We will invest behind this sustainable growth of the brand, the business and the wider communities in Ethiopia.”

The team provided a detailed due diligence review and an advisory service using their practical experience and expertise in the metals market relying on a high level understanding of the LME. This specialized experience and knowledge of; customers, trading, financial modelling, regulatory issues, competitor’s bidding rationale helped position the Exchange for a better understanding of the overall business and assisted to complete a successful agreement of purchase. Additionally, their commercially relevant expertise assisted the banking, legal and accounting firms in their broader role as advisors.

Ernst and Young participated in the transaction, representing Diageo. Zemedeneh Negatu (pictured), who is the Managing Partner for Ethiopia and the Head of Transaction Advisory Services (TAS) for Ernst & Young Eastern Africa was the overall global Zemedeneh Negatu team leader which included 17 professionals.

Behre Dolbear was previous commissioned by the Stock Exchange of Hong Kong as its sole technical advisor to provide revisions to the Chapter 18 listing rules for natural resource companies and continues to work with the group.

HONG KONG ACQUISITION OF LME FOR $2.1 BLN

Negatu commented: “Diageo won a hard fought deal for Meta Brewery against several of its global competitors including SABMiller and Heineken to enter one of the fastest growing economies in the world, Ethiopia, which is also the fourth largest economy in Africa.” Deal contact: Zemedeneh.Negatu@et.ey.com

DIAGEO ACQUISITION OF META ABO BREWERY SHARE COMPANY

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US Transportation Deal of the Year TriStar Worldwide Chauffeur Services has acquired M7 Worldwide Transportation, a premium ground transportation company, based in Burlington, Massachusetts. The combined entity further enhances TriStar’s leadership position in the meetings and roadshow segments while providing an enhanced platform for the growth and diversification of TriStar’s business globally. Thames Valley KPMG acted on behalf of the Board of TriStar on the deal, with Adrian Dray, Partner, and Head of KPMG Corporate Finance in the Thames Valley, leading the team, assisted by Ed Wirgman, who has previously advised the management team and has known them since 2007. KPMG are also the Company’s auditors. Ed commented: “TriStar is now a long-standing, important client of KPMG and we were delighted to be able to assist the Board on this transaction. We look forward to supporting TriStar in the future as they continue to grow what has become a truly global business and brand.” KPMG also led the tax due diligence and tax structuring portions of the deal, with Richard Geoffroy (pictured), Partner, and Jeremy Cordon (Senior Manager), KPMG Mergers & Acquisitions Tax leading the team, Richard commented: “Our tax due diligence efforts focused and mitigating any Richard Geoffroy identifying historical tax liabilities that may have carried over to TriStar. Our tax structuring efforts focused on balancing TriStar’s business needs with tax efficiency. Of particular interest to TriStar was the location of the new U.S. assets within the existing TriStar U.S. group. The biggest challenge we faced was insuring that we properly integrated M7 into Tristar’s existing U.S. corporate group.” William R. Chaff, Partner of Lopez, Chaff & Wiesman Associates, Inc. for 26 years led the team, assisted by Catherine Gable, Principal and Brenda J. Soucy, Senior Accountant. Chaff commented: “Our firm played a key role on providing due diligence and guidance on the structure and terms. Our representation was on both side of the transaction. We have had a business relationship with M7 Transportation for over 5 years TriStar Worldwide Chauffeur Services for over 6 years. We look forward to continuing to provide our services to TriStar in the years to come”

TRISTAR WORLDWIDE CHAUFFEUR SERVICES ACQUISITION OF M7 WORLDWIDE TRANSPORTATION Financial Adviser to the Purchaser & Tax Adviser

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Maisenbacher & Capobianco LLC Financial Adviser to the Vendor

ACQUISITION INTERNATIONAL

13/12/2012 18:04:59

DEALS OF THE YEAR:

The Best Deals of 2012

Australian PE Acquisition of the Year Australian private equity firm Pacific Equity Partners has acquired Nestle Australia’s Peters Ice Cream Business for an undisclosed amount. PEP will acquire sub-brands like Billabong, Monaco Bar, Connoisseur and Frosty Fruits as well as the right to market and sell in Australia select global brands like Drumstick, Maxibon, Skinny Cow, Heaven and Milo Scoop Shake. “We are pleased that PEP has expressed its desire to continue to grow this iconic brand in Australia, and delighted that PEP has agreed for substantially all employees to offered employment with PEP as part of the deal. The remaining employees will be retained by Nestle,” he added. Nestle currently employs around 4,000 people across Australia. News Limited Lucy Court, left, and Claudia Brkic enjoy Nestle Peters’ Drumsticks in Melbourne’s South Yarra “For PEP, this is a great chance to apply our strong consumer products knowledge and credentials to support the management team and their business strategy. We are keen to invest further in Peters’ iconic and loved brands, and we are excited to include the Peters business in our portfolio,” Pacific Equity Partners Managing Director Rickard Gardell said in a statement.

Sean Gregory

PwC provided financial, taxation and IT due diligence services to long term client Pacific Equity Partners in support of the acquisition of the Peters Ice Cream business. The team was led by Sean Gregory, Transaction Services Partner and Chris Morris, Tax Partner, who were supported by a wider PwC team incorporating various technical specialists

Consideration of the financial performance by customer channel was a key aspect of PwC’s work. Additionally, the carve out nature of the transaction provided key challenges such as assessing the stand alone cost base including IT systems and working capital requirements.

Steve Smith

Steve Smith – Partner led the Ashurst team acting on behalf of the banks that provided the debt financing for the deal. Steve commented: “A particular focus for the banks was ensuring their security in the IP was properly protected. A key element of this was a tripartite agreement negotiated with Nestle.”

PEP ACQUISITION OF NESTLE’S PETERS ICE CREAM

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Nigerian Health Sector Deal of the Year The Aureos Southern Africa Fund LLC (ASAF) has sold its stake in leading South African brick and clinker aggregate manufacturing group, SA Block (Pty) Ltd. ASAF’s exit forms part of the 100 % sale of SA Block to Afrimat Ltd, a leading black empowered open pit mining company listed on the Main Board of the Johannesburg Stock Exchange. ASAF invested in SA Block in February 2006. SA Block has since achieved consistent growth, carving itself a unique position in the market as a leading brick and clinker manufacturer in Gauteng. Jackson ETTI & EDU ( JEE) advised on an expedient legal framework for the inflow of the investment by Aureos into the SPV into the operating company - TBHCL. With regard to alignment, JEE advised on compliance process including devising strategy in order to ensure that minority shareholders were engaged, informed and part of the process thereby eliminating any form of minority oppression and challenge of the transaction. Folasade Olusanya, a Partner and Head of the Corporate/Commercial Department led the team and commented on the challenges of the transaction: “The main challenges were structuring the transaction in order to ensure that the investment was received by the operating company and alignment between the promoters of the business and other shareholders. The Anadach Consulting Group provided due diligence advice on the operations to the Aureos team. The Anadach team was led by Dr Alade, she commented: “It was an interesting assignment as it was the first Aureos investments in the health sector in Nigeria, and one of the first PE deals in the sector. From our perspective, there were no major issues with the due diligence which involved working across the various operational sites in several cities across the country.”

Sola Arifayan

Ikeyi & Arifayan represented The Africa Health Fund LLC, a fund raised by Aureos Capital. Sola Arifayan, a partner led the team, he commented: “We have on several occasions provided due diligence review and tax structuring services to members of the Aureos Group through Aureos Nigeria Advisers Limited.

“A key challenge was the need to create a tax and capital structuring model which complied with applicable law and regulation but also optimised the position of the investors and the existing shareholders. “We drew from our in-depth knowledge of the Nigerian tax and foreign investment regime and assisted in devising a capitalisation model that satisfied investors’ and shareholders’ key concerns including from a tax efficiency and need to ensure unrestricted repatriation of investment proceeds.”

AUREOS INVESTMENT IN THERAPIA HEALTH Legal Adviser to the Purchaser

Deal of the Year

Scaw Metals Group with the sale of integrated steelmaker Scaw South Africa to a consortium led by South Africa’s State-owned Industrial Development Corporation (IDC) and Main Street for $440-million. Main Street’s shareholders include Izingwe, Southern Palace Group of Companies, and Shanduka Resources. The debt-and-cash-free transaction follows the sale of Scaw’s international businesses, Moly-Cop and AltaSteel, to Onesteel in December 2010 for $932-million, also on a debt-and-cash-free basis. In aggregate, the total consideration achieved from the sale of all Scaw’s businesses has amounted to $1.4-billion. The sale of Scaw brings the total announced proceeds from Anglo American’s divestments of noncore assets to $3.7-billion since 2010. Macquarie First South Capital (MFSC) acted as sole financial adviser to the Buying Consortium. MFSC’s team was led by Johan Schutte and supported by Andrew Swan, Albie Alant and Grant Rothlisberger. Schutte commented: “A unique aspect of this transaction was advising such a large consortium. Retaining sufficient flexibility and responsiveness as well as strong communication skills between each of the consortium members as well as their advisers was essential in order to be successful in this competitive auction process.” ENS was the legal advisor to the Buying Consortium. ENS has a long standing relationship with both the IDC and Main Street. The ENS team was led by Witness Makhubele and Jason Valkin, both of whom are directors / partners at ENS. Witness commented: “The transaction had to be negotiated and concluded over very tight timelines. There were a number of pre-completion conditions to the transaction which had to be completed on or before the conclusion of the transaction agreements. The transaction was challenging and interesting on a number of fronts – for instance, the subject assets are located in various countries throughout the world –in South Africa, Zimbabwe, Namibia, Australia, Italy, Zambia and Canada. This entailed ensuring compliance with laws in these various jurisdictions, particularly anti-trust laws. Notwithstanding this, the transaction was successfully concluded with no major challenges. Accolades should also be given to the parties as well as all the advisers for their hard work, dedication and commitment in ensuring that the transaction is concluded within the set agreed time lines.” Nedbank represented the Buying consortium on the deal. Commented by Graeme Auret, Managing Executive: Nedbank Corporate Banking: “Certain of the consortium members were already invested in Scaw Metals and through that as well as other banking relationships with some of the members, we have enduring relationships. We are primary banker to some of these parties. In addition, Nedbank has a strong relationship with the IDC, and have prior and existing mandates to provide Debt Capital Market advisory to them as well as other banking relations. This transaction is excellent for South Africa to keep an asset in the hands of South Africans as well as for the advancement of strong Black Economic Empowerment.”

INDUSTRIAL DEVELOPMENT CORPORATION ACQUISITION OF SCAW SOUTH AFRICA Legal Adviser to the Purchaser

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Financial Adviser to the Purchaser & Equity Provider Tax Adviser Legal Advisers to the Debt Providers Management Team and Commercial Due Diligence Provider Risk & Insurance Due Diligence Provider

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DEALS OF THE YEAR: The Best Deals of 2012

Deal of the Year

Hunton & William’s Bangkok office represented a group of reputable syndicated lenders, having Krung Thai Bank Public Company Limited, as a facility agent, and Siam Commercial Bank Public Company Limited, as a security agent, to provide credit facilities loans in an amount of $1.6 billion to True Corporation Public Company Limited, one of the top three major Thai telecommunication companies in Thailand. It is regarded as the largest credit facilities loan transaction for a Thai telecommunication company. Manida Zinmerman, a partner at Hunton & William’s Bangkok office lead the team. She commented:

“We were representing a group of syndicated lenders, namely, Krung Thai Bank Public Company Limited, as a facility agent, and Siam Commercial Bank Public Company Limited as a security agent, United Overseas Bank (Thai) Public Company Limited and Export-Import Bank of Thailand, as lenders. Hunton & William’s Bangkok office has a long-standing working relationship with both Krung Thai Bank Public Company Limited, and Siam Commercial Bank Public Company Limited. The telecommunication businesses in Thailand are heavily regulated, involving newly legislated rules and regulation with broad and untested interpretation. Therefore, the terms of the credit facilities loan shall take into account those restrictions under the applicable rules and regulation, and, at the same time, a risk mitigation strategy was implemented to address the risk management concerns of the syndicate lenders”. TRUE CORPORATION CREDIT FACILITY LOAN

Deal of the Year

UCC Holdings Co Ltd. (UCC), Japan’s leading coffee company, has today announced that it has signed a definitive agreement to acquire United Coffee, Europe’s leading independent coffee group, from the private equity fund, CapVest Equity Partners. The transaction is expected to complete during the second quarter of 2012 and will bring together two leading coffee groups from Europe and Asia to become one of the top five biggest independent coffee companies in the world. United Coffee will continue to trade as United Coffee across all of its key markets. Crosspoint Advisors and TC Capital acted as co-financial advisors to UCC Holdings on this transaction. Crosspoint Advisors, Japan’s leading independent advisory firm, focuses on providing valueadded financial advice on mergers, acquisitions, restructurings and capital raisings to global corporations and institutions doing business in or with Japan. TC Capital is a Pan-Asian investment bank that specializes in mergers and acquisitions and private capital transactions. Stamford Partners is a leading independent investment banking firm specialising in the European food & beverage industry. Stamford Partners, led by its partners Damian Thornton and Simon Milne, acted as sole financial advisor to CapVest on this transaction. It has a long-standing relationship with both CapVest and United Coffee, whom it first advised on a business disposal in 2004. In August 2011 Stamford Partners advised on the sale of Jacob Fruitfield to Valeo Foods, another CapVest investee company. Contact Details: http://xpoint.jp/ http://www.tccapital.com/ UCC HOLDINGS ACQUISITION OF UNITED COFFEE Joint Financial Advisors

Deal of the Year

Visteon Corporation (NYSE: VC) today announced that it has completed the sale of its automotive lighting business to Varroc Group, a global provider of automotive parts, for $72 million in cash, subject to price adjustments. The two companies announced plans for the sale on March 12. Rothschild served as financial advisor to Visteon in connection with the transaction. The Rothschild team was led by Ira Wolfson, Managing Director and Head of North American Automotive and Co-Head of North American Industrials, and Joshua Goza, Director in Rothschild’s M&A department. RothIra Wolfson schhild conducted a competitve auction for Visteon Lighting with pariticpation from potential buyers across North America, Europe and Asia, demonstarting the scale and strength of Rothschild’s global capabilities. Rothschild conducted a competitive auction for Visteon Lighting with potential buyers from across North America, Asia, and Western and Eastern Europe, demonstrating the scale and strength of Rothschild’s global capabilities. Specific added value • Successfully positioned Visteon Lighting as a differentiated asset in the highly competitive automotive exterior lighting sector • Stimulated demand among global strategic and private equity parties • Managed a complex, detailed due diligence process involving operations located across North America (U.S. and Mexico), Europe (Czech Republic, Germany and France), and Asia (India and China), and a complex multi-jurisdictional carve-out of Visteon Lighting’s business from Visteon • Assisted Visteon in structuring the transaction and negotiating the sale and purchase agreement and transition services agreement • Maintained competitive tension through the entirety of the auction process, maximizing value and terms for Visteon

VARROC GROUP ACQUIRES VISTEON CORP’S AUTOMOTIVE LIGHTING BUSINESS

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DEEP & FAR

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

www.deepnfar.com.tw AI Magazine 1212.indd 100

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