AI magazine July 2015

Acquisition International • July 2015

60 Seconds With...

We catch up with some outstanding companies currently flourishing within their respective sector.

www.acquisition-intl.com

Can Corporations and Professionals in Germany Cope With the Hacking Malaise?

According to a study, every second corporation in Germany has been a victim of data theft and/or sabotage. We speak to Helmuth Jordan of Jordan & Wagner Rechtsanwaltsgesellschaft mbH to find out how serious the situation is.

Germany: Remaining Europe’s Economic Powerhouse Brockhaus Private Equity GmbH, identifying Germany’s next ‘hidden champions’.

The Golden Age of Investment in Poland We speak to Tomasz Taff, Strategy Advisory Group Director at Baker Tilly in Poland to find out what the future holds for companies in his country.

Acquisition International’s Q2 Review AI caught up with Mafipe M. Chunga, Senior Manager, Deal Advisory at KPMG Zambia. / 17 Juan Carlos Machorro, Partner of Santamarina y Steta and Cecilia Sarabia, Associate tells us about the challenges and opportunities being faced in Mexico. / 18

A.I’s Q2 Review:

Copperstone Capital is an investment management firm founded in 2010 in Moscow. We spoke to David Amaryan, Managing Partner & Chief Investment Officer to find out more about the company.

Ones to Watch In our Ones to Watch section, we shine a light on the companies to keep an eye on this month, starting with Ichino Brugnatelli e Associati, a top law firm based in Milan. / 23

Nigeria: Remaining a Key FDI Destination When considering doing business in Nigeria, thoughts would inevitably turn to two major factors shaping the country’s economy and business environment: oil and corruption.

Following recent elections, however, things are changing. We speak to Osahon Idemudia at Libra Law Office in Lagos to find out more. / 29

Setting Up a Franchise Business in Turkey Erdal Law is an independent full service Turkish law firm in Istanbul, providing legal services to both its local and international clients. AI spoke to Mrs. Feyza Gerger Erdal, the company’s founder to find out more. / 36

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

Editor’s Comment Welcome to another issue of Acquisition International.

This month, we explore the Golden Age of Investment in Poland with Baker Tilly, an independent firm of chartered accountants and business advisers.

Acquisition International’s Q2 review is jam-packed this month as we take a look at some of the most noteworthy trends and transactions of recent months.

We introduce The Desire to Acquire & The Urge to Merge section this month, which showcases major M&A activity and examines how it will affect the wider business world.

Can corporations and Professionals in Germany Cope With the Hacking Malaise?

According to a study, every second corporation in Germany has been a victim of data theft and/or sabotage. We speak to Helmuth Jordan of Jordan & Wagner to find out how serious the situation in Germany is. /38

This month’s Ones to Watch section focuses on Portilla Ruy-Diaz y Aguilar, S.C., a firm of lawyers, experienced and specialised in several areas of the law, and elsewhere, Russell Advocaten outline why the Netherlands is an ideal destination for foreign investment.

News /4 The latest news stories from around the world.

Appointments/8

And of course there’s the usual news, views and regional round ups.

Sector Talk /14 Powered by Zephyr/ Bureau van Dijk.

We hope you enjoy the issue.

Mark Toon, Editor mark.toon@ai-globalmedia.com

Q2 Review /16

Ones to Watch /22 In this section, we shine a light on the companies to keep an eye on this month.

Deal Diary /58 Introduced

by Zephyr/ Bureau van Dijk.

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

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

12/ Anticipating Acquisition Surprises 15/ Copperstone Capital 25/ Cyber Security and its Impact on M&A

Why understanding, anticipating and managing cyber security risks is crucial.

29/ Nigeria: Remaining a Key FDI Destination

Why oil and corruption are no longer the only factors shaping Nigeria’s business community.

33/ The Desire to Acquire & The Urge to Merge

Showcasing the most noteworthy M&A activity from around the globe.

36/ Setting Up a Franchise Business

in Turkey 40/ Germany: Remaining Europe’s Economic Powerhouse 42/ The Golden Age of Investment in Poland 44/ The Netherlands: Investment Destination 45/ An Alternative to Traditional Corporate Finance: Securitisation Cell Companies in Malta 46/ Impact of Transactions on Brands

Find us on/

48/ 60 Seconds With...

We catch up with some successful companies currently flourishing within their respective sector.

Acquisition International - July 2015 3

www.acquisition-intl.com

News: from around the world

VAT and Partial Exemption: What You Need to Know The rules governing VAT are continually changing due to new legislation being introduced, updates in HM Revenue & Customs’ (HMRC’s) guidance and interpretation and various case law precedents and decisions being released over time. We hear from Kamlesh Chauhan, VAT Manager, haysmacintyre to find out more.

In the UK, the year end for value-added tax (VAT) has just passed for the Corporate Finance industry.

Many Corporate Finance businesses will often not have considered their VAT position in any detail for a number of years, which can be a perilous position to be in.

corporate finance transactions. These issues can often cause errors in the VAT treatment of income or transactions. This will inevitably lead to errors in your partial exemption calculations. Without going into too much detail, the main areas of difficulty are briefly set out below:

The issues with partial exemption The majority of businesses involved in arranging any corporate finance transactions will be partly exempt for VAT purposes. Corporate finance transactions for VAT purposes include debt and equity private placements, mergers and acquisitions, debt restructuring, divestments, and IPO’s.

•

• • •

There are two potential adjustments required after the VAT year end for all partly exempt businesses, these are as follows: 1. Annual adjustments - Many businesses simply fail to carry out an annual adjustment or get the calculations wrong. The correct application of an annual adjustment can often improve your VAT recovery position.

•

2. Capital Goods Scheme adjustments - An annual adjustment is required for all VAT that has been reclaimed on capital assets based on the change in annual recovery rate from the rate applied to the original purchase. For VAT purposes capital assets include commercial property (purchase and/or refurbishment) costing over £250,000 and computer hardware costing over £50,000.

•

The VAT year end for many businesses ended in March, April, or May (these are the default options depending on your VAT return period although it is possible to agree a different VAT year end from HMRC if required). The adjustments noted above would normally be included in the VAT return following the year end (i.e. for the quarter ending June, July, or August).

The annual adjustment requires you to apply the normal VAT recovery method using annual data, rather than on a quarter-by-quarter basis. The difference between what can be reclaimed on an annual basis, compared to with what has been entered in the VAT returns, then forms the annual adjustment. Many businesses are unaware of this requirement and could be losing out on additional VAT that would be reclaimable as a result.

Other issues affecting Corporate Finance businesses There are a number of other VAT issues and areas of difficulty for any business involved in arranging

4 Acquisition International - July 2015

• •

Advisory fees and success fees for arranging transactions and whether they can qualify for exemption?

Fees for defending against hostile transactions.

What is the VAT treatment?

Fees for arranging trade and asset sales and whether they can be structured to avoid VAT? Services provided to a Holding Company and whether they are considered to be in business for VAT purposes. Whether there are any ways to structure the transaction to try to maximise possible VAT recovery for the purchaser?

Recharged expenses charged to a client, when do you need to charge VAT? Retainer fees and whether they are always taxable, sometimes taxable, or exempt from VAT? Can the VAT treatment of retainer fees change over the life of a project?

Fees charged to overseas entities, especially those outside of the EU, and the implications for your partial exemption calculations?

Beware of HMRC It is worth noting that HMRC can go back up to four years to assess for any errors. In the current climate, with the need to increase tax revenues, the Corporate Finance sector is an area that could easily be targeted

by HMRC. A simple error, such as treating the VAT treatment of a transaction incorrectly can have knock on effects on your VAT recovery and annual adjustment, compounding the error and leading to a significant amount of VAT over a four-year period.

In addition to the VAT due, HMRC will seek to charge penalties and interest. The amount of the penalty will range from 15% to 30% of the VAT owed for a “careless” error identified by HMRC. Deliberate or concealed errors will attract even higher penalties. The actual penalty amount is subject to HMRC’s assessment of whether the business took “reasonable care” or not in making the error.

Improve your VAT recovery The VAT year end is an opportune time to review your VAT recovery position. It may be possible to improve the VAT recovery position by considering the use of a different partial exemption method. Many businesses are still using the standard method of partial exemption.

This is especially true given that many exempt fees tend to be as a result of a transaction taking place where the fees are based on the realised value of the transaction, which does not reflect the costs used to generate the fees. Many businesses in this sector will benefit from a special method based on the number of projects or transactions being worked on, rather than the standard method based on turnover.

Although it can be difficult and sometimes time consuming to agree a special method with HMRC, the benefits can be significant.

Even if you have agreed a special method with HMRC, it can often be worth reviewing the application of the method and whether it is still fair and reasonable for the business. The method may have been agreed with HMRC some time ago, after which business operations may have changed and improvements to VAT recovery can be made.

Best practice We would encourage all partly exempt businesses to review and consider their VAT position at least once a year and seek specialist advice to ensure that they not only avoid the pitfalls, but also take advantage of potential improvements to their VAT recovery position. VAT is not straight forward, especially in this sector, the complexities of the VAT rules mean that continuous monitoring and review is recommended as best practice. The regular reviewing of your VAT position by external advisers also demonstrates, if any errors do arise, that “reasonable care” is being taken by the business, which will help mitigate and reduce any penalties that HMRC may seek to apply.

News: from around the world

News: from around the world

New Kbi Small Cap Investment Strategy Seeded By Global Multi-Manager Having spent more than a decade investing in broad market strategies, Kleinwort Benson Investors has held many stocks at the smaller end of the scale. Investing in Small Caps is a natural extension of the KBI approach, but with the appetite amongst existing clients for a dedicated Small Cap strategy building steadily, the Dublin-based manager began to take a closer look at the Small Cap universe last year. It is on the back of its research and a programme of back-testing that KBI has introduced a new Small Cap investment strategy, investing across the Developed Markets.

The portfolio has been seeded to the tune of €45m by a large global multi-manager.

Chief Investment Officer, Noel O’Halloran explains the background in more detail. “A fundamental element of our stock selection thesis is that you can identify companies with the potential to outperform by analysing their dividend pattern and the way in which the dividend is financed.

This outperformance comes from higher levels of profit surprises, dividend growth and dividend yield. Dividend surprises and earnings surprises are closely connected in both Large Cap and Small Cap universes, but dividends and dividend changes are far less anticipated or researched, so the inefficiencies and alpha potential are greater.”

KBI tested Frontier, Emerging Markets and Global Small Cap and found the universe to offer many more opportunities than it had originally expected, more volatility, a greater number of mis-valuations, and dividends less recognised or ignored. Despite a proliferation of stocks and the high level of dividends available in the Frontier markets, the relationship between dividends and profitability breaks down; what is more, very few stocks passed KBI’s screens, so the firm rejected any notion of a Frontier strategy, which plays to neither its’ strengths or preferences.

“Aside from our focus on Total Returns, other elements of our approach are also helpful in a much bigger Small Cap universe”, says O’Halloran. “Our systematic and rules based approach is helpful when dealing with such a large universe of stocks, particularly as the intra-market stock dispersions are also higher. We maintain the structure and key elements of our investment process along with our approach to portfolio construction.

We can build portfolios which fulfil our total return requirements while still achieving above average quality and below average valuation.

Given the inefficiencies we have identified, these portfolios display a better equilibrium between pay-out, reinvestment and growth.

We maintain our approach to industry and regional segmentation along with our diversified exposure at the stock level. Encouragingly, we find the active share of our Small Cap portfolios is typically 10% to 15% higher when compared to their broad market counterparts.”

Thinking behind the new strategy • Small Cap stocks display classic growth trap characteristics. They combine capital raising and low pay-outs with low return on investments, slower earnings growth and high valuations; • Compared to their Large Cap brethren, growth projects are (on average) less profitable, because costs and risks are both higher. All companies have to manage the trade-off between pay-out, reinvestment and growth.

Small Caps reach a more profitable equilibrium when a lower level of growth activity is pursued; • From a Total Return perspective, the level and availability of dividends is comparable with Large Caps, but the variability of payers is higher. There is a strong relationship between dividend growth and profit growth over time, but dividends are usually overlooked; • ‘Small’ equals ‘New’ no more than ‘Growth’ equals ‘Profitability’;

Investment team The Small Cap Strategy will be run by KBI’s deeply experienced Global Equity Strategies team, led

by David Hogarty, Head of Strategy Development and Gareth Maher, Head of Portfolio Management, alongside Portfolio Managers Ian Madden, James Collery, John Looby and Massimiliano Tondi.

KBI investment process • Step 1: the first step involves the creation of regional industry group (RIG) segments from the MSCI Small Cap Universe. Stocks with a below average yield for the segment are eliminated, with lower yield stocks, countries and industries all qualifying; • Step 2: stocks and segments which fail the firm’s sustainability, quality and growth criteria are eliminated at this stage, and the remaining stocks ranked; • Step 3: the portfolio, targeting preferred financial criteria and highest ranked stocks is then created.

Continuing growth KBI manages $US 8.3bn² across its range of Global Equity, Environmental and Multi-Asset strategies for public and corporate pension schemes, subadvisory investors, foundations and endowments, wealth managers, private banks and investment intermediaries. The firm has been highly successful in winning a number of significant mandates in the public funds arena over the course of the last 12 months - the Los Angeles Fire and Police Pension Fund, Fonds de Compensation and the Shetland Islands Pension Fund included. The firm has been particularly successful in growing its share of the North American market, which represents almost half of its assets under management today, and boasts a diverse international client base throughout the UK, Europe and Asia.

Operating with a disciplined, repetitive, valuationoriented process, the Small Cap strategy will be actively managed to maximize upside potential, whilst at the same time managing downside risk.

The Strategy will invest across the MSCI Small Cap Universe, which (at 31 March 2015) included some 4,256 dividend paying stocks¹ across Europe (735), the Pacific Basin (1,103), Emerging Markets (1,344) and North America (1,074). KBI’s investment process will whittle the firm’s investment universe down to 400 stocks, across 84 regional industry groups, the Strategy holding circa 360 stocks at any one time.

“We are fortunate to have built a strong and stable team, across both Asset Management and Client Service”, said O’Halloran. “Many of my colleagues have been with the firm for more than a decade now. The stability and predictability which that delivers is hugely beneficial and has given us a solid platform for growth. This latest initiative is prompted by investment conviction rather than commercial need, and has been introduced as a direct response to client demand. That will always be our preferred approach from both a business and capacity perspective, and we expect to announce other exciting initiatives in the months ahead.”

Acquisition International - July 2015 5

News: from around the world

4tell™ Launches New Website for Real Estate Industry Solutions 4tell™ Solutions, LP, a leading provider of SaaS platform solutions for Real Estate and Infrastructure Performance Management, is pleased to announce the launch of its new website - www.4tellsolutions.com. As a core part of 4tell™’s growth strategy, the new site establishes the foundation for the expansion of online services available to its customers.

4tell™ develops technology that optimizes financial, energy, environmental, security and social performance of real estate portfolios and infrastructure assets. The Company’s iPlan™ platform enables standardized capture and normalization of traditionally disparate and unstructured data transforming it into actionable information. 4tell™’s solutions enable capital investment strategies that align with business objectives to facilitate the most efficient use of available capital and natural resources.

“As our business continues to grow, this framework will evolve to better serve our customers with a full ‘self-service’ platform for education, training, technical services and user support. The website will also be a great industry resource for best practices, benchmarking and emerging trends,” said Julia MacMillan, CMO of 4tell™. “We are excited to leverage our online presence to reach a much larger audience of real estate professionals and AEC firms who benefit from the efficiencies and bottom line results delivered through our platform. A superior customer experience and best-in-class solutions are the cornerstone for our continued growth.”

A Global Recession Is Possible, Investors Urged to Take Action One of the world’s largest financial advisory organisations has today confirmed it is “remaining vigilant for its clients” about possible market corrections and urges clients to take precautions in case this happens.

The message from Nigel Green, the founder and CEO of deVere Group, which has $10bn under advice, comes after a turbulent few weeks in global financial markets.

Mr Green comments: “There appears to be increasing speculation amongst market analysts that a market downturn should be expected. They say this could possibly be triggered by the events of recent weeks including more than $3tn being wiped off China’s stock market over the past month, the Greek debt crisis reaching giddying heights, and the U.S. Federal Reserve being likely to raise interest rates this year.”

He continues: “There is growing noise regarding concerns about China’s real economy which is heavily indebted and slowing – despite the latest official economic data from China being largely better than expected.

“Similarly, whilst there has been some progress in the Greek saga and the IMF is now calling for massive debt relief, many experts opine that the measures are simply masking the more fundamental issues which will take decades to resolve.

“And despite the eventual U.S. rate rise – probably taking place this year judging

by Janet Yellen’s comments - already being partially priced in, analysts admit that the full impact on markets cannot be fully predicted.”

The deVere CEO concludes: “If the U.S. raised interest rates excessively and China’s growth fell further, there is no doubt the markets would plummet and the uncertainty would potentially generate a global recession. However, it remains my belief that this is unlikely to happen.

“I believe the U.S. will be cautious with any rate rises; that China, and indeed Japan, will stoke domestic demand; and that Europe could also benefit from a low Euro and, once again, achieve the growth that many EU countries desire.

“In short, whilst we remain vigilant for clients on market corrections, I expect that although the next few months may well be volatile, there is plenty of upside potential too. The history of stock market investing proves, after all, that optimism pays.

“Investors should seek a good fund manager who will be able to help take advantage of these opportunities and secure the best stocks at the right time for their clients.

“In addition, investors need to ensure that they have a properly balanced portfolio, which is one diversified across geographical regions, assets classes and industrial sectors. A well-diversified portfolio is a vital tool to managing risk and gaining advantage, especially in times of increasing market volatility.”

Acquisition International - July 2015 7

www.acquisition-intl.com

Appointments: from around the world

Ericka L. Ayles Joins Brookwood Financial Partners, LLC as Director of Finance Brookwood Financial Partners, LLC, a leading real estate investment and asset management company, have announced that Ericka L. Ayles has joined the firm’s senior management team as Managing Director and Director of Finance at its Beverly headquarters.

Ms. Ayles will be responsible for supervising the general accounting, financial reporting, budgeting, financial analysis and tax reporting for Brookwood and all of its affiliated entities. In addition, Ms. Ayles will oversee the cash management and banking relationship functions for Brookwood and assist in the acquisition, asset management and disposition process for each of Brookwood’s portfolio investments.

“We are thrilled to have someone with Ericka’s management, accounting and reporting expertise join our team,” stated Thomas Nicholas Trkla, Brookwood’s Chairman and Chief Executive Officer.

“She is a well-respected and proven leader in the real estate industry and has tremendous experience building and running portfolio accounting teams.”

Prior to joining Brookwood, Ms. Ayles worked for JDJ Family office Services, a private financial and administrative service company for high net worth families and individuals, where she was a client manager providing accounting, tax coordination and planning, estate planning, financial management and business consulting services to a portfolio of clients. Previously, Ericka worked at New Boston Fund, Inc., (“New Boston Fund”), where she was a Vice President of Portfolio and Financial Reporting.

Ms. Ayles worked at New Boston Fund from 2002 until 2014 and managed a staff of 25 property and portfolio accountants and was directly involved with property, portfolio and fund accounting. Ms. Ayles began her career in public accounting at PricewaterhouseCoopers, LLP as an Associate and Senior Associate focusing on technology and higher education clients.

Ms. Ayles is a graduate of Bryant College where she received her BS degree in Business Administration with a concentration in Accounting.

Hershey Announces New Chief Marketing Officer The Hershey Company have announced tthat marketing veteran Peter Horst will join the company as Senior Vice President, Chief Marketing Officer, effective July 27.

Horst joins Hershey from Capital One Financial Corporation where he served as Senior Vice President, Brand Marketing, and prior to that, Chief Marketing Officer for Capital One Bank.

“Peter is a seasoned marketing leader who has the skills, experience and proven track record to continue to evolve our marketing organization, build our iconic brands and drive global growth for the company,” said J.P. Bilbrey, Chairman, President and CEO of The Hershey Company.

Mike Wege, former CMO, has been appointed Senior Vice President, Chief Administrative Officer, and continues as a member of the company’s Global Leadership Team. In this role, Wege will continue to lead the company’s global organizational agility and growth initiative and other strategic projects for the company.

8 Acquisition International - July 2015

“Mike is a highly experienced leader, and I appreciate his commitment to help position the company for future growth as we accelerate our business in new markets around the world,” added Bilbrey.

Horst is a marketing veteran with more than 25 years of experience at companies including General Mills, Verizon Business Online, Ameritrade and Capital One. As Senior Vice President of Brand Marketing at Capital One, he supported Capital One’s diversified businesses in credit cards, branch and Internet banking, home loans, small business and personal lending, auto finance and international markets. His team was responsible for driving integrated marketing, new product development and market research.

Horst holds an M.B.A. in Marketing & General Management from Dartmouth College, Tuck School of Business and a B.A. in History and Literature from Harvard.

Appointments

Appointments: from around the world

B2R Finance Adds Chief Financial Officer B2R Finance, a leading lender for single-family rental (SFR) property investors have announced that Darren Thompson has joined the company as chief financial officer and executive vice president of strategy. In this role, Thompson is responsible for oversight of the finance, accounting and control, risk, regulatory and corporate strategy functional areas and will report to CEO Jason Hogg.

Thompson’s experience in the real estate and mortgage industries spans more than 30 years and includes several executive leadership roles at prominent companies including American Express, Fannie Mae, Morgan Stanley and Goldman Sachs.

Most recently, Thompson was a founding partner of Railfield Partners, LLC, a real estate and financial services advisory and asset management boutique.

“Darren is a veteran executive who brings industry insight and valuable experience managing rapidly scaling fintech businesses,” said Hogg. “Darren’s broad expertise ranges from capital efficiency and

financial management to business innovation and strategic partnerships across a variety of industry verticals. In our previous work together, Darren proved to be a dynamic leader and his addition to the B2R team ensures we are well positioned to continue to diversify our business.”

Previously, Thompson was the chief financial officer at Revolution Money, now American Express Serve, and joined American Express as a special advisor following American Express’ acquisition of the company. He also held the position of senior vice president and head of credit finance at Fannie Mae, where he was responsible for pricing and risk analytics for the company’s single-family and multifamily portfolio and guarantee businesses.

Thompson has also held senior positions with Avenue Capital, where he served as a senior portfolio manager, and with Morgan Stanley and Goldman Sachs, where he rose to the rank of managing director. Thompson earned his M.B.A. from Harvard Business School and his B.A. from Harvard College.

Aqua America CEO Franklin Names New Chief Operating Officer and Executive Vice President, Strategy and Corporate Development Aqua America, Inc. CEO Christopher Franklin have announced the appointment of two new members to his senior team. Franklin appointed former Regional President Richard “Rick” S. Fox to executive vice president and chief operating officer and Daniel J. Schuller, Ph.D. to the new position of executive vice president, strategy and corporate development.

Fox will replace Franklin whose appointment to CEO was effective July 1. As COO, Fox will be responsible for Aqua America’s regulated operations ($756 million in revenues), including engineering and environmental compliance.

“During his 14-year tenure at Aqua, Rick has made significant contributions to the company’s success including his key role in the consolidation of the company’s multiple customer service operations that existed as a result of the company’s numerous acquisitions. Since Rick has been regional president, he has worked closely with our state operations teams to refine and improve the efficiency of the company,” said Franklin. “Rick and I have worked closely for nearly a decade and a half and he has been my virtual deputy COO. I look forward to his

leadership in the continued achievement of our primary mission of providing quality water and wastewater service to our customers.”

Fox has been regional president for Aqua America since January 2012, heading all of Aqua America’s utility operations in Texas, Illinois, North Carolina, Indiana and Virginia. Prior to assuming the role of regional president, Fox was vice president, customer operations, where he was responsible for all customer service operations for Aqua America’s regulated operating subsidiaries, including the company’s national customer call centers, national meter operations, and company-wide billing and collections.

Fox joined Aqua America in 2002 as manager of customer service following 17 years in the chemical manufacturing industry in both operations and technical management. He earned his B.S. in chemical engineering from Virginia Polytechnic Institute and State University, and his M.B.A. from Villanova University, where he achieved Beta Gamma Sigma honors. Fox is a member of the American Institute of Chemical Engineers.

Schuller will be responsible for assisting the chief executive officer with developing, communicating, executing, and sustaining Aqua’s strategic initiatives, with an emphasis on growth. Additionally, he will be responsible for the company’s overall corporate development including acquisitions of regulated and market-based businesses. He comes to Aqua America from J.P. Morgan Asset Management – Infrastructure Investments Group where he has been an investment principal since 2007, providing strategic leadership as a director of portfolio companies including SouthWest Water Company— of which he was responsible for the 100 percent stake held by J.P. Morgan-advised investors—and Summit Utilities. Specifically for SouthWest Water, Schuller guided the company’s turnaround and led its growth strategy, assessing both organic growth and acquisition opportunities. Prior to joining J.P. Morgan, Schuller was a manager at Mars & Co., an international strategy/general management consulting firm, where he led consulting engagements related to growth and profitability for Fortune 500 companies and conducted due diligence for private equity firms.

Acquisition International - July 2015 9

www.acquisition-intl.com

Appointments: from around the world

Smarkets Betting Exchange Names Alexander Wheldon as Company's First Chief Marketing Officer European betting exchange, Smarkets, has appointed Alexander Wheldon as the company’s first Chief Marketing Officer (CMO).

The new role was created to expand on Smarkets’s tremendous growth over the past year and support development of its primary UK customer base and help the business enter new markets.

Smarkets has grown by leaps and bounds over the past year, showing 400% YOY growth. With pre-tax profit estimates of £6mm for 2015, the company valuation has swelled to over £100mm on its way to a possible IPO. The growth has been reflected in active traders, which has quadrupled from the same period last year.

Wheldon will work between Smarkets’s offices in London and Malta, overseeing all facets of Smarkets’s marketing initiatives.

Commenting on the appointment, Wheldon indicated that Smarkets’s drive for customer experience and data-driven initiatives is what attracted him to the position. He says: “Jason Trost and the leadership team at Smarkets have done a tremendous job, by continuously innovating the best exchange product in the market and leading the way with data-based decision making. I look forward to carrying the torch into various growth initiatives to come.”

Mr Wheldon has served as an executive and founder across the iGaming and advertising markets for his entire career. Prior to Smarkets, Wheldon was founder and CEO of advertising technology company Kanary.

A demand-side and data-management platform for brands and marketing agencies, it was acquired last year by San Francisco-based Gravity4. He was also a pioneer in mobile gaming as co-founder of Torontobased Vegas Wireless Entertainment, creators of one of the world’s first mobile gambling platforms.

Lancaster Pollard Announces Leadership Changes Lancaster Pollard have announced that Tom Green, CEO, and Brian Pollard, president, will transition dayto-day management of the firm and have announced a new leadership team. Nick Gesue, previously senior vice president and chief credit officer with Lancaster Pollard, has been named CEO and Kass Matt, most recently a managing director with the firm, has been named president of Lancaster Pollard Holdings Company, LLC. The changes are effective July 16, 2015. Green and Pollard will continue to serve on the board as chairman and vice chairman respectively.

As part of the leadership team changes, the firm also announced that Steve Kennedy, managing director and regional manager for the Great Lakes and South Central regions, and Ken Gould, managing director and regional manager for the Northeast, have both been promoted to senior managing director.

In addition, Kennedy has been named senior governmental liaison while Gould will chair the firm’s strategic planning and development committee.

Kennedy and Gould, as well as Gesue and Matt, all members of Lancaster Pollard’s executive committee, have been with the firm for over a decade. Several additional long-serving Lancaster Pollard employees

10 Acquisition International - July 2015

will also take on enhanced leadership roles in the firm’s new management committees.

Lancaster Pollard was founded 27 years ago in Columbus, Ohio. The company has grown into a leading national firm with six offices, over 100 employees and a track record of over 1,400 closed transactions in excess of $11.1 billion that have helped health care, senior living and housing providers expand and improve their services.

After nearly three decades of success, Pollard is proud of what the company has accomplished and excited for its future.

ago as we recognized the need to best harness our firm’s growing talent base. Although Brian and I will continue with a very active role in the company, I’m extremely confident in the abilities of our team to maintain and enhance Lancaster Pollard’s commitment to our clients and the industries we serve.”

“The remarkable growth and success we have enjoyed is truly a testament to the talented people we have at Lancaster Pollard. It is the right time to better leverage the strengths of our team,” said Pollard.

Gesue and the rest of Lancaster Pollard’s leadership team will be busy overseeing the firm’s continued expansion as the company has experienced an annual growth rate of approximately 30% for the past 15 years and has recently expanded its services.

Lancaster Pollard offers a full range of investment and mortgage banking, private equity, balance sheet financing, M&A and investment advisory services.

Despite the expansion and staff growth, however, there are some things that will remain the same as the firm moves forward into the next generation.

Green, who started as CEO in 1997 and helped turn the firm into one of the nation’s top seniors housing lenders, sees the change as a natural progression of the firm’s evolution. “We are fortunate to have a deep bench of highly intelligent and proven professionals,” said Green. “We began this transition a couple years

“Tom and Brian have always demonstrated an unwavering commitment to delivering the best possible solutions and service to our clients. This has become the foundation of everything we do,” noted Gesue. “This will not change as we transition to the next chapter of Lancaster Pollard.”

Appointments

Appointments: from around the world

Haldex Appoints Lena Nordin as SVP Human Resources Lena Nordin has been promoted to SVP Human Resources and joins the Group Management team.

Lena Nordin has worked for Haldex as VP Talent Management since April 2014.

Lena Nordin was recruited to a newly formed position as VP Talent Management approximately one year ago. Lena Nordin has during her year at Haldex implemented a number of improvements within areas such as leadership and employee development, employer branding and recruitment.

“Lena has gone from strength to strength and we feel that she now is ready to take on the Human Resource responsibility for all of Haldex. Lena has the right attitude and experience to lead the way towards a culture based on high performing teams where leadership development will be one of our important focus areas.”, says Bo Annvik, President and CEO of Haldex. “I would also like to thank Pete Lazar who has held this position the past four years.

He has successfully transformed a decentralized HR organization in each business unit to a global HR

organization. I’m very pleased that Pete is continuing to work for Haldex as he is a very experienced member of our team.”

Prior to joining Haldex, Lena served as Head of CoE Talent Management at Baxter-Gambro Renal and Vice President Global Learning & Development at Gambro AB. She has also been responsible for the Human Resources function in Sweden, as well as HR Business Partner for the global R&D function at Gambro. Before joining Gambro, Lena was responsible for HR at Ericsson Mobile Platforms. Lena is 50 years old and has studied Business Administration in combination with Organization and Leadership Development at Stockholm University, Sweden.

Florida Community Bank Names Jennifer L. Simons to Post of Deputy Chief Financial Officer Florida Community Bank President and Chief Executive Officer, Kent S. Ellert have announced the appointment of Jennifer L. Simons to the post of Deputy Chief Financial Officer. In 2014, Ms. Simons joined FCB as the Chief Accounting Officer and will retain these duties in her new role.

immediate and substantial contribution of superior skill to our Company. She is a thoughtful and well organized business partner, and has elevated the organization through her leadership.” He continued, “With her deep experience and strong leadership skills, Ms. Simons will help us improve efficiency and continue to operate safely and soundly.”

Upon joining the Company in 2014, Ms. Simons brought over twenty years financial experience to FCB. Most recently she was Vice President and Senior Manager at PNC Financial Services Group, where her responsibilities included accounting policy, liquidity management and financial forecasting. Prior to this position Ms. Simons held various leadership positions with US Bancorp, TCF National Bank, GMAC Residential Capital and GE Capital Fleet Services. Jennifer Simons is a graduate of the University of Wisconsin-Madison and a Certified Public Accountant.

In making the announcement, Kent Ellert commented, “Jennifer Simons has made an

Acquisition International - July 2015 11

www.acquisition-intl.com

Anticipating Acquisition Surprises Acquisitions are among the most far-reaching, ambitious business decisions that senior executives may face in their leadership of a company. And while the opportunities enabled by acquisitions are often compelling, the effective management of an acquisition process and realization of value depends on anticipating and preparing for post-closing surprises.

From the perspective of a CEO or CFO, such anticipation and preparation requires looking beyond diligence checklists, beyond inflexible integration plans, and beyond the false security of a single representation of how the future combined business will perform and evolve.

As such, beware of checklists! And expect that most acquisitions will encounter the unexpected after closing. Savvy acquirers may increase their effectiveness in handing those surprises through more deliberate pre-closing diligence in areas of inherently greatest uncertainty.

This overview will describe the benefits of an acquisition due diligence campaign driven by areas with greatest potential for surprise.

This approach to due diligence provides more actionable input to deal evaluation and integration planning, as such better preparation for the inevitable surprises from acquisitions.

Organizational surprises “Proper assessments of people who aren’t your employees may be impractical. That said, acquirers should temper their optimism that the target’s management will be just fine. Planning for more changes, perhaps many more changes, in the target’s team would be sensible in most cases I’ve worked with,” counseled a Senior Vice President of Human Resources with two decades of acquisition diligence and integration experience.

Confirmatory due diligence ≠ due diligence Evaluation of potential acquisitions involves a wide range of audits, assessments and analyses that are intended to inform a prospective buyer’s decisionmaking and to prepare for the days and months of post-closing integration work. While some executives may reflexively reach for due diligence checklists, certain areas of greatest potential for post-closing surprises, notably those related to people, customer relationships, and company culture, simply aren’t conducive to checklists.

Confirmatory due diligence assessments, including quality-of-earnings reports; review of accounting, tax, and legal records; and environmental studies often have potential to serve as “red flags” for valuation of a transaction or as inputs to contractual negotiations for indemnifications or disclosure obligations. However, diligence efforts must also include more subjective and dynamic areas such as strategic sourcing relationships, operating capabilities, customer relationships, company leadership, organizational strength, and competitive response. The more subjective of areas of due diligence may be more inherently more challenging to assess, though these are often essential to the anticipated value of the acquisition.

In a recent study by Joseph Feldman Associates of middle market acquisitions, interviews with nearly ninety company executives and advisers identified post-closing surprises as more typically found outside of typical confirmatory due diligence areas. Over reliance on diligence checklists may under-emphasize important pre-closing diligence in areas with highest surprise risks, such as talent/organization, customer/market, and integration-focused operations assessments.

12 Acquisition International - July 2015

Over 80% of those interviewed in our research indicated that all or most senior management of the acquired firm was retained post-closing.

Yet 40% of those interviewed encountered “organization and people” post-closing surprises following the acquisition.

As a middle market company Board of Directors member reflected, “…we found out after the acquisition that the management team did not talk to each other. During negotiations they had presented the team as a tight group, and in reality they had very diverse views regarding the future of the company.”

Acquiring a business often reflects the assessment of whether the target company’s leadership and organization have operated effectively, and the outlook for their doing so in support of future growth and value to the acquirer. It is important to recognize that post-acquisition ownership may bring new expectations, different priorities, and often an accelerated plan for growth, any of which may lead to organizational surprises.

Further, the acquired company’s management may have been well-suited to an earlier phase of its existence, while ill-suited to managing as part of a larger enterprise. The leader of a manufacturing company described the management team of an acquired business as “totally competent in running the business; totally incompetent in doing things differently to grow it.”

Customer and market-related surprises Establishing a clear understanding of a target company’s customers and market position is critical to assessment of value and risk. However, that clear understanding may be elusive for several reasons inherent in an acquisition process, thus potentially leading to post-closing surprises.

First, many prospective sellers limit direct access to customers during a sale process, whether for competitive reasons, toward minimizing disruption of ongoing business relationships, or reflecting limited internal disclosure to their sales organization of the pending consideration of a company sale.

The “acquired company did what they could to keep the acquiring company from talking with customers in detail,” reported a C-level executive in the home services industry. This common constraint on diligence may lead to unexpected outcomes post-closing.

Second, certain customers may be prompted by the change in ownership to seek new pricing, consider competitive offers, or perceive new risks in their relationship with the target. Clear determination of the risk of such potential actions may be speculative in advance of a transaction.

The CEO of a consumer products company encountered a major customer loss shortly after an acquisition closed. While this possibility was considered for integration planning and valuation purposes, the impact required a few years to recover.

The CEO identified two notable learnings: “first, we hadn’t adequately tempered our projections for Year One post-closing to account for the unknown; doing so would have been prudent vis-à-vis our investors, without needing to ease expectations from our sales team or retained management; second, for product line acquisitions, the right transition time for our key sales relationships is immediate; individual accounts matter too much to defer integration.”

Finally, the target company’s unique vantage point in an evolving market may be simply beyond the view of a potential buyer, notwithstanding careful interviews with management or outsiders with perceived expertise on relevant trends.

Anticipating Acquisition Surprises

Scenario analyses As described above, the risk for major post-closing surprises may be highest in more subjective business areas such as related to organization, customers, competitors, and broader market conditions. Such surprises are far beyond the scope of checklists that may provide a false assurance that all the bases have been covered. How can an organization contemplating an acquisition do better at anticipating the wide range of possibilities that might happen?

For many companies, the use of scenario analysis can provide a planning tool that overcomes fundamental uncertainty or ill-preparedness ahead of completing an acquisition. In brief, scenario analysis prompts a company’s leadership to think about those important aspects of the future, especially considering factors over which the firm may have little or no control. These might especially include competitive response to the acquisition from suppliers, customers, government, and individuals whose careers may be impacted by the deal.

And while unforeseen developments may sometimes limit an acquisition’s impact, other surprises can also prove quite positive as previously unforeseeable opportunities are realized.

Acquiring firms are advised to take a broad view of pre-closing diligence, considering both traditional “confirmatory” diligence along with more subjective efforts to understand an uncertain future. After all, companies prepared to consider acquisitions among their options may thereby achieve growth and competitive position that is otherwise unachievable.

Joseph Feldman is President of Joseph

Feldman Associates, a Chicago-based corporate development consulting firm founded in 2003.

Joseph Feldman Associates provides acquisition and other strategic transaction consulting for growing companies and their investors. For more about acquisition surprises, download “Middle Market Acquisitions: If I Had Only Known” at www.josephfeldman.com.

Imagination becomes an essential ingredient to effectively considering a range of alternative futures that might require action by the company. And while scenario analysis may be a routinely useful exercise, the greater uncertainty and newness associated with acquisitions may make such “what if” thinking far more critical to a company’s success.

According to Patrick Marren, Principal of the Futures Strategy Group, LLC, a leading scenarioplanning consultancy, “Scenario planning can help organizations identify key market fault lines, critical success factors for acquisition, and potential ‘rogue waves’ coming from outside their accustomed context that could disrupt their entire industry. It also allows them to ‘rehearse the future’ in a far deeper way than merely going down a checklist ever could.”

Finally, scenario planning can be used in integration implementation as a team-building exercise to bring key people from an acquired entity swiftly up to speed on the acquiring organization’s strategic vision of the future.

Start integration planning early... very early Getting an early start with integration planning may be helpful in reducing the risk of surprises and better preparing a company to face surprises encountered.

For example, involving sales, marketing, and operations executives in certain pre-closing activities can assure operational input into the deal valuation and key operational risks. Market-facing executives often have relationships with companies that may be interesting acquisition targets or have insights regarding companies whose market position or business practices would make it unattractive.

Further, operations executives will add certainly value to scenario analyses and planning to consider the range of post-closing outcomes for related to customers, strategic suppliers, and competitors.

Summary “Great strategy, planning and integration execution are essential, but not sufficient to ensure success with acquisitions. There will be surprises”, reflected the chief executive officer of an industrial products company.

Acquisition International - July 2015 13

www.acquisition-intl.com

powered by

Media The media sector had a disappointing start to 2015, closing down by both volume and value, both of which represented the lowest result for some time for the industry. The last time volume plumbed such depths was in the second half of 2013, while value has not been this low since the opening six months of 2011.

The months from January to June saw 631 deals worth an aggregate USD 12,188 million signed off in the media sector, according to Zephyr, the M&A database published by Bureau van Dijk. In terms of value this represents a 9 per cent decline on the second half of 2014, when dealmaking of USD 13,454 million was announced. By volume the drop was 15 per cent from 739. Year-on-year the situation was only slightly better in terms of deal numbers while value was even worse, declining from USD 23,089 million in the first half of 2014, although this was the most valuable period since the second half of 2007. Although these results are disappointing, they are not so far behind a couple of years ago. Between H1 2011 and H1 2012 results varied between USD 10,445 million and USD 14,372 million while in H2 2012 and H1 2013 value totalled USD 16,829 million and USD 16,845 million, respectively. As such, it is possible that investment is simply levelling off after particularly impressive performances in the second half of 2013 and the opening six months of 2014. In addition, results are still some way ahead of the nadir reached during the global financial crisis; in the first half of 2010 just USD 6,471 million was invested in the sector.

As always, it is the high value transactions which make the difference between a pleasing result and a disappointing one. Therefore, it is no surprise to see that only one deal announced in the first half of 2015 was worth more than USD 1,000 million. This was UK broadcaster ITV’s USD 1,226 million acquisition of Dutch radio and television programmes producer and broadcaster Talpa Holding. The deal was originally announced back in February and closed in May. ITV’s chief executive, Adam Crozier, said the deal builds on the firm’s existing international content business and moves it closer to establishing itself on a global level.

Number and Aggregate Value (mil USD) of Media Deals Globally: 2006-2015 YTD (as at 30 June 2015)

Number and Aggregate Value (Mil USD) of Media Deals Globally by Deal Type: 2006-2015 to date (as at 30 June 2015)

Deal half yearly value Number (Announced date) of deals

Aggregate deal value (mil USD)

Unsurprisingly given the disappointing value result, the other deals announced over the period had considerably lower considerations. In fact, the secondlargest of the six months was worth less than half this amount. In April Oaktree Capital Management LP, Angelo Gordon & Company LP and JPMorgan agreed to sell shares in Chicago-headquartered newspaper publisher Tribune Media as part of a secondary offering worth USD 564 million. This was closely followed by Sweden-headquartered Nordic Cinema being majority acquired by Bridgepoint Advisers while existing shareholder Bonnier reinvested for a reduced 30 per cent stake. The deal is worth USD

546 million and is expected to complete at some point during the summer. Other media companies targeted in the first half of 2015 include Brazilian educational book publisher Abril Educacao, Cayman Islandsheadquartered online news website operator Sina and Chinese film and television programme distributor Zhejiang Yongle Film Production.

Given that the aforementioned Talpa deal topped the rankings in the first half of this year it is no surprise to learn that Western Europe attracted the most investment by region over the six months. The region led the way with USD 4,779 million, significantly higher than the USD 2,779 million invested in secondplaced Far East and Central Asia, which was closely followed by North America with USD 2,760 million.

The same three regions also topped the volume rankings, with 223, 164 and 132, respectively.

In conclusion, 2015 has not exactly sprung out of the blocks in terms of investment in the media sector, but it is possible that the industry is just settling around its normal level after a few periods of exceptionally high value investment. With further monitoring it will become clearer how things are going to shape up in future.

Deal type

Number of deals

Aggregate deal value (mil USD)

Acquisition

6,297

212,018

Minority stake Institutional buy-out Capital increase Management buy-out

4,164 319 1,113 183

80,891 71,255 31,947 2,104

H1 2015

631

12,188

H2 2014

739

13,454

H1 2014

733

23,089

H2 2013

780

20,278

Management buy-in

16

23

H1 2013

673

16,845

MBI / MBO

5

12

H2 2012

606

16,829

Demerger

24

3

H1 2012

576

14,372

Merger

80

0

H2 2011

495

12,840

H1 2011

497

10,445

H2 2010

472

7,456

H1 2010

505

6,471

H2 2009

577

21,995

H1 2009

639

11,861

H2 2008

560

11,797

H1 2008

618

12,310

H2 2007

652

37,920

H1 2007

832

58,641

H2 2006

785

44,726

H1 2006

809

39,845

14 Acquisition International - July 2015

Aggregate Value (mil USD) of Media Deals by Region: 2006 - 2015 YTD (as at 30 June 2015) World region (target) Western Europe

2010

2011

2012

2013

2014

2015

4,964

8,499

8,451

21,920

10,090

4,779

Far East and Central Asia North America South and Central America Oceania

1,449 6,152 494 508

2,250 8,499 1,011 1,699

1,648 19,362 85 1,465

5,314 7,356 649 907

11,003 10,759 1,578 1,079

2,779 2,760 1,202 634

Middle East Eastern Europe Africa

15 338 7

89 1,197 0

0 128 1

2 628 348

65 1,633 64

78 31 0

Copperstone Capital

Copperstone Capital Copperstone Capital is an investment management firm founded in 2010 in Moscow by David Amaryan.

The firm was founded by David Amaryan and Vardan Amaryan and for several years the company has been managing private and pooled foreign accounts of its clients and in 2012 has successfully launched its flagship Copperstone Alpha Fund. Since its launch, the Fund has had a solid performance track record and established an impeccable reputation of highest integrity, trustworthiness and transparency.

As a recognition of this Copperstone Alpha Fund received “The Best Russian Hedge Fund Award (since inception)” in 2015.

Despite the extremely turbulent conditions last year Russian financial market is constantly evolving and we hope that in the nearest future it will start to occupy an increasingly prominent place in the portfolios of most global and international investors.

David Amaryan, Managing Partner & Chief Investment Officer is responsible for the investments management process of the Fund and day to day operations of the Investment Manager. He has over 15 years of investment experience.

Additionally, Russian capital markets still face a number of artificial obstacles – largely the consequence of government interventions.

Copperstone Capital manages wealth for high net worth individuals and institutions and provides advisory services. Copperstone brings together a unique combination of international asset management expertise, highly professional team with proven investment capabilities and extensive knowledge of Russian business environment.

•

However, in order to successfully operate in the Russian market, its peculiar features and weaknesses should always be taken into consideration, while making most of the business and investment decisions.

Other well-known factors include:

• • • •

Excessive policy volatility and instability of the legal regime Swollen bureaucracy and inefficient legal framework Barriers to foreign entry In many fields counter-productive tax laws, including excessive taxation of foreign residents Weak tax incentives for individuals to save for retirement

We assist our clients in following areas: • • •

Investment management Personal Net-Worth Management Advisory Services

Here is how David Amaryan comments on Copperstone Capital achievements: In our investment activities we generally seek a broader mandate with little restriction to a particular region or asset class. And though our main focus is equity investments in Russia and the CIS, it allows us to be much more flexible, looking for value in various markets around the world. This advantage becomes critical during prolonged periods of distressed economic conditions, similar to what we’ve managed to observe last year in our country. In this particular case, it allowed us not only to timely switch our investment focus to Global markets and avoid major losses, but also to considerably outperform our Russian peers. This helps the Fund to become one of the best performing funds in Russia in 2014.

The fund’s performance is a result of thorough analysis with careful and consistent risk controls.

We strive to provide the best possible risk-adjusted return by exploiting our proprietary asset valuation models in line with a pro-active portfolio management approach. As we are not part of any large financial group, we are much better suited to make precise and objective investment decisions.

We have big plans for the nearest future. As we are constantly seeing more and more international investors ready to share our investment philosophy and excited to get better acquainted with our business approach, we are currently actively working on opening our offices in London and New York. That will also be a major step to becoming a truly global hedge fund.

We are planning to launch a fixed income fund and a distressed Russian debt fund specially tailored for investors with low –to-moderate risk appetites.

Company: Copperstone Capital Name: David Amaryan Email: info@copperstonecapital.com Web Address: www.copperstonecapital.com Address: Russia, Moscow, 115035, Sadovnicheskaya St., h.16, bld.

Telephone: +7 (495) 988 00 10

Hedge funds have been formally authorised for qualified investors in Russia since 2008.

However, Russian legislation has very slow developments in this field and therefore most of the Russian hedge funds tend to operate as a more active alternative to mutual funds. That is the main reason why the financial performance of majority of Russian hedge funds tends to strongly correlate with the market developments.

The ability to de-correlate the fund performance from the broad market recessions, while continuing to find investment opportunities in most of the economic sectors and always stay 100% transparent for all partners and investors we consider as our biggest challenge and, at the end, an advantage from the very first day of the company.

Acquisition International - July 2015 15

Acquisition International's 2015 Q2 Review

Q2 Review

KPMG We hear from Mafipe M. Chunga, Senior Manager, Deal Advisory services at KPMG Zambia.

Mafipe M. Chunga, Senior Manager, Deal Advisory at KPMG Zambia

Globally, KPMG is more than a century old, however, the local practice has been in operation since 1954. Today KPMG Zambia is an award winning professional services firm that employs 87 staff who work from hubs in the capital city of Lusaka and the Copperbelt town of Kitwe.

Zambia has carved out a reputation for seamless political transition with five Presidential elections in the space of 14 years without incident. Of greater concern are the current power deficit and the copper price on the London Metal Exchange.

A strategic decision in 2011 to invest in expanding the Tax and Advisory capabilities of the firm has allowed us to build up a significant body of work in the M&A space.

Unknown to most, Zambia is one of the world’s greenest energy producers with 99% of electricity generated through hydro power stations. The downside of this is a vulnerability to low water levels that can limit generation capacity, a situation that we are experiencing now. In recent years the challenge has been excess water with flood gates at the key Kariba dam being opened in 2010, 2011 and 2013.

I’ve always had an interest in investment and doing business in Zambia so I studied for degrees in Law and Accounting. I’m also a Member of both the Association of Chartered Certified Accountants (ACCA) of the UK and of the Zambia Institute of Chartered Accountants (ZICA). I started out in Corporate Banking in the UK before moving back home to work for KPMG Zambia.

I’ve been at KPMG for close to 8 years now and I’m currently engaged in two main lines of work. In the first, I conduct feasibility studies for both local and international investors looking to better understand specific sectors or the possible demand for their products and services in Zambia.

In the second, I help buyers and sellers of companies make informed decisions by examining specific companies that they are looking to either invest in or exit. I help them acquire realistic valuations and consider the strengths and weaknesses of their targeted business in this economy.

The concept of an M&A advisor remains novel in Zambia and I’m often asked if it’s entirely necessary and my response that that question is yes. In my experience the costliest mistakes that investors make is to assume that because a particular business model worked in another African country it will work here.

A good example of this is M-Pesa, the hugely successful mobile payment solution used in Kenya. I recently spoke to the CFO of a local telecom provider who explained that on the insistence of their group office, they launched a similar product several years ago and after US$5m spent on promotion, it has less than 2% market penetration. He conceded that with hindsight they overlooked a number of factors that differed between the two markets and the outcome is regrettable. The lesson here is that there is value in understanding the local environment.

The Zambian economy has experienced serious uncertainty in Q2 2015 but not for the same reasons as the rest of the world. Although depressed commodity markets have been an issue, regulatory and political factors have arguably had a greater influence. We had a Presidential election in Q1 2015 and another is scheduled for Q3 2016 so some key international investors have been waiting for this to pass before committing themselves to major projects.

In contrast to this local investors are not particularly worried by the political environment.

Right now the state owned power utility ZESCO is rationing power at a level that has not been seen since 2008. The impact on mining and other industrial activity is not fully understood at this stage, however the problem is expected to persist at least until October 2015 when the first rains are anticipated.

The commodity prices and the power output are key issues to watch out for in 2015 because they could have serious repercussions for the economy.

I have been working on two deals in this last quarter.

The first of those is feasibility for a property developer and the second a buy side mandate for an FMCG producer. Both are progressing well and should be concluded in the next two to three months.

Over the last three years, agriculture has been the dominant deal sector however it is now being eclipsed

by FMCG. When compared to last year, I see more buyers who are looking to takeover small but viable FMCG businesses with good distribution channels that they can invest in and expand. The majority of investors are MNC’s working out of a South African hub.

There had been a cloud hanging over the investment climate as the mining houses negotiated the provisions and rates of mineral royalty taxes with the government. That was concluded in April and from there onwards the outlook has been positive.

The EIU are currently forecasting 5.2% GDP growth which is reasonable but significantly down from 6.5% a year ago. I expect growth to remain unchanged in 2016 due to the uncertainty surrounding the forthcoming general election, however a number of investors are using that as an opportunity to purchase undervalued assets because liquidity in the market is tight.

In my opinion, despite a challenging year and the uncertainty of an forthcoming election, Zambia remains a top investment destination because you have a range of mineral resources, a growing middle class, a large proportion of imported goods that can be locally manufactured and 54% of the population is under the age of 18 which means demand for all products and services will rise. In short, Zambia remains open for business.

Acquisition International - July 2015 17

www.acquisition-intl.com

Santamarina y Steta Mexico: challenges and opportunities in the global picture

Juan Carlos Machorro, Partner of Santamarina y Steta

Cecilia Sarabia, Associate of Santamarina y Steta

During the course of the last five years, Mexico has been a country subject to various effects brought up from different detonators such as economic ups and downs, development, technological advance, and regulatory changes, among others. The last decade has brought a series of worldwide events in all of the areas that have an impact in a country’s growth and development. The world has suffered economic crisis and political changes, but both industrial and technological development have taken a steady pace, in some countries at a greater speed and with better results, but overall, progress has been achieved. Global economic activity remained weak during the first months of 2015, while inflation had a global downward trend, among other factors, as a result of low oil prices. Additionally, the widespread appreciation of the US dollar, the price behavior of basic commodities, and the economic situation in Greece and other European countries led international financial markets to continue to exhibit high volatility during the first quarter of 2015.

All nations have encountered a number of difficulties during the past couple of years, global oil prices, for example, have fallen abruptly over the past year, causing the worldwide stability that was achieved in oil prices to come to an end. On this matter, many claim that the reasons thereof are twofold. On the one hand the decrease in demand in importing countries due to economic insolvency and on the other, the rise of the US as a top oil producer. Other examples of the complications that Mexico, in particular, has faced include the fall of the Mexican peso before the US dollar, as the Mexican peso has fallen 18% against the US dollar in the past year.

Notwithstanding the foregoing, Mexico is a country that is globally known for its rich resources and prolific territory, which, together with the ongoing reform processes that have been undertaken by the Federal Government and the incoming foreign investment, make the country a gateway to the most relevant markets in the world. Mexico is one of the most competitive countries in the world for investment, as it is an open economy through which investors can access international markets by means of a network of free trade agreements of which Mexico is a signatory and which grant Mexico preferential access to 45 countries and approximately 1,143 billion people.

Furthermore, despite the unfavorable conditions that have evolved in the past year, Mexico continues to be among the thirteen most attractive countries in the world to invest in, as, according to A.T. Kearney’s FDI Confidence 2014, Mexico ranks 12th among the world’s 25 most attractive countries for investors, and has undertaken measures to mitigate the effects of

18 Acquisition International - July 2015

such circumstances. For instance, even though the national currency in Mexico recorded a depreciation in response to external factors, and in addition, the prospect of normalization of the monetary policy in the United States and the uncertainty associated with such process reflected in international financial markets, leading to high volatility and generalized depreciation of most currencies against the US dollar, the annual general inflation reflected a significant reduction in early 2015, for which the low prices of telecommunication services and certain energy products, due to the recently enacted reforms in the Mexican telecommunications and energy legal frameworks, were contributing factors. Additionally, the monetary policy implemented by the Bank of Mexico as a response thereof is focused on ensuring the stability of the purchasing power of the Mexican peso and is intended to reach an environment of low and stable inflation in Mexico.

There are many factors that will contribute to Mexico’s accelerated development including, among others, the compromise of developing modern infrastructure that it has undertaken, pursuant to the National Infrastructure Program for Transport and Communications 2014-2018. This foresees that the Federal Government will make an approximate investment of 100 billion dollars, as well as the human capital that Mexico can offer, as according to statistics published by the National Institute of Statistics and Geography (INEGI), the Mexican population in 2013 reached 118.9 billion, and, at the third quarter of 2014, 52.4 million represented the economically active population.

Mexico is a leading power in many global industries, including automotive (in 2013, Mexico was the eight biggest vehicle producer in the world, and the leading auto parts and trucks supplier to the US), electric (Mexico is the second top electric producer in Latin America; the so-called Energy Reform that was recently enacted has opened the whole energy sector for private investment. On the one hand, in electricity matters, a wholesale electricity market will be created and the private sector will be allowed to participate in related activities such as energy generation and commercialization. An estimated investment of 23,790 million dollars is expected to come from new generation power plants, an investment of 3,300 million dollars is expected to come from private independent producers, and a total estimated investment of 4,450 million dollars is expected for the modernization and expansion of the electric grid. On the other hand, in oil and gas matters, the Federal Government has issued the first three calls to bid for Round One, for which an overall investment of approximately 25,000 million dollars is expected over the next three years),

Q2 Review

renewable energies (almost a quarter of Mexico’s installed capacity for power generation comes from renewable resources; in 2013, installed capacity was at 14,875MW), aerospace (between 2004 and 2014, the industry had an average growth of 9%, while all manufacturing activities grew 3%; the aerospace exports grew 16.1%, annually generating surplus balances), electronic (the cost of electronics assembly in Mexico is 11.9% lower than in the US), and mining (Mexico is the second biggest gold producer in Latin America and eight in the world, as well as the world’s leading silver producer and exporter), among other sectors in which Mexico is a global leading country.

Overall, in spite of the actual economic and commercial challenges that Mexico and other countries are facing, the fact that Mexico remains a country that has countless opportunities to offer to foreign investors and preserves its potential as a territory in which all types of projects can be planned and taken to successful close. Moving Mexico and its investors forward, is undeniable. Furthermore, Mexico’s prospects and probabilities of becoming a leading participant in international commerce are only growing and becoming more tangible as time goes by and as the conditions required for Mexico to transform become more favorable.

Acquisition International - July 2015 19

www.acquisition-intl.com

SCP Mame Adama Gueye & Associés SCP Mame Adama Gueye & Associés is a business law firm of reference in Senegal which has a very good reputation and high credibility in the market.

Mame Adama GUEYE, Manager Lawyer

We provide, among others, Support and legal advice, Legal Consultancy, Set up of companies, Legal assistance to investors, Representation before courts, Legislative drafting, Legal audit and Due diligence.

international law firms. Thus, our firm is proud to be the correspondent in Senegal of Baker & McKenzie, Hogan Lovells, Linklaters, White & Case, Clifford Chance, Freshfields, Denton Sapte, Norton Rose.

We work in several fields of general law and business law namely in the commercial law, Mining law, Contracts law, Competition law, Banking law, Project finance, Insurance law, Corporate law, Taxation law, Intellectual Property and Copyright law, Labour law, Investment, Civil Aviation and Property law.

To meet investor’s needs, for legal services, we offer state of the art legal expertise in project setting up enhanced by a perfect command of the investment legal framework at national level and the legal purview set up within the framework of OHADA ( a sub-regional organisation in charge of streamlining business law). (OHADA).

Due to the growing complexity and quality of services required by the clients, our firm has adopted a multidisciplinary approach and has developed a real ability to work in a network of partners, experts in other disciplines. In addition, thanks to the quality of its services, the law firm was rated A by European Export Insurance Agencies and is recommended by the Embassies of USA, France, Spain and Germany in Dakar.

Our law firm is member of LEXAFRICA network (www.lexafrica.com) which is the most important business law firms network in Africa with members from more than 30 countries. We are also member of WORLD SERVICES GROUP (www. worldservicesgroup.com) which is the most important multidisciplinary network in the world with members from more than 115 countries.

Due to our excellent reputation internationally, our firm has gained the trust of the most famous

Taking into account the growing complexity of the demand for counselling services to companies, the firm has developed a policy of openness to other disciplines, thus expressing our ability to collaborate within a network of partners.

Our firm has been ranked, continuously, since 2003 by Chambers Global, publication of reference published in London in the top 3 of the best business law firms of Senegal based on survey conducted within the business community. In the 2015 edition, our firm is the best ranked business law firm of Senegal. Moreover SCP Mame Adama Gueye & Associés is one of the few law firms in Senegal which is bilingual and able to meet the demands of its clients in both French and English.

In fact, out firm is the counsel in Senegal of multinational corporations based in North America, South America, Europe, Asia and Australia with whom we work daily in English.

The Victoria Falls, Zambia

20 Acquisition International - July 2015

Q2 Review

Camden Associates focuses on international transactions with a particular emphasis on biotech and medtech.

Company: Camden Associates Name: Jean-Claude Gonneau, Managing Director of Camden Associates.

Email: jcg@camdenassociates.co.uk Web: www.camdenassociates.co.uk Address: 27 Hill street London W1J 5LP Telephone: +44 (0) 20 7290 9812

Mr Gonneau stated that the nature of business this Q2 2015 is particular: frenzy on the part of a number of players together with a sharp curtailment of the amounts raised. 2013 and 2014 were easily the most active coming off the financial crisis, though, as usual, European investors have had to battle stronger and more ongoing headwinds than their U.S. counterparts. In 2015 we see deals continuing to happen but we feel there definitely is some waning momentum, at least in terms of deal flow. We are likely to witness a softer deal count as a side effect from historically high valuations.

Meanwhile Euronext is enjoying a banner year for biotech’s, valuations now coming close to the levels observed on Nasdaq. French companies particularly are doing well with some spectacular transactions like that of INNATE PHARMA with BMS worth 400+ $ million, fairly similar in value to that of Camden’s client Inovio with Roche earlier last year. But if these large deals account for good numbers in terms of raised capital, things become more difficult for smaller players.

A new trend we identified last year is that US companies are definitely rediscovering Europe as a source of financing.

All in all, the unfolding of this cycle brings us back to a more normal situation.

Mauro is the founding partner of MVA who frequently advises a number of government departments and international companies in Angola, also being cited in several Handbooks and Global Counsel as one of the top Business lawyers in Angola.

Company: MVA (In Association with MCA) Name: Mauro Mota Veiga Email:mmv@legalmca.com Web: www.legalmca.com Address: Rainha Ginga, 187 Edificio Rainha Ginga LUANDA Telephone: + 244 222 397 596

Mauro Mota Veiga, founding partner of Mota Veiga e Associados (in association with the Portuguese firm Marques da Cruz e Associados).

Professional qualifications • Law degree, School of Law of the University of Coimbra.

• Admitted in Portuguese Bar Association in 2007 • Admitted in Angolan Bar Association in 2012.

Areas of practice: Corporate, Real Estate and Legal system of Angola.

The expansion of Angola’s non-oil industries, together with tax and export competitiveness reforms will help reduce the country’s vulnerability to its oil-sector performance MVA rendered complete legal and tax support and assisted in the incorporation of new companies or new offices in Angola. Alongside this, major investments have been made in infrastructure, construction, agriculture and hotels.

Several international banks and financial institutions have also set up new branches, providing the country with a more developed banking system, which is fundamental to support the countless necessities of financing of local and international investors.

Angola has been, over the last fifteen years, one of the countries in Africa where foreign companies and individuals have invested more. New measures are

expected to be taken by Angolan local authorities, in order to promote new investments. In fact, a new investment law will be approved in the country.

The most active sectors in Angola are the oil, construction and banking sectors. The Angolan Government passed a new Law regulating the financial institutions. This new Law enables the financial regulation and supervisory system with instruments technically more advanced, which will ensure the stability of the financial system, while at the same time complying with the international standards.

The new labour law also foresees the creation and stabilization of employment seeking thereby foster growth and economic and social development of Angola.

Angola published diplomas reforming country’s tax system with key changes made to the corporate, tax, personal income tax, stamp duties and administrative laws.

In a general way, Angola is becoming one of the most attractive countries for international investors, not only in the oil and gas sector but also in other sectors like agriculture, construction, etc. The Angolan government has several benefits, like tax benefits for the international companies who wish to do business with Angola.

It is unlikely for the oil sector to further accelerate gross domestic product growth. Non-oil GDP may increase because of the oil crisis and allow the diversification of the economy.

Acquisition International - July 2015 21

Ones to Watch In our Ones to Watch section, we shine a light on the companies to keep an eye on this month.

Ones to Watch

Studio Legale Ichino Brugnatelli e Associati As experts in the practices they focus on respectively, our 40 attorneys have received nationwide recognition for their accomplishments. Our representations, legal assistance, and counselling, covering the following areas:

Company: Studio Legale Ichino Brugnatelli e Associati Name: Carlo Fossati Email: carlo.fossati@ichinobrugnatelli.it Web: www.ichinobrugnatelli.it Telephone: : +390248193249 Via Mascheroni 31 20145 Milano - Italy Telephone: +390248193249

Employment & labour law and litigation; corporate employment counselling; business law, including banking, commercial litigation, and bankruptcy law; civil litigation and family law.

Over the last 120 years our firm has evolved from being the chamber of a locally renowned lawyer to become one of the most highly praised law firms by domestic and international Clients.

This progress was made possible by the extraordinary attorneys who preceded the current Partners and Associates. They epitomized our core values of integrity, service and excellence, and contributed to the development of business and law practices in our Country. We still follow their example in our present activities.

The attorneys in my department, engaging with employment & labour law and litigation, have practiced litigation broadly for many years, even before the National Highest Courts and the European Court of Justice. Thanks to our deep experience in all main industry sectors, we provide sound practical and legal advice on a full spectrum of issues, bargaining practices, unions and social security matters (also including different types of pension funds), as well as legal services for all employment-related disputes.

In particular, our representations include cases and actions in Courts regarding either individual or collective contract termination, wrongful termination, claims for higher positions, claims for damages for harassment, demotion, or unsuitable work, and social security issues.

Out-of-court representation and assistance, as well as alternative dispute resolution, include: • Tendering advice, even just by telephone or e-mail, drafting and checking documents and acts regarding labour relations, contract administration, grievance settlements, workers’ compensation claims, and staff management; interpretation of law regulations and contract clauses; providing strategic consultation in the face of workplace changes, office moving, suitable work offers/claims, promotions, bonuses, benefits, etc • Advising employers with respect to every financial and labour aspects of supplementary pension funds, as well as providing cooperation with their management • Assisting in drawing up and executing employment-related agreements, either individual or collective (e.g., employment contracts, service agreements, temporary employment agreements, Company agreements, independent contractor agreements, etc.)

• Providing consultation and assistance for developing and writing out workplace regulations or for adopting and revising personnel policies and procedures • Counselling on ways to prevent litigation, as well as evaluating risks of arising difficulties or potential disputes.

We serve corporate counsel across a wide range of industry sectors. Our Clients rely on the expertise and skills of our people to solve any legal problem and to obtain adequate guidance in decision making. From every attorney, they can expect sound experience, outstanding legal reputation, and tailored response to their needs at a moment’s notice.

In our country, after a long contraction, growth is expected to turn positive in 2015 but remains well below the EU average and the public debt-to-GDP ratio is set to increase further. Unemployment remains historically high and domestic demand is weak. Structural reforms, implemented and foreseen should reduce public debt-to-GDP ratio and improve competitiveness through their positive impact on productivity and GDP. Strong commitment to these reforms is crucial, also in the light of Italy’s past record marked by important implementation gaps.

A significant shift of the tax burden away from labour has been undertaken. The ongoing reform of the labour market, to which our Partner Pietro Ichino has contributed broadly in his activity of law-maker at the Senate, has a potential to address long-standing rigidities and improve the allocation of labour resources. A significant shift of the tax burden away from labour has been undertaken, and the ongoing reform of the labour market has a potential to address long-standing rigidities and improve the allocation of labour resources.

Acquisition International - July 2015 23

www.acquisition-intl.com

Company: Portilla, Ruy-Díaz & Aguilar Email: sacdf@portilla.com.mx Address: Córdoba 42, Interior 209 Colonia Roma Norte Código Postal 06700, México, D.F. Phone: +52 (55) 559 66047

Portilla, Ruy-Díaz & Aguilar Portilla, Ruy-Díaz & Aguilar is a firm of lawyers, experienced and specialized in several areas of the Law. They provide comprehensive services in the corporate, real estate, contracts, foreign investment, mergers and acquisitions, commercial and civil litigation, consumer protection, arbitration, riskpreventive consulting, criminal, labor (both individual and collective), tax litigation and consulting, foreign trade, immigration, transportation, bankruptcy and relief proceedings areas.

One of their primary values is to build a close and lasting relationship with each of their clients. This enables them to provide comprehensive legal services, with perseverance and commitment to teamwork. Enabling them to accomplish the best and most effective, fairly priced and competitive results in accordance with our clients’ needs, commensurate to the benefit received.

Portilla, Ruy-Diaz y Aguilar, S.C. is a law firm with enormous experience including aspects such as, serving clients, based on superior ethics, quality and professionalism. Some of our clients are largest and best-known companies in the world, as international law firms, both national and multinational, as well as financial institutions, and of course, smaller firms and individuals. Their lawyers are highly trained professionals, with broad knowledge and experience in diverse legal and business specialties.

In accordance with our clients’ needs, we have taken it upon ourselves to offer results at a fair and competitive cost, and in good time.

24 Acquisition International - July 2015

The firm has several partners and associates, and a supporting staff which includes paralegals, translators, technical specialists and administrative staff, with offices in Mexico City, Queretaro and Los Cabos.

The specialization and development of each practice area of the firm, the support provided among different areas, and the deep knowledge which we have of Mexico, its legal system, markets and industry, enables the firm to offer clients innovative, timely, and complete solutions to their needs in a very good and competitive prices.

The firm and its lawyers actively participate in various public and private organizations at an international level, which keeps us attuned to what is happening in the community and the world at large. It enables them to not only understand better and be closer to client needs, but also to participate in and have an influence upon the changes affecting them.

Philosophy Portilla, Ruy-Díaz y Aguilar, S.C. is committed to personally, enthusiastically and effectively rendering its comprehensive legal services with the highest quality, not only to resolve our clients’ problems, but also with the decisive conviction of preventing such problems.

They are aware of the importance of maintaining effective, responsible and frequent communication with our clients, to keep them abreast of the way their affairs are being handled, and of issues of significance to their industries.

Cyber Security and its Impact on M&A There is growing concern among professionals about the lack of cyber security carried out as part of M&A deals. Understanding, anticipating and managing cyber security risks is crucial for all company directors looking to acquire another business.

www.acquisition-intl.com

id est avocats is a Swiss based corporate and technology boutique law firm with specialized attorneys in advanced technologies, privacy, corporate finance, M&A as well as intellectual property and unfair practices.

Company: id est avocats sĂ rl, Rue Centrale 6, 1003 Lausanne, Switzerland Name: Michel Jaccard, Juliette Ancelle Email: Juliette.Ancelle@idest.pro and Michel.Jaccard@idest.pro Web Address: www.idest.pro Telephone: +41 (0)21 321 08 80

26 Acquisition International - July 2015

The experience of members of the firm in cybersecurity issues dates back to 2008. While some industry sectors have become recurring targets of cyber-attacks for years (in particular financial institutions in Switzerland), many corporations have only recently started to adopt legal and technical measures to prevent and fight the risk of cyberattacks. However, such considerations are still nonexistent in many M&A transactions, a world in where standard practices are only slowly starting to include cyber risks in the process of corporate deals.

Based on our experience, we would at least advocate an evolution in two stages of the process.

Secondly, the impact of a cyber-security breach should be discussed in the negotiation process.

Although we currently witness a trend to include this risk in the warranties/indemnification mechanism or on the valuation of the target, there is no unique answer to the question of how to best integrate that risk in the contractual discussions. Indeed, the difficulty to assess potential damages resulting from a cyber-security breach is often opposed to the strict data protection regulation which frequently prevents a target company to share information on a breach and thus discuss the implementation of corrective measures.

First, the cyber-security risk should be assessed as part of the target’s technical and legal due diligence review. The fact that a company has already been the victim of a cyber-attack is more than likely to impact the price, yet we often fail to see specific due diligence inquiries regarding the cyber-security risk and history of the target. Such inquiries could also be part of the legal due diligence, as the acquirer should ensure that the proper legal means and mechanisms are in place towards providers, customers or staff to prevent or limit the risk of cyber-attacks. In our practice, we have incorporated such cyber-security chapter in our standard process and documentation.

The potential alternatives are always to be discussed on a case by case basis with the client but considering the recent increase of cyber-security risks and the trend of a reinforcement of data protection regulation, we anticipate that the part of cyber-security issues in M&A transactions will continue to grow in the upcoming years.

Cyber Security and its Impact in M&A

Ten Questions You Should Ask Your Cloud Provider The use of cloud computing is on an exponential rise. It offers users almost unlimited storage of data, reduces the need for organisations to have physical servers and allows easy access to information from anywhere in the world. As such, many UK based organisations are now turning to cloud computing to satisfy their data storage needs.

Company: Stone King LLP Email: brianmiller@stoneking.co.uk Web: www.stoneking.co.uk Address: Boundary House, 91 Charterhouse Street, London EC1M 6HR Telephone 020 7324 1523

But there is one issue which seeks to bring grey clouds over an otherwise silver lining and that is data security. By using the cloud instead of a physical storage device, organisations are obliged to hand over data to a third party cloud provider, some or all of which might be personal data within the meaning of the Data Protection Act. An organisation must therefore be sure, before it enters into a contract with a cloud provider, that its information will be kept securely and the provider’s handling of data will be compliant with the Act and any other applicable laws.

Before you embark upon acquiring a business which uses cloud computing, or are thinking of purchasing software which is cloud based, there are ten questions that your organisation should ask the provider: 1. Where will the servers be based on which our data would be stored?

2. Is there any possibility of it being transferred outside the EU (assuming the servers are EU-based)?

3. Do you use any subcontractors for the storing of our data and if so, who are they and where are they based; if any are based in the US, are they a member of the US Safe Harbor Scheme?

4. Are you ISO 27001 and/or 9001 and/or 27017/8 certified and/or certified by any other data security organisation? Please supply a copy of any relevant certificates.

5. What other information can you send me to allay any concerns about the security of your systems?

6. Have you ever had a security breach and was any client data lost or accessed?

7. What other organisations do you supply your hosted system to? Can we see a list and can you supply up to three names of any that we can contact for a reference?

8. Would your organisation be prepared to enter into a data processing agreement?

9. Can you please send me your terms of business and any other terms which we would have to sign up to in order to receive the hosted service?

10. What is the position and process regarding the return of our organisation’s data, in the event that the agreement was terminated, came to an end or your organisation ceased to trade?

Brian Miller is a solicitor and partner and Lauren Mitchum a trainee solicitor at Stone King LLP, providing specialist advice in the fields of intellectual property, IT, data protection and commercial law.

Acquisition International - July 2015 27

COUNTED

4

COMMERCIAL

We are delighted to work with Counted4 who have provided a level of professionalism and range of specialisms which we would have never been able to develop on our own. When we first implemented the programme in 2011 the failure rate was 11.8%, with a regular targeted programme this has dropped to a failure rate of 3.7%, and down to 0.8% in 2014. We would endorse Counted4 whole-heartedly – their regulatory body and governance ensures that their protocols and ethics are unquestionable and their staff are friendly, professional and responsive – providing appropriate, concise and fail safe reports and guidance.

Waste Recycling Company – North East – January 2015

Facebook “f ” Logo

CMYK / .eps

Facebook “f ” Logo

CMYK / .eps

Nigeria: Remaining a Key FDI Destination Traditionally, when many people considered doing business in Nigeria, thoughts would inevitably turn to two major factors shaping the country’s economy and business environment: oil and corruption. Following recent elections, however, things are changing...

Acquisition International - July 2015 29

www.acquisition-intl.com

Osahon Idemudia, Libra Law Office, Partner since 1993.

Libra Law Office was established in 1978 by Mrs Hairat Aderinsola Balogun, principal partner, who qualified as a Barrister in England in 1963. Libra Law Office can be described as a medium-sized firm in the heart of Lagos with 3 partners and 9 associates.

Osahon Idemudia joined the firm in 1989 and became a partner in 1993.

Company: Libra Law Office Name: Osahon Idemudia Email: oidemudia@libralawoffice.com Web: www.libralawoffice.com Address: 15B Idejo Street, Victoria Island, Lagos Telephone: +2341 628 1981

The firm has evolved over the past 37 years alongside the City of Lagos itself. The firm offers boutique legal services to a niche clientele based in Nigeria and other parts of the world. As one of the oldest law practices in Nigeria, our legal practitioners work with a deep sense of dedication and offer an unwavering personal service. Our experience is demonstrated in our results, and we diligently seek the best possible outcome for our clients. Our lasting success has been due to our dedication to excellence along with recognition of the increasing complexities in legal practice to which we successfully adapt.

The Nigerian market, for the most part, is a growing market with new and uncharted territories with an avenue for investors to become pioneers in their field of choice. The factors that make Nigeria a Foreign Direct Investment destination include: Nigeria’s emerging middle class, its large population and its infrastructural deficit. The FDI will come in terms of service for the middle class, and there is a large population to utilise new infrastructure.

Nigeria is the most populated country in Africa and the largest economy in the continent. A symbiotic relationship is formed on these three factors and development will be driven like it was in South East Asia, Eastern Europe, India and Brazil.

A look at the history of Nigeria reveals a high level of political instability between 1966 and 1999. However, 1999 saw the dawn of a new era with democratic elections credited with being free and fair. Over the course of 16 years the country saw 4 similar elections culminating in the election of current President Muhammadu Buhari, which can be credited as the freest of them all. As such, Nigeria can be said to have surmounted political instability.

Potential investors should understand that although there is widespread corruption, there are laws, anticorruption agencies and other mechanisms currently in place. The establishment of the Economic and Financial Crimes Commission is one of such. Additionally, investors can set up anti-bribery compliance programs that involve local staff and Nigerian partners.

Nigeria continues to integrate with international financial systems globally and the need for transparency will follow as a matter of course because the international community will demand it.

Libra Law Office is a firm of legal practitioners with over a century of combined legal experience in sectors including: Banking, Labour and Employment, Commercial, Corporate, Immigration, Family and Probate, Securities, Tenancy, Trusts and Estates, and Torts. Our legal practitioners will take business leaders and investors through the legal maze of regulatory and statutory protocols to enable them comply and recoup their investment. We will also engage in due diligence reports with regards to potentially viable projects.

• •

“For all its infrastructural shortfalls, Nigeria is also the top destination for foreign direct investment in Africa, with inflows no longer just concentrated in the oil and gas industry.” Financial Times, 2014.

Barriers include: Political instability, Corruption, Lack of Transparency, Inadequate Power Supply, Insufficient Infrastructure, Lack of a Sophisticated Legal System of Laws And Regulations, Restrictive Trade Policies, Inconsistent Monetary Guidelines, and Insecurity. Auspiciously, these barriers are mere obstacles that can be - and some have already been scaled.

30 Acquisition International - July 2015

•

Nigerian Oil and Gas Industry Content Development Act, 2010.

Fast track procedure for liquidated monetary claims, counter claims of over Hundred Million Naira.

Greater developments and structural awareness of Alternative Dispute Resolution.

Currently, companies owned by foreign investors flourish in many sectors, including telecommunications, accounting, insurance, and advertising. A look at the current shortfalls in Nigeria will show that FDIs will flourish in the Power, Mass transit, Housing, Hotel and Hospitality sectors. Critical structures can be put in place in conjunction with the government under various Public Private Privatisation schemes.

Nigeria: Remaining a Key FDI Destination

Company: KB & Co Solicitors

Ms O O Otuyemi - KB & Co Solicitors London (Principal Solicitor); Kellybella Associates Abuja.

KB & Co Solicitors works with Kellybella & Associates based in Abuja. Our firm is recognised for professional legal services of the highest calibre.

We draw on our extensive knowledge of African business environment and law to advise our clients. We have in-depth knowledge of setting up and acquiring new business interests in Nigeria.

We advise on corporate structure to maximise investments objectives and opportunities.

Our cross borders lawyers have in-depth knowledge in all areas of law and dedication to the law providing professional advice, taking into consideration business needs and different jurisdictions.

Nigeria as the largest economy in Africa offers investors a young highly skilled workforce, a growing middle class and increasing urbanization. All of these factors aid the growth of the economy, thereby offering investors a ready pool of consumers for their products.

There are so many economic sectors for investment, including agriculture, mining, tourism, real estate, health and services.

There are few barriers in regards to trade in Nigeria.

It is important for investors to have local partners to ensure knowledge, ease of doing business and success in trading transactions.

We are able to proffer advice on all areas of industrial activity. We can attend meetings on behalf of the investor, aid in the provision of approvals and point investors into the relevant areas of industry.

We can also aid investors in sourcing funds for projects in Nigeria.

There have been labour laws which aid in the protection of the workforce. These protections aid the investor by offering government aid to the worker thereby creating a healthier workforce.

Nigeria is open for business and welcomes investors to all sectors of the economy. There are no barriers to trade and the investor can trade in all areas of economic activity. The country has 36 states and the federal capital Abuja, of which every state offers immense opportunities to the investor. The country has a plethora of solid minerals which in the main have not been exploited. This area offers investors a most lucrative opportunity.

Acquisition International - July 2015 31

Simple.

There is an art to due diligence. Simply portray your asset in the best light with Merrill DataSite - the smart, simple, secure virtual data room for your deal.

datasite.com

The Desire to Acquire & The Urge to Merge In this section, we take a look at some of the most noteworthy M&A activity to have taken place over the past month and examine its impact on the wider business world.

www.acquisition-intl.com

Established in 1989, BCMS is a leading international sell-side M&A advisor, specialising in deal values in the range of £1m to 75m. We are active across all commercial sectors, and have completed in excess of 500 deals in the last decade alone. According to deal data registered with Bureau van Dijk’s Zephyr database, we are also the world’s leading deal-maker to privately owned businesses by deal volume.

As Executive Director, my role is to lead continuous improvement, influenced by the varied needs of our clients and the constantly changing M&A market. At BCMS we are very client focused, and keeping our advice relevant and appropriate is critical if we are to continue to deliver successful outcomes for our vendor clients.

Company: BCMS Name: Steve Anstey, Executive Director Email: steve.anstey@bcms.co.uk Web: www.bcmscorporate.com Telephone: 01635 296 193

We represent SME clients in every conceivable sector, including tech, food, pharma, telecoms, property, media and utilities. I actively encourage acquirers to lodge their target requirements with us, as we can be an exceptional source to help them with deal origination.

One of our greatest assets is our research team, located here in the UK and in the 20+ BCMS offices around the world. This on-the-ground capacity means that we can reach prospective acquirers that others simply can’t. In addition, each BCMS client benefits from a specialist eight-strong project team, working together to approach a qualified market of up to 220 buyers. We speak to between 35,000 and 50,000 acquirers every year and each conversation is captured in our proprietary database, which is literally irreplaceable.

Acquirer rationale Through our constant contact with the market of acquirers, we know acquisition can be a highly effective strategy for companies who have a clear

34 Acquisition International - July 2015

reason to acquire, and a thoroughly thought through execution plan. However, if an acquirer lacks strong rationale and a well-defined plan, then acquisitions can be higher risk.

One aspect of deal-making is sometimes overlooked: communication and the ability to articulate the benefits of any transaction to all stakeholders, including staff and clients, are key. It is vital that senior management stay engaged throughout the process, including post deal.

Although we work for the vendor in each case, we also ensure that acquirers understand the opportunity and its future potential in detail.

A seller’s market, experiencing growth I would class current conditions as a seller’s market, with all buyer types active. We are enjoying some record levels of activity in the UK, whilst also accelerating our expansion into new overseas territories, such as Hong Kong and the Gulf.

We will continue to sustain and build on our market leading position. The next 12 months will also see us extend our reach up the deal value range, with some higher enterprise value deals already at advanced stages. BCMS’ traditional strength is as a trade sale advisor, but increasingly we are negotiating other deal types for clients, including MBOs, MBIs, and Private Equity investment. I predict growth in these areas, too.

The Desire to Acquire & The Urge to Merge

Are You Doing Enough Due Diligence to Achieve a Successful Acquisition?

M&A ‘due diligence’ is all about knowing what you are about to get into… and finding no surprises when you get there.

David McClelland is a Director at Carlton Strategy Advisors Ltd. CSA can be contacted at: carlton-advisors.co.uk

Robust and comprehensive due diligence, as carried out by professional services firms and strategy consultants, is one of the main tools used by lending banks, equity investors and trade companies to assess their exposure to transaction risk. Particularly, in connection with business acquisitions, management buyouts, refinancing or other corporate finance undertakings.

An acquirer will probably have received a target company’s financial and commercial information, which has formed the basis of an offer. The due diligence exercise needs to ascertain whether the target-co’s information including historical trading results, management plans and the business forecast is accurate and reflects the target’s real underlying performance and potential.

Due diligence should never solely rely on explanation of detail provided by the company’s vendor and management, as there is clearly a conflict of interest. To obtain an unbiased view of the target’s level of maintainable revenues and earnings, detailed due diligence will be necessary to get underneath the reported results and projections in order to more roundly evidence and corroborate management explanations.

Importantly, due diligence seeks to understand and convey to the client, the logic and rational of the present-day management team (and equity backers) when it acts to take the target-co down a particular route to market. It provides the client with an independent, strategic assessment of the risks/benefits found in the target when that business’s trading is aligned to specific markets and opportunities. Taking into consideration all of the target-co’s financial/commercial KPIs in addition to what customer/supplier references may say about the company, plus the level of growth calculated

in the marketplace and threat from the activities of identified competitors… are business objectives reasonably stated and presented in the vendor’s information memoranda and business plan?

Due diligence delivers a pragmatic and balanced view of a target company’s overall strengths, weaknesses, and opportunities. It provides the client with the specific financial, commercial and market information that they will need to have at their disposal if they are to reach a position of comfort so that a deal with a target-co’s vendor can be struck.

It is the process by which advisors provide information on the key risks associated with a proposed acquisition and also recommend how those risks can be managed in a possible post-deal environment in line with client strategic objectives.

The solutions to manage the identified risks may involve a price negotiation, deferred consideration or other mitigating actions or protections. The diligence may assess the degree to which a management team is in control of the target-co’s destiny, whether the business model works and has the capacity to meet present or planned banking arrangements, and the likelihood of meeting the minimum requirements of a potential investor or buyer.

Acquirers should be prepared to withdraw from a potential acquisition or renegotiate terms if the main factors making the acquisition attractive are called into question following the due diligence exercise.

Today’s business environment increases the pressure on companies to perform, thereby increasing the risks associated with acquisitions… so the question is… are you carrying out enough due diligence to maximise the chances of a successful acquisition?

Acquisition International - July 2015 35

www.acquisition-intl.com

Setting Up a Franchise Business in Turkey Erdal Law is an independent full service Turkish law firm in Istanbul providing legal services to both its’ local and international clients.

Company: ERDAL Law Firm Name: Mrs. Feyza Gerger Erdal Email: feyza@erdallaw.com Web: www.erdallaw.com Telephone: +90212 217 50 34/35

Lawyers of Erdal Law Firm provide a diverse range of legal matters, including Mergers & Acquisitions, Corporate Law & Contracts, Banking & Finance, Mediation & Dispute Resolution, Bankruptcy & Restructuring, Real Estate Law, Sports Law, Energy Law, Employment and Labor Law and Family & Inheritance Law. Our absolute focus is on getting the best deal for our clients and through sheer determination we aim to find answers and solutions. Our philosophy is to guarantee that our client’s needs’, interests and their legal regal rights remain our uppermost priority by delivering our services to the highest professional standards from our initial contact through to the completion of the case. All of our lawyers have excellent writing and speaking skills of English language.

Keeping up with the recent developments in relevant areas of law, Erdal Law presents its advice based on commercial realism, tailoring it to each individual client. Our goal is to help clients meet their needs by providing high quality legal support on a cost effective basis.

Erdal Law was established in May 2014 by Mrs. Feyza Gerger Erdal. Due to the rapid enlargement of its client portfolio, the firm has grown in size expeditiously within the first year of its establishment and currently has 7 lawyers and 3 interns in Istanbul, Turkey. Through its strong and close relations with correspondent lawyers, academicians, independent experts and consultants in related fields, the firm is able to provide both private and corporate clients in Turkey and overseas with comprehensive legal services. Erdal Law also charges one of the first registered mediators in it’s’ team.

Mrs. Feyza Gerger Erdal has extensive experience in mergers & acquisitions, general corporate matters, real estate, energy, employment, foreign investments and group restructurings. She has led numerous large scale transactions in the jurisdiction. Mrs. Erdal has represented national and foreign clients engaged in various sectors during their transactions in Turkey including, but not limited to real estate, tourism, retail, energy, gas, telecommunication, tobacco, banking, insurance, healthcare, furniture and food & beverages sectors. Mrs. Erdal has handled all aspects of corporate transactions with great success.

Mrs. Erdal is the founding partner of Erdal Law

36 Acquisition International - July 2015

Firm. Previously, she was the partner of Corporate Department at Gur Law Firm.

Evaluating and understanding the Turkish legislation and bureaucratic hurdles may be the biggest challenges for a foreigner who would like to start up a business or franchise. Changing regulatory environment and bureaucratic hurdles are always of concerns of foreign investors investing in Turkey.

In that respect it is crucial to have comprehensive legal and financial/tax support and assistance arrangements in place. Competition is another challenge that the startups face in Turkey Having a business plan, choosing business structure, evaluating the licensing, legal issues, tax and national license and other financial requirement in relation to the concerned sector can be considered as key aspects of a start-up business. It is also significant to size up competition and render market research before initiating business in Turkey.

Making smart choices every step of the way and avoiding certain difficulties can make a big difference for the success of a franchise business. Evaluating business conditions, testing the idea in the region, understanding the market and the customer portfolio, choosing the right business structure, learning the legal and financial requirements can be listed as the most important steps that a franchise business can take to ensure success.

Turkey’s growing economy, favorable geographical position and its dynamism has always attracted foreign individuals and foreign companies to startup businesses in Turkey. Turkey is considered as a bridge between Europe and Asia, benefiting from its location which is a close proximity both to Europe and the Middle East. Furthermore, Turkey offers an accessible, skilled and cost effective workforce. In addition, the Turkish government provides various tax and non-tax incentives to foreign investors, in line with those provided to domestic companies. The Turkish legislation allows the foreign ownership without any restrictions, with no pre-entry screening requirements.

If startups can find a niche market, differentiate themselves from their competitors and understand the market, customer portfolio, legal and financial aspects of the business, they can stand out from their competitor.

Setting Up a Franchise Business in Turkey

We have represented one of the leading international consultancy firms and conducted due diligence, reporting and drafting of the share purchase agreements for the acquisition of local operations of an international consultancy firm.

We have completed the acquisition of a Turkish entity engaged in real estate carrying out its due diligence, checking the completion of condition precedents (the relevant permits and licenses) via controlling the administrative and regulative side of all the relevant permits and licenses. Acted on behalf of the buyers; a company incorporated in Dubai.

We have acted on behalf of numerous foreign investors in advising which legal structure to form, carrying out the establishment of the companies together with its local partner if such is the case, drafting, negotiating and finalizing the shareholders agreements and the Articles of Association and subsequent to the incorporation of the same carrying out all the other procedural formalities such as tax and social security registrations.

Our aim is to provide quality and efficient legal services to our clients with sound legal advice that takes into consideration all of their legal and business needs, desires and goals. The Firm aims to combine the excellence and depth of experience of a larger firm with cost competitive benefits of a small firm by maintaining the utmost professional and ethical principles.

Acquisition International - July 2015 37

www.acquisition-intl.com

Can Corporations and Professionals in Germany Cope with the Hacking Malaise?

JORDAN & WAGNER Rechtsanwaltsgesellschaft mbH Kernerstraße 28 · DE-70182 Stuttgart E-Mail: info@jordan-ra.de Telephone: + 49 (0) 711/25 54 04 60 Fax: + 49 ( 0) 711/25 54 04 70

Many corporations in Germany enjoy a good reputation supported by positive export statistics . The key to success is offering a product with high tech ingredients at a reasonable price. In order to achieve such far-reaching goals , copyright and patent protection come into play. Patent laws share the same values all over the world . State agencies seek to administer patent applications efficiently and keep an eye on the worldwide situation. By contrast , copyright laws are often inefficient , due to a lack of practical legal protection. The Copyright Office in Washington , D.C. and its corresponding US copyright laws deserve to be mentioned in this context as practical legal protection. The good news is that anyone worldwide is authorized to file for a US Copyright Certificate. This means when someone files a lawsuit on the grounds of copyright violation , there are far fewer problems with regard to burden of proof. Entering the Digital Age has brought an uninvited game changer to our doorstep. Before this new era started it was sufficient to ensure physical protection by securely locking things. Company doors are still locked securely but many of these same companies pay little attention to the possibility to digital break-ins any time day or night. Such digital attacks have been ignored far too long.The attackers were invisible and left no traces. Such attacks often cause no physical “pain” which means they can be as dangerous as an undiagnosed cancer. Such attacks can be particularly dangerous to those companies trying to protect their copyrights , patents and professional discretion , for example the Attorney/Client Privilege. It may not be obvious, but there is a definite relationship between copyrights, patents, and professional discret ion with regard to digital attacks. The scope of protection may differ, but putting these elements together helps us to protect them all in a more coordinated way.

1. Copyright protection Corporations are clearly interested in protecting their business secrets, their confidential correspondence, the confidentiality of negotiations , secure storage of data, subject to periods of storage (periods of custody). It is increasingly vital that they also consider the need for more effective protection of their copyrights, especially the unregistered copyrights.

In the Digital Age, data protected by Copyright Laws are also under attack. Cut and Paste - Plagiarism has never been easier or more widely practiced. New Copyright Act changes in Singapore tackle online piracy effective from 10 December 2014. The United Kingdom has enacted provisions in its Copyright Act 1988 that relate to website blocking orders.

2. Patent Protect ion Hackers know where R&D Departments are 38 Acquisition International - July 2015

located. While these departments prepare a patent application, the product can be put on the market before the R&D Department gets its patent approved.

3. Professional Confidentiality Many professionals have specific protections regarding their relationships to their clients and customers. For the purpose of this paper the focus will be on the 2 most important cases of professional discretion: MEDICAL Confidentiality: 2 case studies in Germany.

LEGAL Confidentiality: a historical review in Germany, EU and UK suggest continuing and strengthening legal professional discretion.

Can Corporations and the Professionals in Germany cope with the Hacking Malaise?

a) Medical Confidentiality Case Study 1 There is a general consensus that personal medical information needs to be protected. This can be traced all the way back to the ancient Greek world. It was Hippocrates who made a point in the year 370 B.C. “When providing medical attention to human beings, I will respect medical confidentiality”.

In the modern context however, the respect for medical confidentiality can vary from place to place.

Before Germany was reunited, medical confidentiality was treated differently in the East and the West.

Both East and West required certain mandatory vaccinations. A patient in the West who wanted to avoid the vaccination for personal reasons, could do so without fear of repercussion due to a high regard for medical confidentiality. It would have been treated as a matter of strict confidentiality between the doctor and the patient. In the East, a person who wanted to avoid a vaccination for personal reasons could presume that his decision would be made known to the authorities subject to punitive sanctions. The doctors in the East were not allowed to practice full medical confidentiality, the public good” took priority in so far.

Case Study 2 Recently, when a German pilot deliberately crashed a plane into an inaccessible part of the French Alps, the impact was felt worldwide. While everybody is still confused about how this could have happened, it is not clear how frequently such an event might have taken place. Unreliable statistics suggest that this might be only the fourth such case in aviation history. What has become clear about this case is that this pilot had consulted no less than 43 medical doctors leading up to his crashing the plane. Yet the airline denies knowing the severity of his medical and psychological condition due to the strict respect for medical confidentiality. They only knew what he had reported to them. There is an ongoing and intense discussion in Germany about when a medical doctor should be legally obligated to violate a patient confidentiality. This example illustrates the great need for corporations and medical professionals to keep abreast of the changing needs of the balance between confidentiality and corporate and societal interest. The old status quo does not fit to the challenges of the Digital Age. b) Legal Confidentiality

English Law esteems Professional Discretion as a fundamental principle of Common Law. It has also been codified in Criminal Law (Courts and Legal Services Act 1990,sec. 63; Police Act 1997,sec. 98) 4. New Protection is needed Copyrights, Patents and Professional Discretion all depend on the proper handling of information. Until now legal protection may have been sufficient. In the Digital Age they now need new types of protections to keep functioning. Information can be duplicated as often as requested. Universities, Libraries, Book Stores served the purpose of spreading knowledge and values with as many people as possible. They were effective in their time, but the Digital Age has left them behind. The Digital Revolution cannot be turned back. All knowledge seems now to be available to everybody everywhere with the speed of light. This is in serious conflict with corporations and professions who want to protect their own proprietary data. In the past, laws and other regulations have been the generally accepted tool to protect information. However, the speedy advance of hightech products runs circles around the ability of laws and regulations to be current. Neither national boundaries nor geography can any longer be an obstacle to those who might threaten from far away.

In the Digital Age the issue “Death of Distance” must be dealt with. Frances Cairness of The Economist published the book “The Death of Distance, How the Communications Revolution will change our Lives” as early as 1997.

Her final conclusion on page 279 is not discouraging: “Humanity may find that peace and prosperity are fostered by the death of distance.” Is the current situation a reminder of the race between the tortoise and the hare? Technology is the hare racing ahead out of control. The tortoise must surely be the legal and corporate entities plodding along well behind.

One can only hope that like the proverbial tortoise will prove successful in the long run.

5. How serious is the situation in Germany?

According to a study, every second corporation in Germany has been a victim of data theft and/ or sabotage. (Study of IT - Branchenverband BITKOM). Automotive, chemical and pharmaceutical companies are prime targets . Systematic research has come to the conclusion that practically every company is vulnerable { lnstitut fUr lnternetsicherheit, Stefan Tomanek). The very recent cyber-attacks against the Members of the German Federal Parliament have left little doubt

that protective measures are needed. Until now the problem has been clearly underestimated and often ignored. Too little is being done too late.

6. Remedies While corporations have profited from many aspects of the Digital Age, it has been a mixed blessing.

The same mobile instruments which have made communication easier have also made digital attacks easier. Another neglected danger lurks in the shadows, all too often those good old record keeping practices appear to be increasingly forgotten or ignored. Essential emails, memos, and important phone calls seldom are entered into the “old fashioned” filing systems. Technological progress has seduced us into neglecting many such practices. The “Law of Laziness” which has infected practically all of us only adds to the problem.

A high percentage of damage can be avoided simply by stopping negligence. It is the responsibility of everyone in a corporation to recognize mistakes in procedures and take steps to correct them.

Developing a clear distinction between sensitive and non-sensitive data would be a good place to start. Of course, this would probably require organizational changes. New firewalls may be a major cost factor.

How effective they might be remains to be seen.

Getting a second opinion from another IT security expert would not hurt.

Germany has passed a law on June 12, 2015 on IT Security. This is a first step in the right direction .The law focuses on protecting corporations acting in the public interest. Therefore most private corporations remain responsible for their own security. If Germany would focus on further copyright amendments it would appear to be another step into the right direction.

The best practical option appears to be the installation of an independent “corporate intranet”, running parallel, but not connected to the internet system.

As a consequence it would take quite an effort to transfer all emails from the Internet to the Intranet.

Experience shows it would be worth the effort.

Reading Emails in the Internet without understanding the full context reduces the risks. Keeping lawyers and business files away from the Internet would at least be a strategic advantage in the Digital Age. It would only be an interim solution. Full Protection against hackers is primarily a technical problem.

Legal Confidentiality has a long and consistent history in Germany in spite of changing political and governmental systems. Starting in 1495 German lawyers had to swear an oath to respect the pledge of secrecy (WehIer, Geschichte der Rechtswissenschaft ,S. 127). During the Bismarck era starting in 1871Germany introduced regulations on Procedural Law and Civil Law, labeled as century Laws. Professional Discretion became an undisputed duty (Henssler/Prutting, BRAO, 3rd Edition,§ 43 a Rn. 45).

In the European Union professional discretion has been elevated to the highest level being designated as a basic right (Grundrecht) in all EU countries (GA Kokott 29.4.2010, Rs. C-550/07 P, Rz 57 ff.; Wolf/ Hasenstab, BRAK-Mitt.

4/2010, 150).

Acquisition International - July 2015 39

www.acquisition-intl.com

Germany:

Remaining Europe's Economic Powerhouse

Brockhaus Private Equity GmbH email: info@brockhaus-pe.com Address: Myliusstrasse 30 D-60323 Frankfurt am Main Telephone: +49 (0) 69 71 91 6170 Fax: +49 (0) 69 71 91 6171

In a world afflicted by a rise in uncertainty, far sighted investors have recently taken a growing interest in Germany, a country noted for combining political stability with economic clout. Their attention has turned, in particular, to Germany’s famous Mittelstand, the thousands of world beating, yet often little known, medium-sized manufacturing firms that have helped Germany recover from the global financial crisis faster than most economies and are now fueling the country’s export-led growth.

Identifying Germany’s next ‘hidden champions’ early on and turning their growth into an attractive return for investors is a complex art. Among those that have mastered it, our firm, Brockhaus Private Equity stands out with unique capabilities and a compelling track record.

With over twenty successful deals to its name, including landmark transactions such as Wirecard and 360T, Brockhaus Private Equity has firmly established itself as a key player in Germany’s mid-cap private equity market since its launch in 2000. Formed around a team of professionals with strong backgrounds in investment banking, corporate finance, tax consulting and law, Brockhaus Private Equity manages and advises funds worth more than 250 million Euros in total and makes equity and equity-related growth capital investments in the range of 5 million to 25 million Euros per transaction. We pride ourselves on our independence as well as our impressive investor base which includes, among others, pension funds,

40 Acquisition International - July 2015

savings banks, insurance companies, family offices and a public separate estate managed by the German Federal Ministry of Economic Affairs and Energy. An attractive annual return rate since our inception is testimony to a remarkable success story now opening a new chapter with our most recent fund Brockhaus Private Equity III. The key to our outstanding investment performance is our sharp focus on medium-sized innovation and technology leaders. Representing an elite group within the Mittelstand, these companies are characterized by highly innovative products and cutting-edge technologies that often set global standards, enabling them to achieve annual growth rates of more than 10% as well as EBITDA margins above 15%. Typically, they boast leading market positions in Germany and have embarked on successful expansion abroad, but still have some way to go to exploit their full global potential. Gaining access to these largely familyowned firms, typically tucked away in small towns far removed from Frankfurt, Munich or Berlin, is no easy task. However, our institutionalized sourcing process of incorporating many different channels of information, including a close-knit network of M&A and cross-industry contacts, enables us to generate first class proprietary investment opportunities on a regular basis. Wirecard and 360T, as well as our latest investment Thermamax Group, are examples for the unique opportunities provided by proprietary deal situations with no middle man involved.

Germany: Remaining Europe’s Economic Powerhouse

Strict pricing discipline is crucial to our proven approach. Our strong preference for exclusive deal situations helps us avoid unreasonable entry valuations. Furthermore, the involvement of seasoned industry experts from our professional network enables us to evaluate the full potential of our investment targets, as well as to spot possible risks early on in the due diligence phase. Another key factor for our success lies in our stringent portfolio management. This begins with the careful selection of managers capable of moving the portfolio company forward through special product know how or sales expertise, as new management team members or external advisors, even before the deal has been closed. Next comes the implementation of a post-closure “100 Day Plan“ designed to boost the portfolio firm’s professional standards. This is especially important in areas such as finance and accounting, before the focus is shifted towards

leveraging mid and long term upside potential via structural changes aimed at entering new markets, expanding the product range and making suitable add-on acquisitions. Leaving nothing to chance, we take great care to prepare time and price optimized exit strategies early on as well as to introduce potential buyers to the portfolio firm at the best possible time, thus creating perfect conditions for maximum transaction success.

Visionary thinking, speed and flexibility are deeply embedded in Brockhaus Private Equity’s corporate DNA. However, the biggest praise we regularly receive from business partners is the recognition that we truly speak the language of entrepreneurs and understand their aspirations and needs like no-one else. More than anything, it is this respect for our role as an entrepreneurial minded and long term oriented financial partner that genuinely sets us apart from our competitors.

Brockhaus Private Equity III is well poised to emulate the impressive performance of its two predecessors. Significantly, the fund has already invested more than 30 million Euros to date.

Having purchased a majority stake in automotive component supplier J&S GmbH Automotive Technology as well as a stake in high-temperature shielding specialist Thermamax Group, two hightech firms boasting superb market positions, high profitability and exceptional rates of growth. Several further investments are already in the pipeline with the aim of closing a further transaction in 2015.

If one thing is certain, it is that German ‘hidden champions’ with great potential are still in abundant supply. Investors choosing ‘value made in Germany’ and partnering with the right private equity firm are therefore set to be winners for many years to come.

Acquisition International - July 2015 41

www.acquisition-intl.com

The Golden Age of Investment in Poland Baker Tilly in Poland is a professional services firm of accountants, auditors and business and tax advisers. As independent members of Baker Tilly International, we are committed to providing the best possible service to our Clients.

Tomasz Taff, Strategy Advisory Group Director.

With over 450 professional staff serving multinational and domestic clients in Poland, the Czech Republic and Slovakia, we have earned an enviable reputation for our quality of services, proactive approach, technical excellence and focus on communication and reporting.

Tomasz Taff (MBA), Strategy Advisory Group Director, is responsible for building relationships with Clients and helping them define a strategy supporting their development and achievement of short and long-term goals. He gained his professional experience in leading financial institutions where he was responsible for strategic project management, reengineering and sales management.

What took you here will not take you there Polish companies have endured the economic crisis generally in good shape, but those factors which helped them cope with it may become a burden in the long term.

Even though it is widely recognised that Poland hasn’t suffered severely from the financial crisis and has remained a green island on the economic rough seas, the Polish economy, as in other countries, has been affected by the crisis (the decline in GDP growth from 6.8% in 2007 to 1.6% in 2009).

Another issue is that Poland thanks to a few circumstances managed to reduce the negative influence of the European and global economic downturn (especially when compared with other European counties) and coped with it very well.

However, resources that enabled Poland to survive the crisis are not enough to ensure a sustainable growth. In the first place let’s take a look at factors that supported Poland, especially the Polish entrepreneurs during the crisis.

The main reason why Polish companies managed to cope with the crisis was due to relatively low labor costs. It resulted in competitiveness of Polish products and consequently in growth of export and it promoted Poland’s investment attractiveness in the international arena. Poland attracted attention of global concerns, which started to open there factories and distribution centers, creating new working places. The growing demand on qualified employees provided a clear impulse for the development of Polish education (although

42 Acquisition International - July 2015

much still needs to be done in this area). Foreign investors in Poland used modern technologies which, combined with low labour costs, positively affected the efficiency of production processes and supported product competitiveness.

Also, very helpful for Poland were strong connections with the German economy (over 25% of Poland’s export was targeted at western neighbours in 2008) which, even though it was affected by the crisis, provided a demand for Polish production due to stable financial grounds.

The Financial crisis coincided with the time when Poland was the main beneficiary of the EU structural assistance. This, in turn, had a direct effect on the public investments scale, which created additional demand and stimulated the economy.

The crisis spread through financial channels due to connections in the banking sector. Paradoxically, the underdevelopment of the financial sector in Poland, as compared to highly developed economies, turned out to be an asset for Poland. Banks didn’t involve in complicated securitisation operations based on debt, or in other derivatives (famous CDO and CDS). Polish banks attained high profits from their basic activities, credit operations, high fees and commissions.

An exception to this rule were currency options transactions which, used by some entrepreneurs as speculative products, caused considerable loss.

The factors that helped Poland in surviving the turmoil caused by the financial crisis may cease to be an asset in the long run.

In the long term, the competitive advantage cannot be built when it is mainly based on low labour costs.

More importantly, it is probably the last time when Poland may count on such a high share redistributed from the European funds. So what can Polish entrepreneurs do in this case?

When it is impossible to maintain low labour costs, one should work on efficiency and innovativeness.

These concepts, very often overused, remain key when building competitive advantage.

Companies may look more closely at their processes, identify their strengths and weaknesses, eliminate mismanagement and reorganise processes so that

The Golden Age of Investment in Poland

one can realise company operations to maximum extent. To improve one has to know how to measure.

That is why investments in systems that support managerial operations are another challenge for Polish entrepreneurs. Building an adequate management information structure, which would measure factors indicating where the greatest value for the company is created, ERP systems, process management methodology including those globally proven, building process organisation, management through projects, outsourcing of support functions such as accounting, HR and payroll, are just a few tools which support building of efficiency.

Innovativeness is a second key to keep a strong position of Polish companies in Europe. It is worth using to a greater extent the intellectual capital and building a wide range of solutions based on R&D. Last but not least, there is one more opportunity that opens for the Polish. It is expanding to foreign markets.

A number of companies have already begun operations aiming at the increase of innovativeness and efficiency. Some of them have started this even during the crisis, as they saw it as an opportunity.

Many companies are still about to face those challenges. Luckily, most of them are led by welleducated and experienced people who do not have complexes when facing competition on foreign markets. This capital itself may be the greatest competitive advantage.

Acquisition International - July 2015 43

www.acquisition-intl.com

The Netherlands: Investment Destination The Netherlands is a perfect business location for foreign entrepreneurs. The country is the gateway to densely populated Western Europe and has excellent logistics and a well-developed technological infrastructure (Amsterdam Schiphol Airport, Port of Rotterdam).

Company: Russell Advocaten Name: Reinier W.L. Russell (managing partner) Email: info@russell.nl Web: www.russell.nl Address: Reimersbeek 2 1082 AG Amsterdam The Netherlands P.O.Box 87400 1080 JK Amsterdam The Netherlands Telephone: +31 20 301 55 55

44 Acquisition International - July 2015

The Netherlands has a stable economy, a stable government and a good infrastructure. Not only has the country an extremely favourable business climate, but it is also a good location for expats to live. As a result, we have twelve “Fortune 500” listed companies, and several major IT and data centre companies have already set up businesses here.

of law are: corporate law, business formation and reorganization, real estate and lease law, labour/ employment law and (commercial) litigation.

The Dutch economy is open to foreign investors and investments are not restricted by specific government regulations. Entrepreneurs are given great leeway in establishing a business that suits their needs. On top of that, a highly skilled, multilingual and flexible work force and favourable tax regulations for businesses make the Netherlands an interesting place for foreign companies.

Russell Advocaten maintains good, long-standing and intensive contacts with a diverse group of clients, such as foreign (stock exchange listed) companies, government authorities, and foreign embassies and consulates. We provide our clients with all round legal assistance for their day to day business in the Netherlands. We do not only offer assistance during the establishment of a business entity, we also provide advice when it is in full operation and encounters any (legal) issues. Being entrepreneurs ourselves, Russell Advocaten is pre-eminently equipped to act as a sparring partner for (foreign) entrepreneurs.

Your guide to investments in the Netherlands Russell Advocaten is a full service law firm based in Amsterdam, the financial heart of the Netherlands.

The city reflects the international character of the Dutch economy hosting 2,000 foreign subsidiaries that employ 140,000 people. At Russell Advocaten, we provide prompt, high-quality legal services throughout the Netherlands and are able to render advice on a broad range of fields. Our main areas

Our dedication to both our clients and our work has been recognized by several independent organisations. Over the last few years, Russell Advocaten has been awarded “Best Employment Firm”, “Best Real Estate Firm” and “Best Commercial Law Law Firm in the Netherlands”. For many years Russell Advocaten has been recognised in several fields by The European Legal 500. For more information see www.russell.nl.

Company: WH Partners Web: http://whpartners.eu/ Address: Level 5, Quantum House, 75 Abate Rigord Street, Ta’ Xbiex XBX1120, Malta

An Alternative to Traditional Corporate Finance: Securitisation Cell Companies in Malta The growth of diversification in alternative financing opportunities is a natural consequence of a European financial services environment, in which banks and quasi-bank funding markets are increasingly reluctant to commit to long-term lending. This has steadily boosted the market for new sources of funding in particular securitisation transactions.

Malta’s securitisation legal and regulatory framework establishes a transparent and effective funding tool for businesses which is broad enough in scope to allow all types of assets and receivables which provide an income stream to be securitised, whether existing or future, moveable or immoveable, and tangible or intangible. A Maltese securitisation structure is an arrangement whereby a special purpose vehicle (‘SPV’) acquires the securitised assets by any means, assumes risks, or grants secured loans or other secured facilities by financing these through the issue of financial instruments.

SPVs in securitisation transactions may under the Maltese law take the form of a company, partnership, trust, foundation, or other legal structure that has been approved for the purpose by Malta’s single financial services regulator, the Malta Financial Services Authority (‘MFSA’).

Through the introduction of unique regulations under Malta’s Companies Act at the end of 2014 and as part of a drive to enhance capital markets activity in Malta, the Maltese legislator extended the use of protected cell company structures which had garnered much popularity within the insurance industry to the securitisation transactions. In doing so, Malta became the first EU Member State to allow for the use of protected cell companies as securitisation vehicles. This move additionally

pre-emptively complemented the European Commission’s drive for the creation of a European Capital Markets Union proposed this February 2015, in which securitisation transactions are expected to play an important role.

A principal feature of a securitisation cell company is that its individual cells and their comprised assets and liabilities are treated as a separate patrimony from the assets and liabilities of every other cell and from the securitisation cell company itself, ensuring also thus that no cross-contamination occurs should one individual cell become insolvent. Securitisation cell companies may commence business once they notify the MFSA, while securitisation companies that propose to issue financial instruments to the public must be licensed prior to the issue to the public.

From a fiscal perspective the securitisation vehicles may benefit from Malta’s attractive tax regime.

The Maltese securitisation cell companies regulations promise an advantageous and innovative funding mechanism for businesses seeking legal certainty on fundamental aspects relating to segregation of cell patrimonies as well as flexibility in structuring the securitisation transaction and in so doing consolidate Malta’s potential to cement its position as the domicile of choice for European securitisation transactions.

Acquisition International - July 2015 45

www.acquisition-intl.com

Impact of Transactions on Brands Much of the recent M&A landscape has been dominated by multi-million acquisitions by technology firms such as Google, Facebook and Apple, with examples including Google’s 2014 $3.2bn acquisition of Nest, Facebook’s $19.5bn acquisition of WhatsApp and Amazon’s $970m acquisition in November 2014 of video-game streaming service Twitch.

Company: BDO Name: Jon Steward, Manager BDO UK Web: www.bdointernational.com

Whilst the initial emphasis on deal completion is understandable, particularly in competitive marketplaces, how much consideration is given to brand value? Arguably the most valuable but least understood intangible assets are brands, suggesting at the very least the influence of a brand should be factored into pricing decisions, particularly where the target brand is to be repositioned or exploited going forward.

Financial Reporting For the purpose of post-acquisition financial reporting, how often does the fair value attributed to ‘brand’ represent a material contribution of the purchase consideration? In many cases, in addition to goodwill, consideration will reflect value attributed to intangible assets over and above brand, such as customer relationships/subscribers/users, software capabilities and intellectual property.

Following 3G Capital’s $3.3bn acquisition of Burger King in 2010, approximately 43% of the consideration was attributed to intangible assets (including brand). This compares to approximately 33% of the $11.3bn consideration in December 2014 following the merger of Tim Hortons and Burger King, resulting in the creation of Restaurant Brands International Inc (“RBI”). RBI’s year-end financial statements show brand values for ‘Tim Hortons’ and ‘Burger King’ of $6.2bn and $2.2bn respectively, significant when set against RBI’s year-end market capitalisation of $18.2bn. Whilst these values differ markedly to values of $4.6bn and $3.2bn within BrandZ’s recently published ‘most valuable global brands’ report, these are examples of brands that have been enhanced following M&A, with BrandZ’s 2010 report having valued the brands at $3.2bn and $1.8m respectively.

Facebook’s $521m acquisition of photo-sharing service Instagram in 2012 resulted in only 12% being recognised in respect of intangible assets (including brand) whereas Vodafone’s acquisition of £1.05bn acquisition of Cable and Wireless saw 31% attributed to intangible assets (but with only £54m to the acquired brand), suggesting that in financial reporting terms at least, brand ‘value’ may be more impacted by business sector and an acquirers intentions for the brand going forward.

46 Acquisition International - July 2015

Another pending transaction is the £111.9m takeover of Thorntons, by the Italian chocolate maker Ferrero, with the acquisition representing the company’s first acquisition of a branded company.

Ferrero, the fourth-largest confectionery brand in the world, has announced it will retain the historic ‘Thorntons’ brand but will perform a review of the underlying business, which has struggled in recent years. Whilst an allocation of the transaction price is unknown, Thorntons’ current net assets of £14.8m will mean the bulk of the consideration being allocated to intangible assets and goodwill.

So what we can learn from this? In determining offers for branded companies, potential acquirers will likely consider the wider quantitative and qualitative factors that contribute to the brand’s offering but are probably unlikely to mechanically perform any extensive ‘valuation’ of the brand. If performed, valuations would typically be performed via one of an income approach (relief from royalty method, excess-earnings method or capitalisation of historic or future earnings attributable to a specific brand), cost-approach (in creating or replacing an equivalent brand) or a market-approach (reliant on publicly available similar transactions).

In all likelihood, purchasers and vendors will have differing opinions on brand value and may assess value via opposing parameters, with purchasers likely to capture investments required to re-position, revive or grow the brand going forward. Whilst financial reporting allocation provides indicators of where a market acquirer perceives value in a target company, figures are based on information and forecasts at the point of acquisition.

Impact of Transactions on Brands

Brands in Sport Professional sport is big business, with few teams/ countries forgoing the lucrative sums on offer from sponsorship agreements and football leading the way, with its near global-reach.

In July 2014, Manchester United announced a 10-year £750m sponsorship with Adidas and a 7-year £329m agreement with General Motor’s Chevrolet brand. According to BrandZ’s most recent research, the value of the club’s brand has increased by 63% to $1.2bn, which represents approximately 40% of the company’s current $2.9bn market capitalisation.

Similar deals have been agreed by rival clubs, with Manchester City and Nissan announcing a global partnership and Chelsea’s recent 5-year £200m agreement with Japanese tyre manufacturer Yokohama. Middle Eastern airline brands are also becoming increasingly visible, with Fly Emirates emblazoned across the shirts of Real Madrid, Arsenal and Paris St-German at an estimated aggregate annual cost of $128m, with Etihad and Qatar Airways sponsoring Manchester City and Barcelona respectively (with Arsenal and Manchester City also having sold stadium naming rights).

So how brand enhancing is this? In share price terms at least, Nissan’s price has risen since the announcement, whilst Deutsche Telekom’s continued association with Bayern Munich has also been coupled with a rising share price. Whilst it is clearly unrealistic to infer any direct correlation between high-profile branded sponsorship arrangements and share price and it will be difficult to quantify the incremental impact on the number of flights, cars or mobile contracts purchased as a result, the increasing value (and number) of such deals merely illustrate how these represent mutually beneficial arrangements through which brand value can be enhanced, even if this may be through increased subliminal exposure to a target audience.

Conclusion Ultimately, business transactions rarely involve only the acquisition of a corporate brand. Such instances are typically limited to instances of asset disposals on a break-up basis. Instead, the primary motivations for acquisitions are varied and include synergistic benefits (and cost-savings), as defensive actions from competitors or facilitating business expansion into non-core markets or territories. One thing that is certain is the importance of the brand value as part of these M&A drivers.

Ultimately, whilst the old adage that there is ‘no such thing as bad publicity’ is questionable, reputations are generally enhanced and whilst the recent storm developing around FIFA may be embarrassing to its high-profile sponsors such as Coca-Cola or McDonalds, there appears to have been little impact on the underlying company and/ or brand values.

Acquisition International - July 2015 47

???

60 Seconds With...

We catch up with some successful companies currently flourishing within their respective sector.

60 Seconds With...

We provide asset finance for both public and private sector clients and work with channel partners to give their customers an alternative to paying cash for ultimately depreciating assets. We cover everything from IT and other office equipment through to plant, machinery, furniture and fit out projects.

Transactions range from £1,000 up to £10M+ which keeps us very busy!

Name: Steve Russell Company: Bluestone Leasing Limited Email: info@bluestoneleasing.com Web Address: www.bluestoneleasing.com Address: Silkwood Court, Silkwood Park, Wakefield, West Yorkshire WF5 9TP. Telephone: 01924 248800

Who are your clients?

One of the great things about the business is the range of customers we work with. In the public sector, where we have seen great growth as government purse strings have tightened, education, NHS and local authority work is booming. In the private sector we naturally help a lot of the SMEs who have found our ability to secure finance refreshingly different from their experience with the high street banks.

Larger corporates and FTSE 100 companies really understand the importance of deploying their capital effectively and we can make a real difference for them with tax efficient solutions that maximise their return.

What makes you unique?

We’ve won a significant number of awards in the last few years and although we are recognised as great innovators in the industry (such as our Attain partner programme, 1-Touch mobile quote tool and Access Anytime 1-2-1 scheme for education), at the heart of our proposition is the service that we provide.

We often secure funding where others can’t which reflects just how close we get to the customer to understand their needs and how well we deliver.

What’s your biggest challenge facing you at present?

Personally, and as Sales Director of an incredibly successful business, it’s finding the hours in the day!

I’m known for being very hands on, which is great as you get a real feel for what customers and partners

need, but it is also about developing talent in the team to take on more senior roles too. Maybe one day I will have enough time to take up golf!

What’s the aim for your business?

We believe we are at the heart of helping the UK economy recover and grow. We help business and public sector clients, on a daily basis, invest in vital projects at a time when high street banks remain largely unwilling to help. Our aim is to grow our presence across the UK and provide assistance to as many organisations as we can.

What’s your company’s biggest challenge?

After twenty years in business, the last three years have seen us grow an amazing 338%. It is clear that UK plc really like what we have to offer and the challenge we now face is fuelling that growth, bringing on new people to grow the team further and maintaining our standards and ethos throughout.

Luckily we have a great group so it is very much a team effort.

What business/business person do you most admire and why?

Learning more about Steve Jobs, his life and its challenges and everything he achieved both at Apple and Pixar, is truly inspiring and proves that if you have enough belief and determination, you can achieve anything.

Acquisition International - July 2015 49

www.acquisition-intl.com

Metre Squared Interiors was formed in 2004 to provide their clients with a complete package of services from space planning & design right through installation on site of office partitions, ceilings, flooring, Air Conditioning, Decoration as well as Electrical & IT infrastructure which are all carried out by our dedicated team to the highest standards.

We then also deal with the actual client relocation into the new space and take care of any dilapidations that maybe required to their old offices. We are also dealers for several Office Furniture manufactures & are able to supply innovate cost effective furniture solutions to suit all budgets.

Company: Metre Squared Interiors Ltd Name: Marc Price Email: mgp@m2interiors.net Web Address: www.m2interiors.net Address: 27 Lexington Street London W1F 9AQ Telephone: 0845 838 2656

What do you see as the most relevant and vital areas to focus on when it comes to providing the best possible service?

Our key areas of focus starts when we first look at a new project and carrying out a detailed site survey to establish a full list of works that need to be undertaken and not leave out unexpected surprises within our costs that others then advise the client are extras or additions to contract in order to get away with submitting a cheaper bid words which are guaranteed to set a divide between a company and their client. As a result of this detailed pricing policy a major problem has being drawing the clients attention to check what other companies have not allowed for within their quotation as although on occasion our cost may have been higher we would have been more cost effective at the end of the day.

What should clients be looking for when seeking to work with a business in your sector and how does Metre Squared Interiors Ltd go about meeting these requirements?

Most importantly a client should be looking for a working partnership not just to engage a fit out contractor there needs to be a healthy interaction between all parties as well as free flowing information going backwards & forwards in order to deliver a successful project as I have said before Communication is the Key and this is where we excel What sets your firm apart from your competitors and peers and how do you use this differentiation to your advantage?

50 Acquisition International - July 2015

What sets us apart from other companies is we feel simple “Project delivery & quality” and that’s what we pride ourselves on as well as being able to deliver a project on a tight budget to have the look and feel that the budget was higher by providing alternative products that maintain the look and feel but at a more cost effective solution.

What have been the most prevalent trends in your industry over the past 12 months?

Clients now look for more contemporary office environment instead of the more traditional office, a space that portrays their own brand, ethos & image to their client base and one that allows free movement of staff & ideas within the company.

So we now find were creating more open space & casual meeting areas and install a lot of full height glass partitioning to let light through coupled with funky manifestation designs and floor finishes. IT & Audio Visual advances have made the introduction of lighting control via IPad more common place as well as video conferencing.

What developments or changes do you see having the biggest impact on your business and industry over the coming year and where do you think the biggest opportunities – and challenges – will lie?

Having the election now behind us will make a big difference for the forthcoming year as companies were putting their relocation & expansion plans to new offices on hold before the outcome. With what I hope is stability now restored and confidence growing in the market I can see busy times ahead indeed this has been supported by the amount of new enquires received here in the office over the last couple of weeks.

The challenge will be to meet the rising client demand by keeping on a structured path of growth & investing in quality people to add to the Metre Squared Interiors family.

60 Seconds With...

Champ Consultants is a firm of tax advisers and qualified accountants.

We help owner managed businesses and high net-worth individuals minimise their overall tax position and maximise their personal income.

Who are your clients?

Our clients are usually established businesses that are owner managed. We advise both UK individuals and those non-domiciled in the UK. What makes you unique?

We listen to our clients and not just speak to them.

We ensure we understand exactly what the client requires and when we provide them with our solution and options we ensure that we speak to them in plain English and not technical jargon.

Company: Champ Consultants Ltd Name: Chantal Baker, Co-founder and Director of Champ Consultants Email: info@champconsultants.co.uk Web address: www.champconsultants.co.uk Address: 34 Westway, Caterham, Surrey CR3 5TP Telephone: 01883 349300

What’s the aim for your business?

My aim for the business is to be known as the tax advisers and accountants of choice for entrepreneurs and growing businesses.

What’s your company’s biggest challenge?

Our biggest challenge is to continue to provide a specific service to our existing and new clients while continuing to grow. We try to do this by.

We are in the downstream marketing of Petroleum Products in Mauritius.

Our SBUs include Aviation, Retail, Consumer and Marine. We also market world class lubricants under the brand name of SERVO.

What makes you unique?

Innovation & Quality have been the differentiating factors for us. Apart from providing the consumers with first ever fully solar powered Retail Outlet & first ever Non-Space Dispensing Unit in Mauritius, we also maintain the highest quality of product by being the only petroleum company in Mauritius to receive its products through segregated pipelines and also being the only company in Mauritius to have a stateof-the-art laboratory, which is also ISO certified.

What’s your biggest challenge facing you at present?

Fluctuations in oil prices leading to inventory carrying losses have been a major cause of concern. However, conscious efforts are on to address the same through innovative inventory management.

Company: IndianOil (Mauritius) Ltd Name: Ranjan Kumar Mohapatra, Managing Director

What’s the aim for your business?

We have a vision to be ‘in every part and in every heart’ in Mauritius. We are definitely inching towards being the ‘most preferred energy supplier’ in Mauritius. We are here to make a difference.

Email: indianoil@ioml.mu Web Address: www.ioml.mu Address: IndianOil (Mauritius) Ltd, Mer Rouge, Port Louis, Mauritius Telephone: (+) 230 2172710

Our target market would be clients with gross profit over £350,000 that wants to review their overall tax position and possibly make tax savings. We would look at all their possible taxes including corporation tax, income tax, capital gains tax and inheritance tax as well as providing management information to help businesses make timely decisions.

Who are your clients?

Each Fuel user is our prospective client, be it the entire population of the Island or major Airlines like Air Mauritius, Emirates & Air France, or Consumers like Transport Companies or Manufacturing Sectors requiring Fuel & Lubricants to meet their Energy Needs.

What business/business person do you most admire and why?

Ratan Tata is one business leader, I admire from the core of my heart for his Visionary, Authentic, Inspiring, Dynamic and Ethical Leadership. He is truly an inspirational and n-nonsense leader, who has taken the TATA conglomerate to different high, while having the highest level of employee satisfaction and motivation.

Acquisition International - July 2015 51

www.acquisition-intl.com

Company: Westkin Associates Email: info@weskin.com Web Address: www.westkin.com Address: Head Office 19 Noel Street, London W1F 8GW Mayfair Office, 16 Hanover Square, Mayfair, London W1S 1HT

Westkin Associates are a specialist immigration law firm based in Mayfair, London.

We cover all areas of immigration law, including business related fields such as the Investor and Entrepreneur visas and the acquisition of Sponsorship licenses to hire foreign nationals in the UK. Other areas of expertise include joining family in the UK, human rights claims and asylum cases.

We provide a comprehensive service, project managing every step of an application and tailoring our services to the specific needs of our clients.

Who are your clients?

As a leading immigration law firm we service clients globally. Our clients are of a myriad of nationalities including citizens from the USA, Russia, China, UAE, India, Pakistan, and Nigeria, along with many other nationalities.

Dealing with a wide range of immigration issues means that we have a wide range of clients. We work with investors in the UK, company directors, and entrepreneurs. We also work with top athletes, students and refugees fleeing persecution.One of the many benefits of working in immigration law is the multitude of diverse and interesting people you meet and develop partnerships with.

What makes you unique?

Our proven record has led to our longevity as a law firm and our specialist teams ensure every case is handled by lawyers who are experts in that particular field.

For example, our entrepreneur teams have extensive experience working with various businesses, specifically business-based immigration. This means that we are able to advise and give detailed guidance in such niche areas.

Another important factor is how we work with our clients. Central to our approach is developing longterm professional relationships with our clients.

We continue to hold an interest in our clients matters, even after their visa is granted. We notify them ahead of time of upcoming deadlines and plan ahead until they are granted their British citizenship.

52 Acquisition International - July 2015

What’s your biggest challenge facing you at present?

The exciting thing about challenges is having to be creative and find solutions. I don’t think there is one particular challenge that we are facing, more a range of small challenges that make up a typical day here.

What’s the aim for your business?

Our aim is twofold. We always strive to find solutions, manage and exceed expectations of people who need immigration assistance. We also seek to continue developing our business domestically and internationally. Recently we have expanded our offices in London due to increased demand and we seek to continue this growth in other areas of our business, such as developing our presence among expanding markets abroad.

What’s your company’s biggest challenge?

Not so much of a challenge, but a constant objective is always operating one-step ahead of the Home Office. We always anticipate upcoming amendments to the law, guiding clients successfully through the minefield that can be immigration policy.

What business/business person do you most admire and why?

Although Richard Branson has flown the flag for team G.B for years and is a proven pioneer, I would have to say Elon Musk of Space X. He has continuously pushed the boundaries of technology and human thought.

Working with entrepreneur clients you develop a relationship with individuals who have different visions and ideas and witnessing their businesses grow beyond expectations is fulfilling.

60 Seconds With...

V & P Law Firm (Vgenopoulos & Partners Law Firm) is a Greek full service corporate and business law firm. We were established over 25 years ago, and since then we have worked in close cooperation with our clients in a vast variety of business sectors. Powered by their success we have grown to be one of the largest law firms in Greece, with offices in Athens and Piraeus.

Who are your clients?

Our firm supports clients across the full spectrum of the Greek business environment. Our clients include commercial companies in all industries and range in size from industry leaders to fledgling operations.

We also work for utilities; banks and other financial institutions; insurance and reinsurance companies.

What makes you unique?

We have created a business which utilizes our size, presence and expertise enable us to meet legal requirements on practically any scale, but which ensures that our lawyers still offer the attention to detail, accessibility and responsiveness that are crucial to achieving our clients’ goals. Our entire approach is geared towards providing a resultsorientated service hallmarked with creative solutions to commercial problems.

What’s your biggest challenge facing you at present?

Unfortunately, The Greek legal market has been inevitably affected by the European financial crisis.

This has affected all sectors of the economy, particularly the flow of legal work and especially in the area of new investments.

Name: Dr. Alexandros K. Kalantzis Company: VGENOPOULOS & PARTNERS Law Firm (V&P Law Firm) Email: kalantzis@vplaw.gr Web Address: www.vplaw.gr Address: 15, Filikis Eterias Sq. 106 73 Athens, Greece Tel: +30 210 7206 900 Fax: +30 210 7231 462

What’s the aim for your business?

Our aim is to continue to offer our clients the legal services they need, at the highest possible professional standards, despite operating in a very competitive environment with extremely pressing demands.

BEAM Corp is a boutique, privately owned and licenced independent corporate adviser firm, domiciled in Australia. We specialise in providing corporate advisory services to the Australian SME sector. The service suite encompasses capital raising; mergers and acquisitions; divestments; generational transition; general corporate advisory work.

Who are your clients?

Our client base are listed and privately held companies who are profitable, niche and specialist in their sector.

BEAM has a broad footprint in the Australian market providing services to the Financial Services, Technology, Medical, Digital and high integrity Engineering sectors.

What makes you unique?

Our specific focus on dealing with mid-tier SME owned companies. We work with bespoke disciplined problem solving methodologies. It is our structuring and implementation capability which makes BEAM unique. All our work is referral based and we have a large portion of repeat clients.

What’s your biggest challenge facing you at present?

BEAM is performing in a rapidly moving market, which provides us with the challenges of coping with the diverse and changing needs of our client base.

Name: Eric J Melman Company: BEAM Corp Pty Ltd Email: eric.melman@beamcorp.com.au Web: www.beamcorp.com.au Address: Level 10; 6 O’Connell Street Sydney, NSW 2000 Telephone: +612 8540 4672

What’s the aim for your business?

Our aim is to provide unique, bespoke solutions which we specifically tailor to address the complex individual needs of our clients.

What’s your company’s biggest challenge?

BEAM biggest challenge is to use management of counterparty expectation to deliver our best possible service on time.

What business/person do you most admire and why?

We are big admirers of Warren Buffet. They combine the ability to evaluate markets, make value added decisions and the resolve to implement these decisions, which is an admirable feat.

Acquisition International - July 2015 53

www.acquisition-intl.com

Netage Solutions has provided industry-specific asset management and reporting software for the alternative investment industry since 1998. Netage’s signature Dynamo™ product suite comprises a fully configurable CRM, online investor portal, and mobile application that optimize the productivity of deal teams, investor relations teams, and investment research professionals.

Who are your clients?

Dynamo™ is currently entrusted by over 300 alternative investment firms worldwide, that collectively control over $1 trillion in assets under management. Our clients encompass private equity and venture capital groups, hedge funds, funds of funds, institutional investors, family offices, real estate investment firms, and prime brokers.

Name: Krassen Draganov Company: Netage Solutions, Inc. Email: sales@netagesolutions.com Web: www.NetageSolutions.com Address: 480 Pleasant Street, Suite B200 Watertown, MA 02472, United States Telephone: +1 866.4.DYNAMO

What makes you unique?

Dynamo’s™ open architecture enables our implementation team to configure the platform’s presentation to fully align with the operational priorities and established infrastructure of our clients, and seamlessly carry those configurations over to the latest product updates.

What’s your company’s biggest challenge?

Netage’s core challenge in the marketplace is communicating the long-term benefits of adopting an industry-specific software solution for asset and relationship management, rather than higher profile generic management systems. These generic solutions lack the deep feature sets tailored to alternative investment firms, and customizing these platforms can cause significant pain points when updates are required.

The software’s configurability also enables us to engage in rewarding partnerships with our clients.

We regularly solicit our clients for actionable feedback, and their responses directly impact our product and service roadmap, facilitating more robust user experiences.

As a result, we have created an ambitious content marketing plan designed to educate the marketplace on the advantages of an industry-specific solution, which includes whitepapers, webinars, blog posts, and case studies.

What’s your biggest challenge facing you at present?

Netage has prioritized expanding Dynamo’s™ ability to centralize clients’ investment research, performance tracking, and portfolio analysis, and are actively integrating the software with industry-leading third party data providers. We recently announced data integration partnerships with both PitchBook and BarclayHedge, which further complements our integration with Bloomberg.

54 Acquisition International - July 2015

What’s the aim for your business?

Netage aims to continuously evolve Dynamo™ to adapt to the shifting trends and regulations in the alternative investment industry. We also work to ensure our clients receive an intuitive user experience from our software, as well as exceptional personalized service from our implementation team.

What business/business person do you most admire and why?

I admire both my father and my grandfather. My grandfather was a school headmaster, and his confidence and consistency made him widely admired. I conduct myself in the same fashion aspiring for the same results. My father was an engineer, and his self-drive and creativity in the face of adversity have been core competencies I developed under his guidance.

60 Seconds With...

RSM Poland are a unique accountancy office, tax advisory office and auditing company. RSM consists of professional advisors and reliable business partners who provide services of the highest quality in auditing, accountancy outsourcing, payroll and reporting, tax and legal advisory and also transaction advisory and M&A.

Name: Bartosz MIŁASZEWSKI, Managing Partner Company: RSM Poland KZWS Email: bartosz.milaszewski@rsmi.pl Web: http://www.rsmi.pl/en/ Address: ul. Miła 2, 00-180 Warsaw, Poland Telephone: +48 22 560 06 66

What’s the biggest challenge facing you at present?

We will be adopting ‘RSM’ as our global brand name across all member firms worldwide. These changes will be effective from 26 October 2015, when all RSM member firms will adopt the unified global brand name as well as, “the power of being understood” brand positioning, and a new logo.

What’s the objective of your business?

Our main objective is to be the advisor of choice to entrepreneurial, growth-focused organisations. We strive to provide our clients with the highest level of service, a trusted relationship and ideas and insight that really adds value to their businesses.

Who are your clients?

Our core client base ranges from growth-focused entrepreneurial businesses through to leading multinational organisations across many sectors, operating both nationally and internationally.

GBST is a leading provider of software and services to the global financial services industry. As one of company’s main business divisions, GBST Wealth Management has more than 30 years’ experience delivering innovative and reliable funds administration and registry software to the Australian and UK wealth management industries.

Name: Rob DeDominicis, Chief Executive Officer, GBST Wealth Management Company: GBST Email: robert.dedominicis@gbst.com Web Address: http://gbst.com/ Address: 8th Floor, Linen Court, 10 East Road, London N1 6AD, United Kingdom Telephone: +44 20 7613 8800

What makes you unique?

Our company is shaped by our clients so their requirements always take priority. It is our clients who decide about the range of available services, which allows them opportunities for development and growth at every stage of their business.

Who are your clients?

GBST Wealth Management provides technology solutions to major platforms and pensions providers and administrators.

What makes you unique?

The configurability and inter-connectedness of GBST’s Composer® solution is one of our key competitive advantages. It gives clients enormous flexibility to shape the technology to their specific needs and add further features over time.

We believe our continued investment in product development makes us unique in the marketplace with more than 10% of revenue invested in research and development expenditure during the last financial year. Our significant investment in technology ensures that our products are

What’s your company’s biggest challenge?

Our clients are becoming ever more global. Leaders and decision-makers of entrepreneurial, growing organisations need advisors that really understand and care about their business and its drivers, both locally and globally. We need to assure them that we will have their business interests at heart – no matter what services are required or where they are needed. These values are an integral part of the network’s new global positioning: “The power of being understood”.

competitive, flexible and scalable to support everincreasing demands for new capabilities.

What’s your biggest challenge facing you at present?

The last year has seen unprecedented legislative change in the UK retirement market which has come at a time where clients are also demanding new functionality, especially around mobile access.

However, GBST has a proven track record to maintain the Composer® platform with market changes and innovate with new capability at the same time. We are committed to maintaining our position at the forefront of functional and technology innovation and have a comprehensive 18 month development road map.

What’s the aim for your business?

Our aim is to continue to deliver next generation technologies that inspire our clients to create sustainable competitive advantage through new products and services.

What’s your company’s biggest challenge?

We operate in highly competitive markets across the globe and maintaining our market leading position while driving growth requires significant ongoing technology investment.

Last year we invested in the establishment of a technology development centre in Ho Chi Minh City which now employs more than 140 skilled staff.

The centre is making a valuable contribution to our ongoing product development ensuring we continue to deliver next generation technology software and services to support ever-increasing demands for new capabilities.

Acquisition International - July 2015 55

www.acquisition-intl.com

Simply Online Leads (SO Leads) is an award-winning firm, specialising in online lead generation for financial services providers, brokers and intermediaries.

Web: www.simplyonlineleads.com Telephone: 01244 457289

In a highly competitive marketplace, lead generation is absolutely essential, in order to maintain a steady stream of business and to stay ahead of competitors.

SO Leads recognises the demands that each individual business has to face and offers a simple, affordable solution.

A flexible approach means that we are always able to stay ahead of the game, seeking out and using innovative technology to provide our customers with the best quality leads that they can get.

We offer brokers an unrivalled online platform with which to manage their business, engage with consumers and increase their sales conversions.

The platform allows the opportunity to select specific leads for the exact financial products that they are currently offering, in specified locations across the UK - this ensures that each lead is specifically targeted and that they will only be speaking to customers who are genuinely interested in their products and services.

Our superior technology is all backed up by a professional and knowledgeable account management team, ensuring that the day to day business runs smoothly.

As the UK’s premier lead generation firm, quality and customer service are at the core of our business.

Our team are dedicated to working closely with brokers to understand and identify their individual business needs.

56 Acquisition International - July 2015

Here are just a few reasons why brokers choose to work with SO Leads: • • • • • • • •

Unique lead generation platform operating 24/7 Providing real-time, exclusive web-leads Pre-qualified live customer transfers Flexible agreements to suit the needs of your business Self-serve or fully-managed accounts Professional & friendly team members The most extensive refund policy in the UK Winner of 2013 & 2014 Most Outstanding Lead Generation Firm

Not only do we work with a network of trusted affiliates, but we provide leads through our own price comparison site, sosmartmoney.co.uk. Our website offers consumers a smart and simple way to look at their personal finances, either by comparing products online or seeking further advice from a panel of experts.

For brokers, the consumer journey is completely transparent, allowing them to maximise their conversions and gaining a trusted relationship with the customer, often enabling repeat business year on year.

Since its launch in 2012, SO Leads has continued to go from strength to strength, being recognised by fellow professionals as a leader within the industry, winning numerous awards and establishing itself firmly as the number one lead generation business in the UK.

60 Seconds With...

Since 1953, Axel Gollnick has provided exceptional M&A advisory services for upper mid-market companies in nearly every industry on a global level.

Who are your clients?

Our client base is very diverse and we advise family-owned businesses, multinational corporations and institutional investors such as PE funds and family offices.

What makes you unique?

As the German team of our M&A International Inc. organisation we offer the unparalleled, global resources of 650+ M&A professionals in 46 M&A consulting firms operating in 42 countries. This enables us to provide our clients with experienced, specialist advice.

What’s your biggest challenge facing you at present?

Our challenge is to continue to provide exceptional service to our existing and new clients by continuously reviewing our performance.

What’s the aim for your business?

We aim to be the first choice partner in Germany for mid-market M&A transactions.

Name: Axel Gollnick Company: Angermann M&A International GmbH Email: axel.gollnick@ angermann.de Web: www.angermann-ma.de Address: ABC-Straße 35, D-20354 Hamburg / Campus Kronberg 7, D-61476 Kronberg / Bolzstraße 3, D-70173 Stuttgart Telephone: +49 40 34914-160, +49 6173 7 02-115, +49 711 22 45 15-12

What’s your company’s biggest challenge?

Our biggest challenge is to strengthen the competitive advantages of our global reach and international sector expertise.

What business/business person do you most admire and why?

We really admire the “hidden champions” of the German Mittelstand, who are global market leaders in their respective niches.

Stan Advoka is a classy boutique IP law firm with a fully transparent business model that provides drafting, preparation, filing and prosecution of industrial property rights in Turkey and worldwide.

Name: Baris Atalay Company: STAN ADVOKA PATENT LTD. Email: info@stanadvoka.com Web: www.stanadvoka.com Address: Bahariye Cad, Sakizgulu Sok, 35/15, 34713, Kadikoy, Istanbul, Turkey Telephone: +90 216 346 4545

What does your business do?

We represent local and international clients before the Turkish Patent Institute, the World Intellectual Property Organization (WIPO) and the European Patent Office (EPO). We operate mainly in Turkish and/or English and also work fluently in French, allowing us to work internationally to draft Patent applications in the official language of the patent granting authorities.

What makes you unique?

We have a talented team having a cost-conscious approach with expertise and qualification before the Turkish Patent Institute, the World Intellectual Property Organization (WIPO) and the European Patent Office (EPO). We support in-house patent departments of top patent filers, which are also major economical actors in Turkey in terms of export earnings. Our firm stands head and shoulders above its rivals in patent prosecution with its talented crossdisciplinary English, French and German speaking team. Stan Advoka is also one of the few Turkish IP firms managed by a patent attorney who holds qualification degree before the European Patent Office and who also was the first EQE-qualified attorney in the country after accession to the European patent zone. Our company prepares patent applications in the fields of mechanics, electronics, telecommunications, software-related inventions, nanotechnology and chemistry. Some of our patent attorneys act as court-appointed experts before the specialized IP courts of Istanbul and we also provide legal services in patent infringement and invalidity cases in Turkey.

Who are your clients?

One of the main practice areas of Stan Advoka is assuming responsibility for the preparation of European and international patent applications. Our clients our clients include a wide range of firms such as large enterprises as well as small and medium sized businesses, universities, institutions and private inventors. Some of our clients are listed among companies with the highest market capitalization, as well as the top patent filers in Turkey.

What’s your biggest challenge facing you at present?

In an environment where the official authority has taken measures, including fee reductions and tax advantages to promote IP awareness and support filings, our main challenge is to maintain client satisfaction along with a healthy growing strategy. We are a firm dedicated to maintaining our production quality rather than increasing production output, which we have found to be an excellent business strategy in Turkey.

Acquisition International - July 2015 57

www.acquisition-intl.com

Q2 round-up The second quarter of 2015 has generated impressive investment levels, according to Zephyr, the M&A database published by Bureau van Dijk. In total almost USD 1,484 billion was invested across 19,620 deals between April and the end of June, marking an increase by both volume and value on the first quarter.

Q2 2015 has come to a close and by value represents the best result since the second quarter of 2007. This is also the fifth consecutive quarter in which investment levels have exceeded USD 1,000 billion. The USD 1,484 billion injected into the region represents a 35 per cent increase on the USD 1,103 billion recorded in Q1 2015 and 17 per cent on the USD 1,273 billion notched up in the second quarter of 2014.

The most commonly targeted sector in the second quarter of this year is machinery, equipment, furniture and recycling, which has received investment of USD 204,345 million. Others include banks and chemicals, rubber and plastics, which were targeted in deals worth USD 166,970 million and USD 163,138 million, respectively.

Number and Aggregate Value (Mil USD) of Deals Globally: 2006-2015 to date (as at 30 June 2015) Deal half yearly value (Announced date)

Number of deals

Aggregate deal value (mil USD)

Q2 2015

19,620

1,483,604

Q1 2015

18,959

1,103,285

Q4 2014

21,044

1,159,847

The most commonly targeted region worldwide in 2015 has been the Far East and Central Asia with 6,031 deals, putting it ahead of its nearest competitor, which is Western Europe with 5,783. Third place was taken by North America, which came further behind with 3,763 transactions. In spite of this placing, North America actually led the field by value with investment of USD 477,329 million, suggesting higher individual considerations over the six months. Western Europe again placed second while the Far East and Central Asia followed in third. The two regions were targeted in deals worth USD 445,332 million and USD 412,847 million, respectively.

Q3 2014

21,024

1,119,672

Q2 2014

19,976

1,273,434

Q1 2014

20,293

882,258

Q4 2013

22,535

950,761

Q3 2013

20,263

1,031,585

Q2 2013

19,606

912,656

Q1 2013

17,996

736,231

To sum up, Q2 2015 has been encouraging as both volume and value increased on the first quarter of the year and also compared well with the same period of 2014, when USD 1,273 million was invested. This will increase hopes of continued improvements over the coming months with a view to 2015 eventually finishing on a high note.

Q4 2012

17,560

965,874

Q3 2012

14,638

594,066

Q2 2012

14,985

635,598

Q1 2012

14,714

526,418

hands-on grey matter.

.Mergers & acquisitions .Gaming and gambling .Payments .Corporate finance .Software licensing .Brand protection .Sponsorship .Image rights .Privacy .Data protection .e-money .Company incorporation .Company maintenance .Insolvency .Restructuring .EU cross-border trade .Competition (anti-trust) .Employment .Consumer protection .Domain name disputes .Taxation .Real Estate .Financial services .eCommunication .Wealth management .Cryptocurrency FINANCIAL AND CORPORATE RECOMMENDED FIRM

2015

Level 5 Quantum House 75 Abate Rigord Street Ta’ Xbiex XBX 1120 Malta Telephone: (+356) 20925100 Web: www.whpartners.eu

58 Acquisition International - July 2015

The Deal Diary

Welcome to the Deal Diary, our monthly round up of the recent M&A activity across the globe.

As always, we feature a range of transactions across a number of different sectors.

With each diary entry, we’ll be taking a comprehensive look at the inner workings of the deal in question and will be venturing behind the scenes to take a look at the dedicated professionals involved in ensuring its success.

Have you done a deal lately? If so, then we want to hear from you.

Head over to www.acquisition-intl.com and submit the details.

powered by

Deals

Frasers Hospitality acquisition of Malmaison Hotel du Vin Group Frasers Hospitality UK Holdings Limited, a wholly-owned subsidiary of Frasers Centrepoint Limited (“FCL”), successfully completed the acquisition of Malmaison Hotel du Vin group (“MHDV”) of boutique lifestyle hotels for a consideration of GBP363.4 million (approximately S$760 million) from an affiliate of KSL Capital Partners, LLC. MHDV owns two upscale boutique lifestyle brands – Malmaison and Hotel du Vin – comprising 29 boutique lifestyle hotels and 2,082 keys across 25 cities1 in the United Kingdom. “FCL’s strategy remains focused on achieving balanced growth across asset classes and diversifying our earnings profile. This acquisition is important as it doubles our offerings in Europe to about 4,000 keys and it propels Frasers Hospitality to be one of the leading hospitality players in this market.” said Mr Lim Ee Seng, Group CEO of FCL. Both Malmaison and Hotel du Vin enjoy healthy average occupancies of over 80% for the last three years and achieve superior Revenue Per Available Room (“RevPAR”) against their peers. “MHDV provides a tried and proven DNA in the boutique lifestyle segment for us. The purchase of Malmaison and Hotel du Vin perfectly complements our brand portfolio and gives Frasers Hospitality a platform to expand into the fastest growing hospitality sector. We look forward to building on this success with future development in the UK, Europe and Asia,” says Frasers Hospitality’s CEO, Choe Peng Sum. “With these two best-in-class lifestyle brands, we are on track to reach our goal of operating 30,000 keys by 2019.”

Merlin Piscitelli, senior director, Merrill DataSite represented the sell side team for the provision of the online due diligence platform. Mr. Piscitelli commented: “This was a complex process requiring extensive due diligence on a wide variety of materials. Merrill DataSite was delighted to be selected to provide the secure, online due diligence platform for sharing confidential information between the sell and buy-side teams on this project over a period of six month to a successful close.”

Virtual Data Room Provider

Debt Providers

Financial Due Diligence Provider

Financial Adviser to the Vendor

Management Team Due Diligence Provider

Merlin.Piscitelli@merrillcorp.com www.datasite.com

Perceva’s acquisition of Vanity Fair Brands Europe

Virtual Data Room Provider

Perceva has made an offer and entered into exclusive negotiations with Fruit of the Loom for the acquisition of Vanity Fair Brands Europe, its European ladies’ lingerie business.

The project will now be presented in compliance with applicable laws to the employee representative bodies.

Legal Adviser to the Purchaser

Vanity Fair Brands Europe designs and distributes the ladies’ lingerie collections of four brands (Variance, Lou, Vanity Fair and BestForm) and a swimwear brand, Cherry Beach. Thanks to the complementarity of these strong and appealing brands, the group reaches a very large female audience. The group has a turnover of EUR 55 million and employs 300 people.

Jean-Louis Grevet, President of Perceva, says: “Vanity Fair Brands Europe has a strong attractive market position thanks to its amazing portfolio of brands. The group has all the assets to enter into a new phase of its development. Our ambition is to support its growth in France and abroad by addressing efficiently the needs of the customers.”

Financial Due Diligence Provider

Jerome Pottier, director, Merrill DataSite represented the sell side team for the provision of the online due diligence platform. Mr. Pottier commented: “Vanity Fair Brands Europe, owned by Fruit of the Loom, has a high-end positioning in its industry and Merrill DataSite was very proud to be selected as the virtual data room provider on this project. Merrill DataSite is the high-end, marketing leading VDR solution and was pleased to help “showcase” this prime asset sale.”

Jerome.Pottier@merrillcorp.com www.datasite.com

60 Acquisition International - June 2015

Legal Adviser to the Purchaser

Deals

Oteac makes £10.25 million acquisition of HVAC&R

Legal Adviser to the Vendor (Seller)

Oteac, the Aberdeenshire-based integrated fire and safety services organisation, has acquired critical heating, ventilation and air conditioning company HVAC&R Limited (HVAC&R), in a deal worth £10.25 million with funding from Lonsdale Capital Partners.

The company’s acquisition and integration with HVAC&R will create an enhanced engineering services offering for customers’ safety needs, as well as providing opportunities for growth both in the UK and internationally. HVAC&R will retain its name and will become part of the Oteac Group, with its 108 employees more than doubling Oteac’s existing staff of 80.

Financial Adviser to the Vendor (Seller)

HVAC&R’s Managing Director, Raymond Davidson, will remain with the company to provide customer support during the period of integration. Russell Bell, the other company founder, will also be remaining with the company in his current role of Services Director. Following the acquisition, HVAC&R will shortly move to larger custom built premises at Murcar, Aberdeen, which will enhance production capability to meet increasing customer demand for its Hazcool and Climarine brands.

Bill Hogarty, CEO of the Group said, “There are many new avenues to develop and grow by combining these two companies. By bringing them together we are pooling the best resources in the industry to create a significant offering to customers - linked by legislation and compliance.”

Established in 1985, OTEAC is an international service company offering fire and gas detection and suppression systems and related design and engineering services to the oil and gas and marine sectors globally, together with a complementary onshore fire and security business serving large private and public sector clients.

Tax Adviser

HVAC&R (Heating, Ventilation, Air Conditioning and Refrigeration Limited) headquartered in Aberdeen, Scotland is a leading provider of business critical and bespoke engineering solutions; primarily to the oil and gas, onshore petrochemical and marine sectors. It was established in 1999 by Raymond Davidson and Russell Bell. The Company operates predominately in the North Sea, as well as overseas with customers in Asia Pacific, the Middle East, the Caspian Sea, Central Europe, Africa and the Americas.

Lindab International AB : Lindab acquires Ventilation Company with technical products and solutions expertise Lindab has entered into an agreement in principle with the IMP TIO Group to acquire IMP Klima. IMP Klima’s business includes products and solutions for ventilation and indoor climate with specific expertise in air handling units and fans. The acquisition strengthens Lindab’s ambition to develop its position as a complete supplier of ventilation and indoor climate solutions.

Advised Lindab

IMP Klima has its registered office and principal business in Slovenia, with units for production and a modern research and development centre. Production is also carried out in Sarajevo, Bosnia. Turnover amounted to around EUR 25.6 million in 2014 and the business employs approximately 415 employees.

Sales are primarily to the Balkans, Russia, Europe and the Middle East.

Lindab’s President and CEO, Anders Berg, commented: “Through the strategic acquisition of IMP TIO’s climate business we sharpen our offering even further and strengthen our competence in complete solutions, which also means greater confidence for our customers. Earlier this year, Lindab acquired MP3 with excellence in fire and smoke protection, and now we take a further step in the realisation of our strategy.

Advised Hidria

The air handling unit is an important part of a ventilation offering, which is why IMP Klima, characterised by high quality and great competence, forms a very important and welcome addition to Lindab’s business and adds strength within a number of areas other than air handling units as well. Furthermore, we strengthen our market position in several areas.”

The acquisition is expected to generate synergies primarily on the sales side, and will make a positive contribution to Lindab’s business within a year.

The completion of the transaction is subject to final registration of restructuring on the seller’s side as well as to approval from certain national competition authorities.

Acquisition International - June 2015 61

Deals

Gamestop Corp. Announces Agreement To Acquire Geeknet, Inc.

GameStop Corp. , a family of specialty retail brands that makes the most popular technologies affordable and simple, and Geeknet, Inc., the parent company of ThinkGeek and ThinkGeek Solutions, have announced they have entered into a definitive agreement under which GameStop will acquire all of the outstanding shares of Geeknet’s common stock for $20.00 per share in cash. The transaction has been approved by the board of directors of both companies and will be completed by means of a tender offer.

The transaction has a total equity value of approximately $140 million, including $37 million of cash and cash equivalents as of March 31, 2015.

financial advisor

legal advisor

Geeknet also announced that it had terminated its previously announced merger agreement with Hot Topic, Inc. (“Hot Topic”). Following discussion with both GameStop and Hot Topic, the Board of Directors of Geeknet determined that the GameStop transaction represented a superior proposal. Geeknet will pay Hot Topic a termination fee pursuant to the Hot Topic agreement, for which GameStop has agreed to reimburse Geeknet.

Paul Raines, chief executive officer of GameStop, stated, “This acquisition creates value to all stakeholders involved. The addition of Geeknet is an important expansion of our global multichannel platform and we are excited to leverage their product development expertise to broaden our product offering in the fast-growing collectibles category and deepen relationships with our existing customer base.”

About GameStop GameStop Corp. a Fortune 500 and S&P 500 company headquartered in Grapevine, Texas, is a global, multichannel video game, consumer electronics and wireless services retailer. GameStop operates more than 6,600 stores across 14 countries.

Geeknet’s exclusive financial advisor

legal advisor

About Geeknet Geeknet, Inc. (NASDAQ: GKNT) is the parent company of ThinkGeek and ThinkGeek Solutions. ThinkGeek is the premier retailer for the global geek community. Since 1999, ThinkGeek has been creating a world where everyone can express their inner geek, embrace their passions, and connect with each other.

Daisy Group offers to gobble Phoenix IT Group for £133m Financial adviser to Phoenic IT Acquisitive B2B tech and comms player Daisy Group has bid 160 pence per share for LSE-listed Phoenix IT Group valuing the services operation at around £133m.

Talk of a deal has rumbled along for more than a year but with Phoenix in the middle of a three-yearturnaround plan under the latest CEO and no longer reporting steep losses, a rising market cap was thought to be a potential stumbling block. Obviously not.

In a statement to the stock market, Phoenix confirmed it is “advanced discussions” with Daisy “regarding a possible recommended cash offer for the entire issued, and to be issued share capital of the company at a price of 160 pence per share”.

It added that Daisy has completed due diligence and is “well advanced with the finalisation of the necessary financing arrangements”, and the board at Phoenix is “willing” to recommend the deal to shareholders.

This gives Phoenix an equity value of £133m, but this does not include the debts owed by Phoenix, which would take the agreement to £179m, according to analysts.

In line with stock market regs, Daisy must either confirm its intention to make an offer or not for Phoenix by 18 June, the 28th day following today’s statement.

“The board of Phoenix has indicated to Daisy that it is willing to recommend the key financial terms of the possible offer to Phoenix’s shareholders, subject to finalising the other terms and conditions”.

The public offer caused a 19 per cent bounce in Phoenix’s share price, giving it a market cap of £127.45m. The business is preparing to push out fiscal ’15 numbers early next month.

As for Daisy, it was pulled off AIM in January following a management buy-out by chairman Matthew Riley, backed by several private equity firms. The plan is to double the business inside a five years — as of March ’14, the company had revenues of a little over £350m.

62 Acquisition International - June 2015

legal advice to Phoenic IT

Deals

SoftBank to Invest $1 Billion in South Korea’s Coupang

Advising Softbank

Japan’s SoftBank Corp. said that it would invest $1 billion in South Korea’s largest mobile commerce company Coupang as it aggressively increases investments in overseas Internet companies.

The deal, which the companies said is the largest Internet investment in South Korea’s history, will add SoftBank to a roster of private investors in Coupang that also includes BlackRock Inc., Sequoia Capital and hedge-fund investor William Ackman.

The Coupang deal comes after Masayoshi Son, the founder and chief executive of the Japanese telecommunications and Internet giant, vowed last month to significantly boost the Japanese company’s overseas presence following its 2013 takeover of U.S. mobile operator Sprint Corp.

Last month, Mr. Son named Nikesh Arora, a former Google Inc. executive, as his heir apparent, putting him in charge of leading what Mr. Son called a “second phase” of growth that will see SoftBank boost investments in Internet companies.

Advising Softbank

Advising Coupang

Cargill to acquire majority stake in Turkey’s Ekol Gida

Legal Adviser to the Vendor (Seller)

The U.S.-based food giant Cargill have announced that one of its units has agreed on terms to acquire a 51 percent stake in Ekol Gıda, which operates in the premixes and animal feed additives market in Turkey.

The deal, which is subject to regulatory approval, is expected to close in summer 2015, the company said in a press release.

No financial details have yet been disclosed.

“Customers will gain access to Cargill’s extended product portfolio and technical expertise,” said Mark Poeschl, vice president and group director of Cargill’s animal nutrition business.

The commercial focus of the company will be on Turkey and other particular export markets.

Financial Adviser to the Vendor (Seller)

Serhad Çelik, founding partner and general manager of Ekol Gıda, said the company will “increase its customer network in premixes, feed additives and enhance market knowledge.”

Cargill said that the transaction was “aligned with Cargill’s animal nutrition business’ growth strategy.”

“In addition to retaining Ekol Gıda’s products and services, Cargill will also strengthen its commitment to Turkey as a primary growth market by building technical applications centers for poultry and dairy, raising research and development capabilities,” said the company.

Tax Adviser TO SELLER

After a transitional period, the business will operate under the global Provimi brand in the market.

Acquisition International - June 2015 63

Deals

MCI.TechVentures’ acquisition of stake in Pigu Group

Advised the MCI.TechVentures

MCI.TechVentures 1.0, managed by the Private Equity Managers Capital Group (PEManagers Group), has signed an agreement for the acquisition of a majority shareholding in Pigu.lt (Company), the e-commerce leader in the Baltic States. The transaction is still subject to approval by relevant competition authorities.

Pigu.lt is the e-commerce leader in Lithuania and Latvia. Since 2014 it has been dynamically extending its operations in Estonia. With over a million registered customers, the Company’s revenue is nearly EUR 50 million. The Company offers over 90 thousand products to its customers online, including household appliances, electronics, fashion, cosmetics and children products.

– Shareholders are pleased to partner with an experienced e-commerce investor. This will further strengthen our leading position in the Baltics and assist us in providing world class services to our customers – said Mykolas Majauskas, the Chairman of the Supervisory Board of Pigu.lt.

– The Company has a huge potential. The markets in the Baltic States are less saturated than in Western Europe, and the popularity of online shopping is increasing. At the same time, we believe that these countries will experience a strong growth of the e-commerce market due to robust economic performance and well developed broadband infrastructure – adds Maciej Kowalski, Investment Partner in Private Equity Managers S.A.

Advising the Pigu Group

Pigu.lt is another investment of the PEManagers Group in the e-commerce sector, after Morele.net, KupiVIP or Mall.CZ. This means that the Company will receive not only financial support but will also benefit from investment and operating experience of managers from the PEManagers Group.

About Pigu.lt: Pigu.lt, established in 2007, is a leading e-commerce player in Baltics. It started in Lithuania and expanded to Latvia (as 220.lv) in 2011. Since 2014 it has also experienced a dynamic development in Estonia (as www.kaup24.ee). The product range includes: electronics, household appliances, furniture and furnishings, fashion, cosmetics, children products, sports products, etc.

Largest Nordic Coffee Chain Espresso House Bought by JAB

Financial Adviser to the Vendor (Seller)

JAB Holding Company has reached a deal to buy the Nordic region’s largest branded coffee chain, Espresso House, including 193 shops in Sweden and Norway.

Despite the enormity of the deal — unquote.com reports that the trade between JAB and Hercules Capital was worth approximately 2.2 billion Danish krone ($328 million USD) — Espresso House represents only a small wing in JAB’s growing coffee portfolio.

Legal Adviser to the Vendor (Seller)

The company, run by billionaire Reimann family, has in the past three years purchased controlling stakes in coffee companies including Peet’s Coffee & Tea, Caribou Coffee, and D.E. Master Blenders. The latter company remains in the process of merging with Mondelez International, which would make JAB a majority owner in the world’s largest roasting company.

“Espresso House fits perfectly into our portfolio of leading premium coffee roasters and coffee retailers around the globe,” JAB Co-Chief Peter Harf said in a statement obtained by Bloomberg News. “The company possesses favorable long-term fundamentals, giving it strong potential.”

Commercial Due Diligence Provider

64 Acquisition International - June 2015

Deals

IFF moves to acquire Lucas Meyer Legal adviser to IK Investment Partners International Flavors & Fragrances (IFF), a leading global creator of flavours and fragrances, is expanding into cosmetics ingredients with the acquisition of Lucas Meyer Cosmetics, a business of Unipex Group.

IFF has made a binding offer of approximately 283 million euros.

Headquartered in Quebec City, Canada, with operations in France and Australia, Lucas Meyer Cosmetics offers active and functional ingredients that address health and wellness macro-trends in the beauty industry in both the developed and emerging markets.

“This acquisition would combine our fragrance expertise, global commercial network, leadership in natural ingredients, and unique R&D pipeline with Lucas Meyer Cosmetics’ research and cosmetics ingredients innovation,” said Nicolas Mirzayantz, Group President Fragrances at IFF. “This will strengthen our product offerings and enable IFF to be one of our customers’ partners of choice in the very attractive skin care and hair care segment.”

The acquisition, which will be funded from existing resources, is expected to close in the third quarter of 2015 and is expected to add revenues of approximately 40 million euros on an annualized basis.

Financial advisor

Sonic Healthcare buys Medisupport S.A. in Switzerland for about $315m Sonic Healthcare will acquire Swiss medical laboratory group Medisupport S.A. for a mix of shares and cash as chief executive Colin Goldschmidt looks to expand the group’s European footprint.

The company said that it has signed binding agreements to acquire Medisupport for 277 million Swiss francs ($315 million) in cash and it will issue at least 3,559,452 million shares, which will be issued to Medisupport’s founders and partners.

Advised Sonic Healthcare

Mr Goldschmidt said the acquisition will make Sonic the number one player in the Swiss laboratory market.

“Our further expansion in the Swiss laboratory market is a logical step for Sonic Healthcare, as we move to strengthen our position in Europe,” Mr Goldschmidt said.

“Medisupport’s strong capabilities in many laboratory disciplines, including genetics, will provide valuable synergy enhancement opportunities for Sonic in Europe and around the world.”

Medisupport operates in 10 cities across Switzerland, employs 700 people, and has annual revenues of 160 million Swiss francs.

The deal price represents a multiple of about 8 times Medisupport’s 2015-16 earnings before interest, tax, depreciation and amortisation.

Sonic said the deal is expected to boost earnings per share by 8 per cent initially and to drive further EPS increases after synergies have been realised.

Medisupport’s founders and partners will continue in their executive roles on a long-term basis.

Read more: http://www.smh.com.au/business/sonic-healthcare-buys-medisupport-sa-in-switzerland-forabout-315m-20150615-gho16n.html#ixzz3g9b8bZw1

Acquisition International - June 2015 65

Deals

White & Case Advises Sale of Polenergia Shares Global law firm White & Case LLP has acted as exclusive legal counsel on the sale by Mansa Investments sp. z o.o., a wholly-owned indirect subsidiary of Kulczyk Investments S.A., of 15.4 percent of the shares in Polenergia S.A..

The share offer, which amounted to approximately €46.5 million through an accelerated book-building, was addressed to institutional investors in Poland and other jurisdictions outside the US in accordance with Regulation S of the US Securities Act of 1933.

Exclusive legal counsel

Société Générale acted as Global Coordinator and, together with Bank Zachodni WBK S.A. and Dom Maklerski PKO Banku Polskiego, as Joint Bookrunners.

The White & Case team which advised on the deal included partners Marcin Studniarek (Warsaw), Doron Loewinger and Inigo Esteve (both London), local partner Rafał Kamiński (Warsaw) and associate Marta Osowska (Warsaw).

Stada’s acquisition of Internis Pharmaceuticals Advised Internis Pharmaceuticals STADA Arzneimittel AG have acquired the UK generics provider Schein Pharmaceutical Holdings UK Limited and its subsidiary Schein Pharmaceutical UK Limited, both based in Newbury, supplying their Genus Pharmaceuticals marketing line to the UK generics market (2002 annual sales of approximately EUR 11 million). The seller is Schein Pharmaceutical (Bermuda) Limited, a subsidiary of US-based Watson Pharmaceuticals, Inc., California. The purchase price is EUR 17 million. As a result of this deal, STADA is acquiring a lean, sales & marketing-focused company with 19 employees whose products are made by contract manufacturers and sold in the market with the aid of additional external sales persons.

Its portfolio comprises 18 products in 35 dosage forms for various types of treatment, including a cardiovascular product already being sold under license for STADA. Generics for surgeries and hospitals generate roughly 85% of sales, with the remainder coming from branded products.

STADA reported generics sales in the UK of around EUR 10 million in 2002. So far, these sales have been generated solely by the export activities of various subsidiaries. GenRX, a company set up jointly by STADA and a local partner in 1999 to sell and distribute generics in the UK, has never been operational.

STADA plans to swiftly integrate most of its existing export sales into its newly acquired marketing line.

The STADA group’s product pipeline also contains approved products that have yet to be introduced but are ready for distribution in the UK. The European dimension to STADA’s development activities will continue to provide the new subsidiary with a steady flow of new products.

66 Acquisition International - June 2015

Advised the shareholders of UK-based Internis Pharmaceuticals

Deals

Jagran Prakshan acquisition of Music Broadcast Pvt Ltd

Foraying into radio business, leading media group Jagran Prakashan (JPL) have announced acquisition of Music Broadcast Pvt Ltd, which operates the popular Radio City FM stations.

Jagran Prakashan, which runs leading Hindi daily Dainik Jagran, said the all-cash acquisition of Music Broadcast Pvt Ltd (MBPL), which had a turnover of Rs 161.8 crore last fiscal, is expected to provide strong return on its investment.

Legal Ad`viser to the Purchaser/management team

However, the exact deal size could not be ascertained.

Commenting on the development, Jagran Prakashan CMD Mahendra Mohan Gupta said: “This deal will catapult JPL into a leadership position in the radio industry and enable the company to benefit from the rapid growth in radio advertising.

Acquisition of Radio City further consolidates our position as India’s leading media and communications group.”

Radio business will complement JPL print, outdoor activation and digital business and enable deeper inroads with advertisers both at national and local level, he said.

“The radio business has witnessed significant growth in recent past and is expected to grow at more than 18 per cent CAGR in the coming years,” Mr. Gupta said.

Financial Due Diligence Provider

Life Invest’s acquisition of Skandia Leben Johannesburg - Old Mutual PLC said that they had agreed to sell its Skandia Leben business in Switzerland - which has funds under management of CHF 1.3 billion - to Life Invest Holding AG, as part of the Anglo-South African financial services group’s continued strategy to streamline operations.

Old Mutual said in a statement that it would not be disclosing the financial terms of the deal just yet.

Life Invest Holding is owned by the Mutschler Group and Hannover Re.

advised Old Mutual

On December 31, Skandia had funds under management of CHF 1.3 billion. It made CHF 25 million of pre-tax adjusted operating profit in 2014.

Earlier this month, Old Mutual reported that gross sales rose at an above-forecast 18 percent to 7.3 billion pounds ($11.50 billion) in the first quarter, boosted by acquisitions, inflows and market gains.

Acquisition International - June 2015 67

Deals

CVS Health’s acquisition of Omnicare

Financial Adviser to the Vendor (Seller)

CVS Health Corporation has agreed to acquire Omnicare Inc for a total enterprise value of approximately $12.7bn, including $2.3bn in existing debt. The deal will see CVS pay around $10.4bn, or around $98 per share, in cash. The agreed price represented a 4 percent premium over the company’s closing price on 20 May, the day before the deal was announced.

The two companies expect the deal to be completed near the end of 2015, subject to approval by the holders of Omnicare’s common stock, as well as other customary closing conditions, including applicable regulatory approvals.

Omnicare has a burgeoning reputation in the pharmaceutical sector and is a rising firm in the business of prescription fulfilment for diseases including cancer and multiple sclerosis. The firm is also the largest provider of prescription medication to nursing, assisted living and other healthcare facilities in the US.

Represented Target

“The acquisition of Omnicare significantly expands our business, providing CVS Health access into a new pharmacy dispensing channel,” said CVS Health’s president and chief executive Larry Merlo, in a statement announcing the deal. “It also creates new opportunities for us to extend our high-quality, innovative pharmacy programs to a broader population of seniors and chronic care patients as they transition across the care continuum. We have been impressed by the Omnicare team and what they have created for the patients they serve.”

CVS intends to complete the transaction by utilising $13bn of fully committed unsecured bridge financing which has been secured from Barclays Bank. The company also expects to put in place permanent financing in the form of senior notes and/or term loans prior to the closing of the transaction.

Legal Advisers

The rapidly ageing US population has made the long term care segment of the healthcare system an extremely attractive proposition. As such, CVS’ play for Omnicare positions the company nicely for the future, as healthcare for the elderly is likely to be a considerable growth area moving forward.

Graanul Invest’s acquisition of SIA Latgran The Red law firm has advised Graanul Invest on its acquisition of SIA Latgran, the largest wood pellet producer in Latvia, from shareholders BillerudKorsnas AB and Baltic Resources AB. The transaction is expected to close in July 2015.

SIA Latgran operates 4 pellet factories in Latvia, with an annual production volume of approximately 500,000 tonnes, and 2014 revenues of EUR 73 million. The acquisition of Latgran is expected to increase Graanul Invest’s annual production capacity to approximately 1.8 million tonnes, making it the largest wood pellet producer in Europe. According to Red, “the transaction is certain to be among the largest M&A deals in the Baltic region this year.”

Red acted as legal advisor to Graanul Invest in Estonia and in Latvia in the due diligence of Latgran, and in negotiations leading up to the transaction.

68 Acquisition International - June 2015

Advised Latgran Biofuels

What: We partner with high technology companies to assist in developing intellec-

tual property assets, formulating and executing strategic plans for achieving maximal value for our clients. Our clients have achieved over $1.6 Billion (USD) in market value, either through financing rounds, merger and acquisition, licensing or litigation awards.

To achieve this success, we combine professional and technical skills with level-headed business principles and experience. Or practice is devoted to supporting our client’s intellectual property asset development, commercialization and, when necessary, enforcement.

Planning: The focal point of an intellectual property plan is to secure maximum

value for intellectual property assets. This is achieved by first defining the business objectives to be achieved.

Strategy: Once the IP plan has been identified, a management team, including

business, technology and legal expertise, reviews the business objectives, considers the congruence between the plan and the objectives, then pressure tests the plan against identified opportunities to challenge that the intellectual property assets will achieve those objectives. Being dynamic, the plan will be consistently and constantly assessed, revised, and reassessed as new objectives are identified, new opportunities are presented or new challenges arise.

Who:

Members of the firm have scientific training and regularly work across a spectrum of technologies including pharmaceuticals, medical devices, biotechnology, therapeutics, diagnostics, nanotechnology, organic and inorganic chemistry, biochemistry, materials science, agricultural chemicals, plant breeding, environmental protection systems, semiconductor processing, industrial and medical lasers, computer hardware and software, digital and analog electrical systems, water purification systems, evaporative cooling systems, skin care products, clothing, motor vehicle assemblies and systems, and general mechanical and electrical technologies.

“

We combine professional and technical skills with level-headed business principles and experience.

�

Address: 1480 Techny Road Northbrook, Illinois 60062 Tel: 847-770-6000 Fax: 847-770-6006

info@RosenbaumIP.com www.rosenbaumip.com