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Category Archives: M&A and Private Equity

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Changes to Corporate Criminality Offences in the UK Cause Corporate Dealmakers to Review Acquisitions

By Stuart Alford QC, Daniel Smith Proposed changes to corporate criminal offending should cause corporate dealmakers to review the scope of acquisition diligence, particularly in light of the UK Serious Fraud Office’s (SFO’s) increasing use of deferred prosecution agreements (DPAs), as highlighted by the recent Rolls Royce and Tesco cases. Expected Expansion of Corporate Liability … Continue Reading

Warranty and Indemnity Insurance: Practical Pointers

By Nick Cline, Dan Treloar, Katie Campbell Warranty and Indemnity (W&I) insurance, which seeks to bridge the gap between a buyer’s wish for deal protection and a seller’s desire for a clean exit, has become a common product in European M&A transactions. In our view, there is real value in having a thorough understanding of … Continue Reading

Chinese Outbound M&A: 4 Key Questions

By Richard Butterwick, Cathy Yeung, Yilong Du, Karima Salway Overseas direct investment by Chinese companies increased significantly in 2016 to US$212 billion, a 143% increase from 2015. While outbound M&A interest remains strong in China, recent measures taken by the Chinese government to scrutinise transaction fundamentals more closely and slow capital outflows may impact deals … Continue Reading

M&A Deal Terms in 2017: What Can Deal Teams Expect?

By Nick Cline, Robbie McLaren, Katie Campbell Britain’s decision to leave the European Union in June 2016, coupled with the election of Donald Trump as US president in November 2016, gave dealmakers plenty of pause for thought last year – but ultimately did little to derail strategic M&A. Encouraged by the post-Brexit decline in the … Continue Reading

Buy and Build Strategy Increases Antitrust Risk for Private Equity

By Sophia Stephanou, Luca Crocco and Hector Armengod Private equity firms have sought a greater number of buy and build opportunities in recent years, amid high valuations and competition for primary deals. In our view such deals carry higher antitrust risks and warrant careful consideration of antitrust issues by both private equity teams and portfolio … Continue Reading

Traditional UK Employment Law Means Gig Economy Could Be Hard Work for Private Equity

By Sarah Gadd Companies that operate in the “gig economy”, using a largely self-employed workforce, have enjoyed enormous growth in recent years but in the UK, these companies have come into conflict with long-established UK employment law. In our view, current laws are not fully equipped to deal with new staffing models in which staff … Continue Reading

Will New Spanish Dividend Rules Cause Pain for Private Equity in Spain?

By Ignacio Dominguez Recently effected reforms to Spanish dividend protections for minority shareholders should cause European dealmakers to review deal terms more closely in 2017. Outright acquisition of businesses is unusual in Spain, 83% of Spanish private equity transactions completed since January 2016 involve the acquisition of less than 100% of the target. In our … Continue Reading

Prosecuting Corporate Offending – A New Approach from the Serious Fraud Office

By Stuart Alford QC and Daniel Smith Deferred prosecution agreements (DPAs) became part of the prosecutors’ toolbox in 2014, allowing for settlement instead of bringing a case to trial. Recent statements from the Serious Fraud Office (SFO) indicate an increasing willingness to seek DPAs. The SFO has concluded two DPAs so far, and we expect … Continue Reading

Warranty and Indemnity Insurance – Is the Silver Bullet Beginning to Tarnish?

By Neil Campbell and Leif Schrader Warranty and indemnity (W&I) insurance products have been marketed as a “silver bullet,” which can bridge the gap between a buyer’s wish to receive proper deal protection and a seller’s aim of a clean exit. However, as the market continues to mature, insurers are becoming cautious and terms are … Continue Reading

Sustainable Investment and ESG Compliance ─ Emerging Litigation

By Sophie Lamb and Paul Davies There is an increasing desire amongst PE firms to publicise value creation through the use of bespoke metrics to measure improvements and value derived from (ESG) policies including improved reputational risk management; better and more transparent governance; better health, environmental and safety standards; heightened efficiency; less disruption as a … Continue Reading

French Civil Code Reform Sparks Quiet Revolution in Management

By Benedicte Bremond and Gaetan Gianasso Since the era of Napoleon Bonaparte, French contract law has largely been governed by the same Civil Code. This year has seen a quiet revolution in the French legal system, bringing about modernisations that will improve the investment environment for buyout firms, particularly as relates to management equity. In … Continue Reading

New UK Foreign Investment Controls May Restrict PE Deals

By John Colahan As part of UK Prime Minister Theresa May’s new industrial strategy, private equity deal teams should expect a more interventionist approach to the acquisition of strategically important UK businesses by foreign buyers. The UK government has signaled its intention of creating a “proper industrial strategy”, making it capable of stepping in when … Continue Reading

Know Your Code: Open Source Usage Can Close Software Commercialisation Prospects for Tech Targets

By Deborah Kirk Buyout firms spent more than $39.38bn acquiring technology businesses in H1 2016, accounting for 28% of all global deal value and making technology the preferred sector for investment during the period. With investment flooding into tech, private equity is facing competition and increasingly high deal valuations. Tech companies pose unique diligence issues … Continue Reading

Return of the MAC – Material Adverse Change Clauses Making a Comeback in Oil and Gas Deals

By Simon Tysoe For many years, US and UK M&A practices have differed in their use of material adverse change clauses (MACs) in sale and purchase documents. Common, even ubiquitous in the US, these clauses, which permit a buyer to refuse to close upon the occurrence of events detrimental to the target, remain a rarity … Continue Reading

New EU Data Protection Rules Move the M&A Goalposts

By Gail Crawford After over four years of debate, the General Data Protection Regulation (GDPR) recently came into force, taking effect after a two year transition period, i.e. from 25 May 2018. The GDPR introduces a rigorous and far-reaching privacy framework, which will impact many M&A transactions. The GDPR sets out defined obligations and substantial … Continue Reading

Jury out on Gender Pay Reporting Regime

By Kendall Burnett and Sarah Gadd There is mixed opinion on the UK’s forthcoming gender pay reporting regime. Whether the new reporting obligations will help eradicate the UK gender pay gap (reported by the Office of National Statistics to be 19.2% in 2015) or fuel an increase in equal pay discrimination claims in the private … Continue Reading

PE Set To Benefit From More Outward Looking Chinese Buyers

By Amy Beckingham In recent years, Chinese companies have become increasingly bold in the search for new deals, looking beyond the country’s borders for transformational takeovers. This year already, we have seen the largest ever outbound deal attempted by a Chinese company, with ChemChina’s $43billon bid for Swiss agribusiness Syngenta. As China becomes more relaxed … Continue Reading

CMA Taking Increasingly Intrusive Approach To Monitoring UK Deals

By Jonathan Parker Since its launch in April 2014, the Competition and Markets Authority (CMA) has played a crucial role in determining the outcome of some of the UK’s headline deals. Last year alone, the CMA scrutinised over 60 deals including Poundland’s takeover of 99p Stores, and ran the rule over bookmaker Ladbrokes’ takeover of … Continue Reading

Israel’s Anti-Concentration Law Presents Unique PE Opportunity

By Joshua Kiernan In December 2013, Israel introduced new legislation — the Law for the Promotion of Competition and Reduction of Concentration — designed to break the dominance of large corporations and strengthen competition in the country’s economy. This “anti-concentration law” will soon come into effect, heralding a huge shake-up in the country. Many of Israel’s … Continue Reading

Pension Fund Health-Check Required

By Catherine Drinnan and Shaun Thompson The recent furore over the collapse of high street retailer BHS has caused fierce debate over whether companies, or their ultimate owners, are responsible for the upkeep of a pension plan. For private equity, the debate has important implications. In the US, pensions have also been hitting the headlines. … Continue Reading

Private Equity Goes Green

By Paul Davies and Michael Green In December 2015, world leaders met to negotiate the Paris Agreement. Setting aside whether the Paris Agreement goes too far, not far enough or is just right, one cannot dispute that government commitments to limit an increase in the global average temperature to well below two degrees Celsius will … Continue Reading

Tough Exams for Investments in the Education Sector

By Tom Evans and Matthew Bedrossian The growth of private spending on education presents an opportunity for private equity. While public spending on education in the OECD as a proportion of gross domestic product decreased slightly between 2003 and 2012, the number of students attending private secondary institutions in the OECD rose from 11.07% to … Continue Reading
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