By Jason Morelli, Howard Sobel, and Maarten Overmars In the US, unlike in Europe, deals are traditionally transacted on the basis of closing accounts, with adjustments made post-closing for working capital, indebtedness, cash, and transaction expenses. This is now changing. Recent deal activity shows US private equity vendors, having become accustomed to the concept of a locked box in European sales processes, increasingly pivoting … Continue Reading
By Oliver Browne Although there remains no widely accepted definition of good faith under English law, and English law has committed itself to no overriding principle of good faith, English law has developed piecemeal solutions in response to demonstrated problems of unfairness. The variety of these solutions, and the pace with which they are being … Continue Reading
By Christian McDermott In recent years, PE firms have been paying to play in the payment processing sector. From Worldpay and Nets, to Bambora and Paysafe, payment processing companies have proven to be attractive investments for European PE. In our view, a wave of regulation in the FinTech sector will unleash further growth potential, and … Continue Reading
Cross-border migration of German real estate companies is generally possible, however its admissibility must be determined on a case-by-case basis. By Christian Thiele International real estate investors continue to favour German real estate, however, the same does not always apply to German real estate companies. International real estate investors, for instance, often find German capital … Continue Reading
By Thomas Tharakan The average PE hold period is getting longer. According to data provider Preqin, PE firms held on to European assets for an average of 5.65 years in 2017, up from 4.41 years in 2007. Extended hold periods have been driven by a number of factors, including the raising of longer-term PE funds … Continue Reading
By James Inness and Anna Ngo Special purpose acquisition companies, or SPACs, are companies that are incorporated for the purpose of making one or more strategic acquisitions. SPACs are also referred to as “blank check” companies or “cash shells”, which seek to raise capital by listing shares on a stock exchange. Each SPAC has its … Continue Reading
By Chris Kandel The European leveraged loan market is going from strength to strength, with a continuing surplus of available credit compared to deal requirements, resulting in very borrower-favourable terms. However, we are seeing signs of a two-tier market emerging, with strong demand and pricing reductions for deals perceived as stronger credits, alongside an increase … Continue Reading
By Gail Crawford, Hayley Pizzey, Mark Sun, and Calum Warren As European data protection regulators prepare to enforce the General Data Protection Regulation (GDPR) from May 2018, private equity firms must act to minimise the risk of becoming financially liable for the data protection failings of portfolio companies. After a recent spate of high-profile data breaches, … Continue Reading
By Matthias Rubner, Denis Criton, Olivia Rauch-Ravise and Bénédicte Bremond President Macron recently unveiled employment and tax reforms to increase France’s appeal for deal makers. While France ranks highly as an investment destination for private equity firms, complex and inflexible French employment laws have been perceived as a hindrance — perpetuating the belief that France can … Continue Reading
By Jonathan Parker and Anuj Ghai Summary The Competition & Markets Authority (CMA) has imposed a £20,000 fixed penalty on Hungryhouse Holdings Limited (Hungryhouse). The CMA imposed the penalty under Section 110 of the Enterprise Act 2002 (EA02) for failure to comply, without reasonable excuse, with a requirement the CMA issued in a notice pursuant to section … Continue Reading
By Richard Butterwick, Jonathan Parker, Jana Dammann and Katie Campbell Growing economic nationalism is threatening to impact M&A across Europe, as governments and regulators take an increasing interest in “foreign” acquisitions of nationally important companies. Deal teams have previously focused on established national security review regimes, including the Committee on Foreign Investment in the US … Continue Reading
By Gail Crawford, Mark Sun and Katie Campbell Amid a growing number of high-profile corporate data breaches, cybersecurity is now a key issue for strategic acquirers. The hack of Yahoo, which came to light midway through its 2016 takeover by Verizon, resulted in a US$350 million purchase price reduction. The true extent of the hack … Continue Reading
By Sarah Gadd and Katie Campbell Companies operating in the “gig economy”, using a largely self-employed workforce, have enjoyed enormous growth in recent years and have made popular M&A targets. In the UK, these companies have come into conflict with long-established employment law. In our view, current laws are not fully equipped to deal with … Continue Reading
By Richard Butterwick, Stuart Alford and Katie Campbell Dealmakers’ appetite for transactions involving publicly listed companies remains strong — 2016 saw an increase in deal volume, a trend which continues into 2017. However, deals remain challenging, partly due to limitations on bidder deal protections and financing requirements. In response, innovative products have been developed by … Continue Reading
By Oliver Browne, Katie Campbell and Ashleigh Gray Given ongoing competition between buyers in a strong sellers’ market, the resilience of seller break fees as a feature of the European M&A market is surprising. According to the Latham & Watkins 2017 European Private M&A Market Study (which examined over 190 deals signed between July 2015 and … Continue Reading
By Simon Baskerville, David Berman, Farah O’Brien and Alex Hewett Corporate accountability has been a key focus for UK legislators and regulators since the credit crisis, as authorities have taken action against corporate failings. In our view, this focus is evolving to emphasise individual accountability. Developments enacted by the Small Business, Enterprise and Employment Act … Continue Reading
By Catherine Drinnan and Shaun Thompson Corporate carve-outs have become increasingly popular in recent years, as buyout firms scour the market for primary deals. In an environment in which the UK Pensions Regulator (the Regulator) is becoming more active, in our view, private equity buyers must better understand the issues and risks associated with seller … Continue Reading
By Jonathan Parker, Jana Dammann and Doug Abernethy Growing economic nationalism is threatening to impact M&A across Europe, as governments and regulators take an increasing interest in “foreign” acquisitions of nationally important companies in the name of national security. PE deal teams have previously focused on existing national security review regimes, including the Committee on Foreign … Continue Reading
By Thomas Tharakan The exit environment recently ranked as the second greatest challenge facing global PE fund managers, according to Preqin’s H1 2017 Outlook report. As buyout firms weigh an uncertain exit outlook, they are increasingly seeking to de-risk early by selling minority stakes in portfolio investments to preferred LPs. Partial exits to LPs have … Continue Reading
By Jana K. Dammann de Chapto and Joachim Grittmann The German government has tightened the rules for its review proceedings for M&A involving non-EU investors, with changes to its German Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung) that significantly increase foreign investment oversight. The new rules, which came into force on 18 July 2017, introduce a … Continue Reading
By Paul Davies, Michael Green and Ei Nge Htut On 13 July 2017, Principles for Responsible Investment (PRI) launched guidance on incorporating environmental, social, and governance (ESG) provisions in private equity fund terms. The publication, Incorporating Responsible Investment Requirements into Private Equity Fund Terms (the Guidance), followed a year-long consultation period with PRI signatories, expert counsel, … Continue Reading
By Stuart Alford QC, Daniel Smith and Kem Ihenacho Legal professional privilege allows clients to share information with lawyers, knowing it need not be revealed in court. Privilege extends to legal advice generally, and to documents prepared in contemplation of litigation. Privilege has important implications for private equity beyond litigation, and can affect how firms … Continue Reading
By Tom Alabaster and Nick Benson Increasingly complex fund structures and documentation mean that analysing how potential portfolio acquisitions interact with the fund at the top of any deal structure is more important now than ever. Investor Excuse Rights for Environmental, Social, and Corporate Governance (ESG) Compliance As investors focus on ESG compliance, requirements for … Continue Reading
By Frank Sun Chinese acquirers are playing an increasingly important role as buyers of private equity sponsored companies — nearly 200 portfolio companies were sold to Chinese entities in 2016. However, in our view, measures taken by the Chinese government to scrutinise transaction fundamentals more closely and slow capital outflows have impacted deals. The number … Continue Reading
