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Category Archives: M&A and Private Equity

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PE Firms Must Evaluate Competition Strategy Ahead of Brexit

By Jonathan Parker and Greg Bonné As the UK Competition and Markets Authority (CMA) prepares to assume sole jurisdiction for UK competition reviews post-Brexit, private equity deal teams must evaluate the competitive consequences of deals bridging the Brexit period and update their competition strategy accordingly. What is Changing? The European Commission (EC) currently acts as a … Continue Reading

Private Equity and Blockchain: New Infrastructure or New Asset Class?

By Andrew Moyle and Stuart Davis Growth in applications for blockchain and tokenisation, combined with an increasing number of initial coin offerings (ICOs), mean that buyout firms should note developments in this sector. Why Should PE Be Interested in Blockchain? A shared blockchain ledger could drive a single interface between a PE fund and its investors, … Continue Reading

Debt Portability Can Deliver a Better Exit Valuation — Will US Practice Increase Debt Portability in Europe?

By Dennis Lamont, Charles Armstrong, Jennifer Cadet, Howard Sobel, and Scott Ollivierre Debt portability provisions — reasonably common in high yield lending but historically rare in bank financing — have been recently seen in an increased number of US transactions, as deal terms react to a buoyant financing market. What should deal teams consider when seeking … Continue Reading

Can Private Equity Buyers Be Suitable Purchasers of Divested Assets for Antitrust Regulators?

By Sven Volcker and Tomas Nilsson In the last five years, the European Commission (EC) has required divestitures in more than 70 antitrust cases, requiring merging parties to divest business assets as a condition to receiving regulatory approval. This increasingly interventionist approach from competition regulators presents opportunities for buyout firms to acquire divested assets. However, … Continue Reading

Corporates Reorganise Amid M&A Boom

By Daniel Treloar Last year marked a continuation of strong M&A volumes, with US$3.15 trillion in global transactions according to data provider, Mergermarket. Strong activity, driven by cheap debt and a low growth environment, has continued into Q1 2018, and large deals are expected to be a fixture of the M&A landscape in the year … Continue Reading

MiFID II Research Unbundling 6 Months on – what are we seeing in the market?

The FCA has recently announced that it will begin a review of how firms have implemented the unbundling rules “within weeks”. By Beatrice Lo and Jonathan Ritson-Candler At its recent asset management conference, the FCA announced that it will imminently launch a review of how asset managers have implemented the new MiFID II obligation to … Continue Reading

Deal Teams Can Scheme to Success

By Simon Baskerville and Ed Richardson Schemes of arrangement are a well-known and familiar tool for many within M&A. They are often used to implement acquisitions of public or widely held companies or restructurings of financial indebtedness, frequently as part of an acquisition through a debt-for-equity transaction. What is less well-known is how schemes of … Continue Reading

US Tax Reforms Fuel M&A Activity

By William Lu and Jiyeon Lee-Lim The fundamental US tax reforms brought in this year by the Tax Cuts and Jobs Act (TCJA) have changed the tax landscape for M&A more significantly than any other legislation in the modern era. Businesses and tax advisors will be considering the various opportunities created and threats posed by … Continue Reading

New UK Government Powers Over Smaller Transactions Raising National Security Concerns

Buyers of businesses that produce military or dual-use goods, certain aspects of computing hardware, or quantum technology for supply in the UK should carefully assess the risk of governmental intervention if their targets fall within the scope of the new regime. By Jonathan D. Parker and Calum M. Warren On 11 June 2018, the UK … Continue Reading

Recent Developments in the German W&I Insurance Market

Increased competition among insurers and improved policy terms suggest the German W&I insurance market is becoming more favourable to investors. By Christian Thiele In real estate transactions, buyers and sellers naturally pursue conflicting interests when negotiating a sale and purchase agreement. On the one hand, sellers will strive to achieve the highest possible purchase price, … Continue Reading

Locked Box Lands in the US

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

Is Good Faith a Bad Choice Under English Law?

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

Poised for Next Payments Boom

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

Leaving Germany? Cross-Border Migration of German Real Estate Companies

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

Early Liquidity Rights Create Management Misalignment

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

The Recent Resurgence of Special Purpose Acquisition Companies

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

Increased Flex Amid Record Liquidity in European Leveraged Loans Requires Careful Navigation by PE Firms

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

Group Liability for Data Protection Failure – A New Threat for Private Equity Firms?

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

French Employment and Tax Reforms Set to Boost Private Equity Buyouts

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

CMA Imposes Fixed Penalty on Hungryhouse for Failure to Comply With Information Request

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

Can Overseas Bidders Guard Against M&A Risks in An Increasingly Economically Nationalist Europe?

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

Traditional UK Employment Law Means Gig Economy Transactions Could Be Hard Work For M&A Deal Teams

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

Innovative Insurance Products Address Legal Issues in Public M&A

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
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