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Tag Archives: private equity

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

By Sven Volcker, 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, regulators … 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

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

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

Individual Accountability for PE Executives Continues to Increase Under Legal and Regulatory Changes

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

Economic Nationalism Set to Impact M&A Transaction Approvals Across Europe

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

Early Partial Exits Pose Opportunities and Challenges for Private Equity

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

PRI’s Private Equity Terms Guidance Focuses on Environmental, Social, and Governance (ESG) Factors

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

Private Equity and Privilege: Why Recent Legal Developments Matter to Buyout Firms

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

Selling to China: Four Key Questions All Private Equity Deal Teams Should Ask on an Exit

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

Buyout Firms Must Take Action to Respond to Global Cyber Threats

By Gail Crawford Cybercrime has become a critical issue for buyout firms as hackers are increasingly targeting sensitive business data to profit from insider knowledge. According to a Private Funds Management survey of 91 PE houses, 54% of PE firms said they had been hit with a cyberattack, while 45% said cybersecurity was a high … 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

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
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