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Dealwatch: Tech going gangbusters as elite firms line up $40bn SoftBank buyout and Klarna equity raise

Standing out as one of the biggest mandates for external advisers in recent weeks, NVIDIA’s $40bn acquisition of Arm Limited from SoftBank kept transatlantic teams from Latham & Watkins and Morrison & Foerster on their toes in the artificial intelligence arena.

The deal sees California-based tech multinational NVIDIA acquire the Cambridge-headquartered AI company Arm from SoftBank Group and SoftBank Vision Fund in a cash and stock transaction. SoftBank will own a stake in NVIDIA of less than 10%. 

Acting for NVIDIA, the Latham deal team was led by M&A partners Josh Dubofsky and Charles Ruck in Silicon Valley and New York, and a London contingent led by Ed Barnett and Farah O’Brien. San Francisco partner Joshua Holian, Brussels partner Sven Völcker, Washington DC partner Les Carnegie, and London partners David Little and Charles Claypoole advised on regulatory matters.

 MoFo advised SoftBank Group and SoftBank Vision Fund with a team led by Ken Siegel, managing partner of the firm’s Tokyo office; Eric McCrath, San Francisco corporate partner and co-head of the firm’s corporate department; and London corporate partner Gary Brown.

The deal has been described as the first large-scale M&A transaction to be announced in the UK following the Brexit vote in 2016. Ed Barnett told Legal Business: ‘The size of this deal is significant in any market, but particularly in the current market, given that it was negotiated and signed during the continuing Covid lockdown.

‘From a UK perspective, this is a continuation of the journey for Arm from the take-private in 2016 in which SoftBank and the Takeover Panel agreed certain post-offer undertakings [POUs]. It is interesting to appreciate how the panel deals with enforcement of POUs, as well as situations where there is a further transfer of ownership subsequent to a take-private while the undertakings remain in force.’

Fellow partner Farah O’Brien added: ‘If you reflect on what has happened this year in M&A, March and April were quite challenging months. To go from that to getting a deal of this size and importance away, and with most of the team working remotely, is incredibly impressive for all parties. The tech sector is one of the sectors that is consistently resilient. Despite, and in fact because of, the current climate, tech companies are attracting very healthy valuations.’

O’ Brien was also a lead partner acting for Silver Lake on a $650m equity funding round for Klarna, a payments and shopping service, with a post-money valuation of $10.65bn, ranking it as the highest-valued private fintech in Europe and the fourth-highest worldwide.

The funding round was led by Silver Lake, which has more than $60bn in combined assets under management, alongside GIC – Singapore’s sovereign wealth fund – and funds and accounts managed by BlackRock and HMI Capital. O’Brien said of the transaction: ‘As a leading tech investor, the attraction of Silver Lake to a tech company is clear.’

The Latham deal team was also led by New York partner Justin Hamill and also included New York partner Lisa Watts and London partner Sean Finn providing tax advice.

Elsewhere last week, Slaughter and May won a prestigious mandate as it advised Aviva on the S$2.7bn (£1.6bn) sale of a majority shareholding in Aviva Singapore to a consortium led by Singapore Life (Singlife).  When it closes, the deal will comprise S$2bn (£1.2bn) in cash and marketable cash instruments, S$25m (£14m) in vendor finance notes and a 25% shareholding in the new combined group.

The Singlife consortium includes private equity giant TPG, which will become the largest shareholder in the new group, which will also be owned by Japanese insurer Sumitomo Life and other existing Singlife shareholders. The transaction is subject to customary closing conditions, including regulatory approval.

Slaughter and May, led by corporate partners Richard Smith and Claire Jackson, advised Aviva along with an in-house team led by Neil Harrison (group general counsel – Digital & Asia). Allen & Gledhill is advising on Singapore law aspects of the transactions and Latham in Hong Kong/Singapore advised the consortium buyers led by TPG.

Richard Smith, who has acted for Aviva throughout his time as a partner at Slaughters, noted that this transaction is part of Aviva’s broader strategy to have a greater focus on its core businesses in the UK, Ireland and Canada. ‘We advised on Aviva’s disposals in Hong Kong and Indonesia. This is the latest such deal and the first since Amanda Blanc took over as Aviva’s new CEO. This deal is considerably more complex as it’s a disposal although Aviva is retaining a 25% stake; it’s a merger with Singlife and is also effectively a JV with TPG.’

He added that, in spite of the deal being struck during July and August through working remotely and in multiple time zones, it was quite an efficient process.

Meanwhile, Kirkland & Ellis is acting for BC Partners on a possible offer by GardaWorld, the security services company in which the private equity shop owns a 51% stake, for G4S. G4S specialises in the provision of security services and solutions, is present in around 85 countries and has around 533,000 employees.

The Kirkland team is led by corporate partners David Higgins and Tom Bartram and also includes investment funds partner Andy Shore. Ben Spiers at Simpson, Thacher & Bartlett is acting for GardaWorld.

Elsewhere, Herbert Smith Freehills has advised longstanding client, UK oil and gas multinational BP, on its move into offshore wind for the first time with a strategic partnership with wind farm operator Equinor. The deal will see BP acquire a 50% stake in Equinor’s US Empire Wind and Beacon Wind assets for $1.1bn, with Quinor remaining as the operator.

Empire Wind is located offshore New York, with a total area of 80,000 acres and is expected to have an installed capacity of 2GW, while Beacon Wind is located offshore Massachusetts with a total area of 128,000 acres and an expected installed capacity of 2.4GW. Subject to customary regulatory and other approvals, the deal is expected to close in early 2021.

The Herbert Smith team was led by corporate partners Sarah Pollock, Laura Hulett and Silke Goldberg, alongside advisers from Morgan Lewis & Bockius in the US. CMS Cameron McKenna Nabarro Olswang and Bracewell advised Equinor.

Pollock commented: ‘Energy transition is a core part of our practice, using our extensive experience in renewable and upstream transactions. We look forward to working with BP and others to move towards net zero.’