Legal Business

Dealwatch: Kirkland and CMS drink in $3bn pub group takeover as Slaughters and Latham analyse Moody’s disposal

Dealwatch: Kirkland and CMS drink in $3bn pub group takeover as Slaughters and Latham analyse Moody’s disposal

In the customary rush to get deals over the line before the summer lull, the City and US elite have this week lined up on big-ticket transactions including the sale of Moody’s Analytics to Equistone and Slug & Lettuce owner Stonegate’s $3bn acquisition of pub company Ei Group (EIG).

Kirkland & Ellis fielded a team led by corporate partners David Holdsworth and Stuart Boyd to advise buyer Stonegate as it acquired EIG, the largest owner of pubs in the UK. Stonegate, which was formed when funds managed by private equity group TDR acquired 333 managed pubs from Mitchells & Butler, also owns high street brands including Walkabout and Yates.

CMS advised EIG with a team led by partners Gary Green and Gordon Anton. An Ashurst team led by M&A partner Tom Mercer advised Nomura International, Goldman Sachs International and Barclays, the buyer’s financial advisers, on the recommended cash offer.

Meanwhile, Slaughter and May advised longstanding client Moody’s on the sale of its Moody’s Analytics Knowledge Services (MAKS) business to Equistone Partners Europe Limited, a deal which is expected to close later this year.

Latham & Watkins acted for Equistone on the deal, with a team led by London corporate partner David Walker and including London finance partner Charles Armstrong.

Co-head of Slaughters’ infrastructure group, Michael Corbett, told Legal Business: ‘It’s a significant reflection of Moody’s evolving strategic priorities. They’re in the business of producing high value analytical services to their customers, and the so-called knowledge services that’s been disposed of was non-call for Moody’s activities. It was consistent with a strategic repositioning. It was significant because it’s a global business with a multitude of jurisdictions involved and that always creates some complexity in a context of a carve-out business disposal.’

He added that M&A has shown decent levels of activity in spite of the effect the current political uncertainty has had on sterling.

‘A lot of the work we do has a cross-border element and frankly a majority of the work we do is not necessarily domestic UK, but overseas assets and global businesses,’ said Corbett.

MAKS provides outsourced research and analytical support to banks, asset managers and consulting firms through delivery centres in India, Costa Rica, Sri Lanka and China. The sale proceeds and repatriated offshore cash will be used to repurchase around $300m of Moody’s outstanding stock.

Freshfields Bruckhaus Deringer and Addleshaw Goddard also this week landed lead mandates as the European arm of Australia’s Macquarie Group acquired British telecoms company KCOM in a £627 million cash-only deal.

Freshfields advised (MEIF) Macquarie European Infrastructure Fund 6 with a team led by corporate and M&A partners Stephen Hewes and Andrew Hutchings.

Addleshaw’s corporate partner Richard Lee and employment partner Jonathan Fletcher Rogers led the team advising KCOM group which operate in Hull, Yorkshire.

Finally, Linklaters’ partner Richard Coar led a team advising SSE Renewables, Copenhagen Infrastructure Partners and Red Rock Power on the refinancing of the 588MW Beatrice offshore wind farm off the coast of Scotland. The firm said the deal shows a strong need for offshore wind assets established by an experienced sponsor group. Norton Rose Fulbright advised a consortium of 29 commercial and institutional lenders and 24 hedging banks in the deal, led by the firm’s head of energy, infrastructure and natural resources in London, Rob Marsh.

muna.abdi@legalease.co.uk

Legal Business

‘Necessary bandwidth’: Addleshaws lures deal finance veteran from McDermott

‘Necessary bandwidth’: Addleshaws lures deal finance veteran from McDermott

Amid a quiet month for the lateral recruitment market in London, Addleshaw Goddard made the most significant play, bolstering its City banking practice with the hire of leveraged finance partner Peter Crichton from US firm McDermott Will & Emery. Well known in the deal community, Crichton joins Addleshaws’ active mid-market practice led by Alex Dumphy.

Crichton’s career as an acquisition finance lawyer saw him act for AIB, HSBC, The Royal Bank of Scotland and Santander on Caledonia’s acquisition of the drinks business Liberation Group in 2016 and AIB, HSBC and Santander on the refinancing of the Jockey Club. He has spent around 16 years advising on the debtor side of the loan markets and specialising in leveraged finance, becoming partner at DLA Piper and CMS Cameron McKenna Nabarro Olswang before joining McDermott before the three-way merger took effect in 2017.

Legal Business

Addleshaws enters continental Europe through BCLP Hamburg hires

Addleshaws enters continental Europe through BCLP Hamburg hires

Despite having launched five international offices in Asia and the Middle East since 2012, top-20 UK law firm Addleshaw Goddard had no presence in continental Europe until last month. That was when it announced the hire of five partners from Bryan Cave Leighton Paisner (BCLP) to spearhead a launch in Hamburg.

The hires include the two founders of legacy Bryan Cave’s German offices in 2007, Eckart Budelmann and Michael Leue. Partners Martin Lüderitz, Maximilian Karacz and Hubertus Schröder joined the duo in the move from BCLP, alongside five other lawyers.

Legal Business

Addleshaws launches first European base in Hamburg with five-partner BCLP hire

Addleshaws launches first European base in Hamburg with five-partner BCLP hire

Addleshaw Goddard will open its first continental European office in Hamburg with the hire of a five-partner team from Bryan Cave Leighton Paisner (BCLP).

Addleshaws said today (8 May) it will open its sixth office outside the UK next month, with five lawyers joining partners Exkart Budelmann, Michael Leue, Martin Lüderitz, Maximilian Karacz and Hubertus Schröder in the move from BCLP.

Budelmann and Leue founded the legacy Bryan Cave offices in Germany in 2007, with Leue serving as managing partner in Germany. Addleshaws’ Hamburg office will focus on M&A and private equity, commercial, employment, international trade and litigation advice.

The UK top-20 law firm has long been interested in the German market, with merger talks between Addleshaws and German firm Luther called off in mid-2017. Last year, Addleshaws managing partner John Joyce told Legal Business the firm wanted to expand in any possible way and in any possible location following a sustained period of growth and the early signs of a successful Scottish merger with HBJ Gateley.

Of the Hamburg opening, Joyce commented: ‘Germany is one of the world’s largest importers and exporters and the opening of an office there is a decisive first step in our plans for continental Europe, which in due course may involve other European jurisdictions given the strong preference by many businesses for a fully integrated service.’

Leue said: ‘Today’s announcement has all the key ingredients for clients in Europe, the USA and further afield who will be attracted by the advantages of working with a competent and growing European business rooted in the German market with strong links into the City of London. We are excited about joining Addleshaw Goddard and the possibilities to leverage our local expertise on a global scale.’

A BCLP spokesperson commented: ‘Germany is a core part of our firm, where we have more than 45 lawyers who work across three offices, Berlin, Frankfurt and Hamburg, and with the rest of our firm to provide our clients with an efficient and high quality service.’

They added: ‘Roland Fabian, country managing partner for Germany, will continue to lead our offices there and oversee our strategic plans in the country, where we have grown rapidly in the last five years. We are sorry that two of our corporate partners based in Hamburg, Eckart Budelmann and Michael Leue, will be leaving us to start a new office elsewhere, and we wish them well.’

Hamburg follows openings in Singapore, Dubai, Oman, Qatar and Hong Kong for Addleshaws since 2012. Last year, the firm turned to Bryan Cave’s merger partner, Bryan Leighton Paisner, for the hire of that firm’s then-Asia head, Bob Charlton, with Addleshaws looking to triple the size of its Asia capability to at least 12 partners.

Revenue for the 2016/17 financial year was up 23% to £242m from £197m, while profit increased 36% to £87m. Since 2012/13, Addleshaws’ revenue has increased 45%, while profit is up 68% over that same period. The financial results were bolstered by the inclusion of its Scottish merger with HBJ Gateley – a £20m firm which formally combined with Addleshaws on 1 June 2017 – but also includes organic growth, with England up 11%, Scotland 9% and the foreign exchange-impacted international arm 7%.

hamish.mcnicol@legalbusiness.co.uk

Legal Business

Kerr to hit 26 years at 2Birds’ helm as Addleshaws re-appoints Penney as senior partner

Kerr to hit 26 years at 2Birds’ helm as Addleshaws re-appoints Penney as senior partner

Bird & Bird’s long-standing chief executive David Kerr (pictured) is set to lead the firm until 2022 after standing unopposed in the firm’s latest election.

Addleshaw Goddard will also stick to its leadership after Charles Penney saw off a challenge by the firm’s employment group head Michael Leftley to secure a second term as senior partner.

Already one of the longest standing leaders ever of a City law firm, Kerr first took the helm of 2Birds in 1996 and oversaw its growth from 70 lawyers in three offices to over 1,300 across 29.

Kerr told Legal Business: ‘No-one can be in a job forever. My role is about making sure we have sufficient depth in our leadership groups so that partners have a wide choice when I do step down. My appointment is not really about me: it’s about building up the leadership team within the firm.’

He added: ‘The governance processes we have are very clear: there are lots of opportunities for contested processes if people want that. The partnership clearly didn’t want that this time around.’

The firm has grown turnover for 27 consecutive years off the back of its international expansion, hitting €382.3m in 2017/18.

The latest steps in the firm’s growth saw it open its first US outpost in San Francisco and sign a co-operation agreement with Chinese firm AllBright Law Offices, as well as adding the Budapest office of Weil Gotshal & Manges.

‘We have done a big strategic push in the US and China over the last couple of years and we want to continue that.’

While he stood unopposed this time around, Kerr ran against long-standing partner and head of IT consultancy Baseline Dominic Cook in 2016.

Although Kerr won that election, less than half of the partnership voted for him three years ago as almost 30% of partners abstained while Cook received around a third of the vote. Cook left the firm in August that year.

Meanwhile, corporate lawyer Penney’s second term as Addleshaws’ senior partner will start in May and run until April 2023.

A former secretary of the UK Takeover Panel, Penney joined the firm in 2005 from legacy Lovells (now Hogan Lovells). His client work focuses on public takeovers, IPOs and joint ventures.

He first took over from former senior partner Monica Burch in May 2016.

marco.cillario@legalease.co.uk

Legal Business

Deal watch: Busy year-end as Japanese group buys Swiss power grid and Malaysian funds invest in Battersea

Deal watch: Busy year-end as Japanese group buys Swiss power grid and Malaysian funds invest in Battersea

City deal teams are having a busy run-up to Christmas, with Baker McKenzie, Freshfields Bruckhaus Deringer, Addleshaw Goddard and Linklaters leading on two multibillion-dollar deals.

Bakers’ London private equity head David Allen and corporate partner Jannan Crozier led a team advising Hitachi as the Japanese conglomerate acquired 80.1% of Swiss giant ABB’s power grid division for around $6.4bn.

Hitachi’s largest ever acquisition, with an enterprise value of $11bn including net debt, saw Freshfields’ M&A partners Piers Prichard Jones and Stephen Hewes advise ABB, which will retain control of 19.9% of a business spread across more than 100 countries and employing over 130,000 people.

‘The impact of this deal will be felt for generations to come,’ Crozier told Legal Business, pointing to the ability of the Japanese group to combine its technology with the infrastructure acquired from ABB and bring energy to areas of the world where it is more difficult to get to. ‘They will be able to revolutionise the way power is brought to consumers.’

Swiss firm Homburger’s M&A partners Claude Lambert and David Oser also acted for ABB, which is looking to simplify its business structure and focus on automation technology.

The Swiss group is able to require Hitachi to buy the remaining 19.9% of the power grid business in three years’ time. Under a so called ‘put and call’ provision, Hitachi will also be able to require ABB to sell its remaining stake in the business.

‘In the short term we will provide the maximum stability to the company through this joint venture, but in three years’ time we will have the flexibility to do that,’ Crozier said. The Bakers team was supported by Tokyo partners Akifusa Takada and Yutaka Kimura.

The acquisition caps off a busy 2018 for Bakers, which was active on numerous large deals over the last few months. Earlier in December the firm acted for Unilever on its £3.1bn acquisition of malted drink brand Horlicks from GlaxoSmithKline.

Elsewhere, the redevelopment of Battersea Power Station in London provided rich pickings for a trio of City firms as Malaysia’s asset manager Permodalan Nasional Berhad and state pension fund The Employees Provident Fund took a £1.6bn stake in the £9bn project.

Addleshaws’ real estate partner Simon Tager led the team acting for Battersea Power Station Development Company on the sale of the commercial assets of phase two of the project, including a six-acre site hosting the former coal power station on the south bank of the river Thames. Addleshaws’ Leona Ahmed, Luke Harvey, Hugh Lauritsen and Lee Sheldon also worked on the deal, while the buyers instructed Linklaters’ real estate partner Patrick Plant.

Phase two, which will include Apple’s new UK headquarters, is due to complete by the end of 2020.

marco.cillario@legalease.co.uk

Legal Business

Life during law: Leona Ahmed

Life during law: Leona Ahmed

My dad was born in Kashmir and was in the Pakistani Air Force, posted to Turkey. India and Pakistan were separating and he decided he wouldn’t go back. He moved to the UK and met my mum at night school. She worked in a biscuit factory when I was a kid and was all about, ‘You’re going to do better than this.’

I didn’t start working life as a lawyer. I’m Asian and started in retail – freshly-squeezed orange juice and health food products. My dad wasn’t impressed. He was first generation here and said: ‘This is a fantastic country with great opportunities, I did not come here for you to be another Asian shopkeeper.’

Legal Business

Deal watch: Bakers and Slaughters drink in £3.1bn Horlicks acquisition as AJ Bell IPO yields dividends for Pinsents and Addleshaws

Deal watch: Bakers and Slaughters drink in £3.1bn Horlicks acquisition as AJ Bell IPO yields dividends for Pinsents and Addleshaws

As the market hunkers down for the festive season, GlaxoSmithKline’s (GSK) £3.1bn sale to Unilever of Horlicks has warmed the cockles of City teams from Baker McKenzie and Slaughter and May, while Pinsent Masons and Addleshaw Goddard have won key mandates on what is likely the year’s last big London listing.

The GSK deal sees it sell its malted drink brand Horlicks and other consumer healthcare nutrition brands to Unilever and includes the merger of listed GSK Consumer Healthcare India with Hindustan Unilever. GSK will also sell its 82% stake in GlaxoSmithKline Bangladesh in the deal, which is slated to complete by the end of next year.

Bakers stepped up for long-standing client Unilever on the deal, with a London team led by corporate partner David Scott alongside partners Steve Holmes, Sue McLean and Michelle Blunt, who advised on the IP and tech aspects of the deal, as well as tax partner Alistair Craig.

Indian firm Cyril Amarchand Mangaldas advised Unilever on Indian law, while Slaughter and May, with a team including partners David Johnson, Simon Nicholls and Christian Boney, acted for GSK.

Last year, Bakers advised Unilever on its acquisition of the personal care and homecare brands of Quala, the Latin American consumer goods company, as well as it joint venture with Europe & Asia Commercial Company in Myanmar.

Scott told Legal Business: ‘It was a pleasure to partner again with our great client, Unilever, and our friends at Cyril Amarchand Mangaldas, on this terrific acquisition, including an iconic brand such as Horlicks.’

Meanwhile, Slaughters earlier this year advised repeat client GSK on its $13bn acquisition of Novartis’ 36.5% stake in their consumer healthcare joint venture.

In other news, Pinsents secured a notable win to advise Manchester-headquartered AJ Bell, one of the largest UK investment platform providers, on a proposed listing on the London Stock Exchange which could raise up to £675m.

The price range for the offer has been set at £1.54 to £1.66 per ordinary share, implying a market capitalisation on admission of between £626m and £675m.

Pinsents corporate partner Julian Stanier led the team advising the company, which is also offering customers the opportunity to apply for shares via the AJ Bell website.

Stanier told Legal Business the IPO is slated to be the last big London listing of 2018 after what has been a choppy year for the capital markets.

‘It’s the same with all companies looking to list. If there is a growth story and strong management team, investors will back it, and we are confident that will be the case with AJ Bell.’

Stanier points to the customer offer alongside the institutional offer as being a point of interest.

He added: ‘The quasi-retail element is not the most common, although it has appeared before, such as in Ocado’s 2010 IPO. What’s interesting is that the whole customer offer can be done completely through AJ Bell’s website.’

Shares are due to be admitted on 12 December.

Addleshaws, meanwhile is advising Numis as sponsor, financial adviser, sole bookrunner and broker to AJ Bell on the float, led by partners Giles Distin in London and Richard Lee in Manchester.

The firm pointed to other notable listings it has worked on in the last two years, including the IPOs of Mind Gym, Sumo Digital, The City Pub Company and Ramsdens.

Distin commented: ‘Whilst UK IPO activity has generally been more muted this year, partly due to volatile market conditions and fears around Brexit, several sizeable and successful businesses have managed to complete a flotation. Like Numis, which has remained very active in the IPO market this year, we’re pleased to have been busy throughout 2018 advising on IPOs and other equity capital markets work.’

nathalie.tidman@legalease.co.uk

Legal Business

Addleshaws’ appetite for expansion grows amid strong 23% lift in revenue

Addleshaws’ appetite for expansion grows amid strong 23% lift in revenue

Addleshaw Goddard wants to expand in any possible way and in any possible place following a sustained period of growth and the early signs of a successful Scottish merger.

The firm’s revenue for the 2016/17 financial year was up 23% to £242m from £197m, while profit increased 36% to £87m. Since 2012/13, Addleshaws’ revenue has increased 45%, while profit is up 68% over that same period. Its cash position has also improved £65m in that time, to have reserves of £34m.

This year’s financial results are inevitably bolstered by the inclusion of its Scottish merger with HBJ Gateley – a £20m firm which formally combined with Addleshaws on 1 June last year – but also includes organic growth, with England up 11%, Scotland 9% and the foreign exchange-impacted international arm 7%.

Addleshaws managing partner John Joyce told Legal Business the Scottish merger had bedded in fantastically well, increasing work across the firm: ‘I knew the amount of work that we were losing because we weren’t in Scotland, we could see every other week there was something missing for us there.’

The firm has been seeking mergers in other jurisdictions, with talks in Germany called off last June, as well as reports of US merger interest a year earlier.

Addleshaws chief financial officer Colin Brown said the firm’s growth over recent years, as well as the ‘very real example’ of the value driven by the Scottish merger, meant it had the appetite to do more.

Joyce commented: ‘We absolutely want to carry on expanding in any possible way that we can, in any possible place that we can. But we’re quite sensitive about what we want to do. We want to make sure that whatever we do, we do for the right reasons, but the ambition to do something is absolutely there.’

The firm has been active in the lateral hire market over the past year or so, adding 30 partners across England, Scotland, Asia, and in the Gulf region. Key hires include legacy Berwin Leighton Paisner’s (BLP) former Asia head Bob Charlton, as well as a six partner real estate team from Irwin Mitchell in Manchester.

Corporate and infrastructure were identified as targeted areas for growth, with Joyce saying the firm wanted to move up market to take work from Magic Circle firms. He pointed to highlight mandates including advising betting company GVC Holdings on its £3.9bn takeover of rival Ladbrokes Coral, as well as Lloyds Bank on its £1.9bn buyout of credit card provider MBNA as evidence of this ambition.

The retail and consumer sector grew 37% at Addleshaws, while real estate grew 23%. A key mandate in real estate was advising the Chinese government in acquiring its new Chinese Embassy in London, a client Joyce said the firm never would have had 10 years ago.

Addleshaws had set a 2017/18 revenue target of £250m a few years ago, which Joyce described as a ‘really ambitious target’ he could live with missing given the firm had bettered its profit target. He said the market outlook was unclear, but the firm wanted to continue to grow materially.

‘The market’s not bad, but I can’t describe it as a buoyant, flying market. Obviously, the question is when is Brexit going to do something? At some point something will happen and if confidence goes then that’s a challenge.’

hamish.mcnicol@legalbusiness.co.uk

Legal Business

White & Case makes another City litigation play with Addleshaw Goddard hire

White & Case makes another City litigation play with Addleshaw Goddard hire

Expansive US firm White & Case is continuing to walk the talk on its going ‘toe to toe with the Magic Circle’ mantra after making another City hire in its litigation practice.

The experienced Chris Brennan is joining White & Case from Addleshaw Goddard, where he headed the firm’s Financial Conduct Authority (FCA) investigations and enforcement team and was a partner since 2012. Before that he was head of regulatory at Lloyds Banking Group, general counsel for a global inter-dealer broker and a senior lawyer in the FCA’s enforcement arm.

Brennan is White & Case’s second City litigation lateral hire this year, following the recent recruitment of well-regarded tax litigator Hannah Field-Lowes from Weil, Gotshal & Manges. Brennan joins the firm from next week (4 June).

White & Case partner and EMEA disputes head Charles Balmain told Legal Business: ‘Chris’ hire fits squarely with the firm’s 2020 strategy, an important part of which is to strengthen the firm’s disputes practice in London and across the region. It’s another example of our aim to go toe to toe with the Magic Circle.’

The firm has made five lateral hires in the City this year. Its 2020 strategy, which former London executive Oliver Brettle recently shifted his full attention to after stepping down as London head, is about profitable growth in London with a focus on the global financial institutions industry and in disputes.

An Addleshaws spokesperson said: ‘Chris leaves with our best wishes.  Contentious regulatory work continues to be a key area for investment and our market leading global investigations team, led by Nichola Peters, goes from strength to strength servicing our deep client base.’

Brennan’s departure from Addleshaws follows a spate of hiring at the firm in early 2018, most recently expanding its Asia practice with the hire of Bob Charlton from legacy BLP.

White & Case’s hiring spree, meanwhile, was recently tempered by the departure of highly-rated regulatory lawyer James Greig, who left after just two years for a senior in-house role at banking giant Barclays.

For more on White & Case’s city ambitions read ‘Reborn supremacy – inside the unlikely White & Case revolution.

thomas.alan@legalease.co.uk