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

Change was necessary: Ashurst joins the war for talent with 9% NQ pay raise

Change was necessary: Ashurst joins the war for talent with 9% NQ pay raise

City stalwart Ashurst has followed suit with peers in the Square Mile to raise the salary for newly-qualified solicitors (NQs), upping the ante to £105,000 including bonuses.

The move will mean a 9% pay increase for NQs, who were previously in line for maximum remuneration of £96,600, effective from the 2020 financial year.

Ashurst London managing partner Ruth Harris (pictured) said: ‘Following a very successful year, we have continued to review our remuneration in order to remain as competitive as possible. We believe a change was necessary and the adjustments will ensure that we continue to attract and retain the best staff.’

The hike is the latest in a spate across the City, started in May by Freshfields Bruckhaus Deringer in a bid to tackle head-on the longstanding war on talent with US rivals in London. It raised its NQ salary by £15,000 to £100,000 plus discretionary bonuses, paving the way for similar moves from the rest of the Magic Circle and other competing firms.

Clifford Chance (CC) followed a month later with £100,000 including bonus, a package matched by Slaughter and May the following week. Allen & Overy then set the same rate, matched by Linklaters earlier this month.

Beyond the Magic Circle, Travers Smith this week increased its NQ salaries by 8% to £85,000 after Macfarlanes added 6% to its base pay to reach £85,000.

Ashurst has seen a remarkable reversal over the last three years under the leadership of global managing partner Paul Jenkins who, on Tuesday (9 July), said the firm was aiming to reach profit per equity partner (PEP) of £1m in the next financial year.

After three consecutive years of growth, Ashurst added £77m to its top line to hit £641m for the year to 30 April 2019, a significant 14% increase on the £564m turnover of last year.PEP soared a market-leading 31% to £972,000 from last year’s £743,000.

The results were especially striking given the firm’s financial struggles after its 2013 merger with Australia’s Blake Dawson. Jenkins’ tenure as global managing partner since 2016 has seen a strong 27% uptick in revenue and a 61% hike in PEP from £603,000 in what was a disastrous 2015/16 financial year.

To read more on Ashurst’s unlikely rebound, see Inflection point (£) 

nathalie.tidman@legalease.co.uk

Legal Business

Ashurst set to reach £1m PEP target after 31% surge as revenue tops £641m

Ashurst set to reach £1m PEP target after 31% surge as revenue tops £641m

Paul Jenkins, Ashurst’s indomitable managing partner, is aiming to reach profit per equity partner (PEP) of £1m in the next financial year as the City stalwart unveils its best financial results to date.

On the back of three consecutive years of growth, the firm added £77m to its top line to hit £641m for the year to 30 April 2019, a significant 14% increase on the £564m turnover of last year.

PEP has also soared 31% to £972,000 from last year’s £743,000, putting Ashurst within sight of its stated intention of smashing the £1m PEP barrier in the next financial year.

The results are a remarkable reversal of fortune for a firm which struggled financially after its 2013 merger with Australia’s Blake Dawson. Jenkins’ (pictured) tenure as global managing partner since 2016 has coincided with consistent growth, with a three-year view showing a strong 27% uptick in revenue and a market-leading 61% hike in PEP from £603,000 in what was a disastrous 2015/16 financial year.

Jenkins, who has been widely credited for driving a high performance culture at the firm, attributed much of Ashurst’s rebound to sticking with the strategy of investing in the five key sectors of banks and funds, energy and resources, real estate, infrastructure and digital economy.

He told Legal Business that each of the firm’s regions outperformed in 2018/19, with double-digit revenue growth in the corporate, finance, funds and restructuring and dispute resolution practices and above 20% revenue growth in projects and real estate. Revenue in Hong Kong and mainland China grew above 20%, Continental Europe performed strongly, and turnover in the Middle East grew by 40%, driven by a focus on infrastructure, energy and resources.

‘The over-riding message is that I want to not just sustain but improve on these results for the next financial year,’ he told Legal Business. ‘We are not going to stand still. We are all aware of the growth potential of the platform and are pushing hard to get even better results than these next year. We want to reach at least £1m in PEP and are looking to achieve that in the next financial year.’

Ashurst chief financial officer Mark Herbert commented: ‘There has been a real focus on financial discipline at the firm over the last three years. People have been more focused on getting the basics right, including working capital management. It is a really important contributor to our revenue growth and partners are onside and working very hard.’

Jenkins is sanguine about the geopolitical uncertainty affecting the markets and noted that APAC growth should help to hedge against any Brexit-related slowdown in the UK, adding that the firm has also grown US revenue by more than 30% in the last financial year.

Jenkins is planning further strategic investment: ‘Strategy-wise, what I say to partners is that we are looking to grow Continental Europe and Asia at a faster rate than the rest of the firm. We already have a strong presence but would like to be stronger.’

Other business highlights have included low-cost centres in Glasgow and Brisbane which are 20% ahead of budget this financial year, as well as Ashurst Digital Ventures, the in-house development and investment arm of Ashurst Advance, the global innovation team that will have its own P&L from this financial year.

Significant mandates for the year have included advising Goldman Sachs on the launch of its digital-first retail banking platform, Marcus; ANZ on the Royal Commission investigation into misconduct in the banking, superannuation and financial services industry; Facebook on the establishment of joint ventures with other technology and telecoms giants to build, own and operate several trans-Asia telecoms backbone network; and Port Authority of New York and New Jersey on the US$2.7bn Newark Liberty International Airport Terminal One Redevelopment project.

To read more on Ashurst’s unlikely rebound, see Inflection point (£)

nathalie.tidman@legalease.co.uk

Legal Business

Revolving doors: Ashurst bolsters project finance as Eversheds expands in the Netherlands

Revolving doors: Ashurst bolsters project finance as Eversheds expands in the Netherlands

In a week dominated by European hires, Ashurst and Dentons turned to the City with hires in project finance and data privacy, respectively.

Eversheds Sutherland, CMS and Pinsent Masons, meanwhile, all expanded on the continent, with Eversheds adding three partners.

Ashurst grew its project finance team in London with the appointment of Adrian Lawrence, who joins from White & Case and focuses on project finance, banking, corporate and capital markets transactions, with an emphasis on oil and gas and petrochemical projects.

Co-head of the global projects practice Joss Dare told Legal Business: ‘He’s been working on some of the largest oil and gas project financings in the world and is an important part of our plans to grow our international project finance capability, building on recent hires.’ He added: ‘Geographically, he does work around the world but a lot of his focus will be working with Matt Wood to build out our Africa practice.’

Lawrence commented: ‘Ashurst has an excellent project development and finance team, with extensive experience advising both project sponsors and lenders on landmark transactions throughout Europe, the Middle East, Africa and Asia Pacific.’

Dentons, meanwhile, hired data privacy and cyber security partner Antonis Patrikios in London. Patrikios, who joins from Fieldfisher, has experience in the telecommunications, media and technology sectors.

Head of Dentons’ media and telecoms practice Andy Lucas commented: ‘His hire reflects the demand we’re seeing from our clients for data privacy and cyber security advice, and growing our capabilities in this area is a focus for our UK business to enable us to better support our clients on their global data privacy and cyber security needs.’

In the Netherlands, Eversheds added corporate partner Jeroen Hoekstra and commercial partner Benjamin van Kessel from Nineyards Law, while corporate partner Elmer Veenman joined from De Brauw Blackstone Westbroek.

Hoekstra is a founding partner of Nineyards Law, established in 2015, and was previously a partner and co-head of the corporate M&A group at Baker McKenzie. He focuses on joint ventures, M&A, private equity transactions and restructurings. Van Kessel advises on all aspects of intellectual property, information technology and commercial law, while Veenman advises on M&A and corporate transactions.

Eversheds European managing partner Helen Thomas told Legal Business: ‘The Netherlands is an interesting region because it’s had significant economic growth and Brexit will also bring opportunities. There are lots of businesses looking to possibly move operations to the region and Dutch businesses are very active globally. It’s seen as a great place to do business, so strengthening and deepening our corporate commercial team is a response to client needs.’

Elsewhere, CMS boosted its energy and infrastructure projects practices with the hire of Lukasz Szatkowski from Weil, Gotshal & Manges. Szatkowski has more than fifteen years’ experience in transaction, projects and regulatory advice for international and Polish energy companies.

Managing partner of CMS Poland Andrzej Posniak commented: ‘Strengthening the energy team is another element of the development strategy of this practice. We hope that Lukasz, a valued expert in the energy sector, will help us expand both the client base of the firm and the offer for companies operating on this market’.

Pinsent Masons hired capital markets partner Susanne Lenz from Hogan Lovells to its Frankfurt office. Lenz advises global and domestic investment banks as well as corporates on high-yield bonds, IPOs, private placements, rights issues, block trades, dual listings, convertible bonds and debt issuance programs.

Finally, TLT appointed Sean McCay from Squire Patton Boggs as partner. McCay, who is experienced in litigation, will lead the construction team in its Manchester office.

muna.abdi@legalease.co.uk

Legal Business

Ashurst, Slaughters and White & Case re-elect leaders as rivals ring in the change

Ashurst, Slaughters and White & Case re-elect leaders as rivals ring in the change

The recent spate of leadership elections has seen Ashurst, Slaughter and May and White & Case all sticking with tradition while Stephenson Harwood and Quinn Emanuel Urquhart & Sullivan bet on new leaders.

May saw Hugh Verrier’s term as White & Case chair extended to 16 years after he was re-elected for another four years at the helm of the New York-bred giant. First elected to the role in 2007, Verrier’s tenure has seen sustained growth for the firm, most strikingly in London, where the 2020 strategy led by partner Oliver Brettle, and its core ambition of taking on the Magic Circle in its own backyard, have paid dividends.

Legal Business

Ashurst dismisses board member under cloud of misconduct

Ashurst dismisses board member under cloud of misconduct

The board of Ashurst has asked Bernd Egbers, a Munich-based board member, to leave the firm ‘as a result of ‘conduct which is contrary to [the firm’s] values’.

Announcing the move on Tuesday (11 June), the firm would not divulge the nature of the misconduct, only that there was no connection to any client or client matter.

Joining Ashurst in 2006 from legacy Norton Rose, Egbers became partner three years later. He specialised in both domestic and cross-border structured finance transactions.

Partners at the firm voted in Egbers in 2016 post its merger with Australia’s Blake Dawson. That year, the firm posted its second year of falling revenue following the tie-up with turnover dipping by £28m, a drop of 10% to £505m.

The fall came on the back of a 4% decrease the previous year, when revenues fell to £561m from £568m. Profits per equity partner also fell by 19%, down to £603,000 from £747,000 during the 2015/16 financial year.

Ashurst has in recent years staged something of a recovery, with renewed financial success largely credited to the focused approach of global managing partner Paul Jenkins.

Estimated revenue growth for the firm for the 2018/19 financial year is between 13% and 15%, while approximately a 25% uptick in PEP is also on the cards.

Nathalie.tidman@legalease.co.uk

To read more about Ashurst’s revival, read ‘Inflection point – Ashurst steps back from the brink but can the revival last?’

 

Legal Business

Comment: Vital signs – the passing of old Ashurst holds surprising new life

Comment: Vital signs – the passing of old Ashurst holds surprising new life

Sometimes in institutional terms, something has to die before something new can live. The good news for Ashurst, as chronicled in this month’s cover feature, is that the City player is showing vivid signs of renewed life, with the firm set to post by far its best performance after a decade that has been plain bad. After the low points in late 2016 and early 2017, level-headed people were asking how long this could continue before decline became outright calamity.

The obvious caveat – and it is a substantial one – is that this has come largely by building on the ruins of what Ashurst was: a storied, corporate-driven City player with enviable history and a cohesive culture. What has emerged as the old edifice progressively crumbled is unrecognisable against Ashurst circa 2009. Thanks to its controversial merger with Blake Dawson, the shape and practice mix of the business has radically changed. Its once-vaunted private equity team has been battered down to functional coverage across Europe – the final blow to any borderline claim to first-division status being Freshfields Bruckhaus Deringer’s five-partner Paris raid two years ago. And most of the big-name corporate figures have left over the years or retired – most recently Robert Ogilvy Watson and Simon Beddow – leaving a core corporate practice generating around 20% of its income; on paper, you would expect a firm of this heritage to be doing over 30%.

And what has emerged? I am not saying Ashurst is now a huge infra boutique, but it is doing about as good an impression of one as you can imagine for a firm that until recently saw itself as a Magic Circle challenger. Look at its litigation, corporate and finance teams, and you will see a lot of work for infra and energy clients. The major exception to this has been the firm’s surprisingly successful move into the TMT sector, building in part on the 2016 hires of Nick Elverston and Amanda Hale from Herbert Smith Freehills.

Much of this revival obviously comes through making a virtue of necessity. Having failed to remain credible in executing its previous model, it has pivoted to something new. In these Brexit-infused times, Ashurst’s accepted view that it is where it is, and it was better to move forward constructively and play to new strengths than bemoan what it has lost, deserves praise. After all, moving on will be tough given its partnership’s historic addiction to angsting about the past.

It also speaks to the theme we touch upon in this month’s leader, which argues that major City firms cannot credibly continue as lookalike generalists. The less Ashurst resembles its peers, the easier it is to imagine the firm thriving, as has happened with its lean-but-effective US infra push. Much of the credit here has to go to managing partner Paul Jenkins. In an age in which many large City-bred law firms have forgotten the value of effective leadership, his clarity, competence and common sense has gone a long, long way.

I cannot fully commit yet – I have been hurt before. It will take another year or two of confident performance before the firm can genuinely lay claim to a credible place in the global market and I still argue its disputes team is too small for its business model. But it is a pleasure to see life in the old Ashurst yet.

alex.novarese@legalease.co.uk

See Inflection point for more on Ashurst.

Legal Business

Inflection point – Ashurst steps back from the brink but can the revival last?

Inflection point – Ashurst steps back from the brink but can the revival last?

It was not all plain sailing,’ reflects Ben Tidswell, Ashurst’s chair, on the aftermath of its 2013 merger with Australia’s Blake Dawson. ‘But partners saw what we were trying to achieve and most wanted to be part of that. Now the firm is enjoying the success of that.’

Tidswell speaks with the palpable relief of one whose darkest days are behind him. The merged firm is now on the brink of revealing its best financial showing to date after years of indifferent or poor performance. Tidswell may well celebrate given the upheaval that preceded this inflection point, dwarfing any woes suffered by City rival Lovells following its 2010 union with Washington DC’s Hogan & Hartson.

Legal Business

Vital signs – the passing of old Ashurst holds new life

Vital signs – the passing of old Ashurst holds new life

Sometimes in institutional terms, something has to die before something new can live. The good news for Ashurst, as chronicled in this month’s cover feature, is that the City player is showing vivid signs of renewed life, with the firm set to post by far its best performance after a decade that has been plain bad. After the low points in late 2016 and early 2017, level-headed people were asking how long this could continue before decline became outright calamity.

The obvious caveat – and it is a substantial one – is that this has come largely by building on the ruins of what Ashurst was: a storied, corporate-driven City player with enviable history and a cohesive culture. What has emerged as the old edifice progressively crumbled is unrecognisable against Ashurst circa 2009. Thanks to its controversial merger with Blake Dawson, the shape and practice mix of the business has radically changed. Its once-vaunted private equity team has been battered down to functional coverage across Europe – the final blow to any borderline claim to first-division status being Freshfields Bruckhaus Deringer’s five-partner Paris raid two years ago. And most of the big-name corporate figures have left over the years or retired – most recently Robert Ogilvy Watson and Simon Beddow – leaving a core corporate practice generating around 20% of its income; on paper, you would expect a firm of this heritage to be doing over 30%.

Legal Business

Legal 500 Data: Behind the story

Legal 500 Data: Behind the story

The Legal 500 2019 London rankings

Ashurst and Hogan Lovells are the subject of this month’s cover feature – both firms that underwent large mergers in the last few years. Here we look at the firms’ London rankings in The Legal 500. For further information see ‘Inflection point’.

Ashurst