Legal Business

Financials 2020/21: revenues up just £1m at CMS UK despite modest global growth

CMS UK unveiled a muted set of financial results today (5 July), with revenues inching up from £566m to £567m as global income increased  3% from €1.426bn to €1.475bn.

However both marginal increases represent a slowing of growth on the previous year, when UK and global figures grew 4% and 5% respectively.

Despite this, CMS UK managing partner Stephen Millar hailed what he described as ‘solid financial results’, which he said ‘reflect our resilience and ability to deliver successfully for our clients against what was an extremely turbulent backdrop in the last year.’

He added: ‘We are committed to building strong, long-term relationships with our clients as their business partners and to support them as they look for solutions to recover from the pandemic and to find new growth opportunities.’

As in previous years , the firm has not disclosed its profitability figures, however its LLP accounts up to April 2020 show an operating profit of £203.6m. This represents a 6% increase in profits from 2019’s £192.8m .

CMS opted to highlight its 52 partner promotions made in 2021, the firm’s largest round since 2019. Out of those 52, 23 were made up in the UK, of which 43% were women.

Penelope Warne, CMS UK senior partner (pictured), said: ‘We celebrate a dynamic, inclusive and supportive culture. We are committed to inspire, impact and support our clients, our people and our communities and to deliver excellence. We are proud of the progress we have made in diversity, our 2025 net zero commitments, and our innovation and technology initiatives.’

Warne was re-elected CMS’ senior partner in January 2020  and has headed up a number of key diversity initiatives during her term, which included seeing women make up 40% of the firm’s board and 30% of its UK partnership.

Legal Business

Revolving doors: Simmons and CMS make City banking and pensions hires as Gibson Dunn bolsters its Paris bench

In another muted patch for City laterals, Simmons & Simmons and CMS were the only firms to hire in London last week as Gibson Dunn & Crutcher recruited to its employment bench and HFW hired in Hong Kong.

Simmons has added to its international banking practice with the hire of Kirsty Barnes, Gowling WLG’s head of banking and finance in the UK.

With 20 years’ experience in the financial markets sectors Barnes has experience in leveraged and acquisition finance, real estate finance and corporate lending transactions.

Head of Simmons’ banking group Peter Manning told Legal Business: ‘Kirsty has done work for Barclays, Lloyds and RBS. She does work for a couple of private equity style funds and has done some leveraged finance work. All of those were really important for us. We thought she would be a good personality and cultural fit for us.

‘She’s very keen to move the practice forward and shares our vision on what that means. We remain committed to doing work for the traditional clearing banks as well as credit funds and the alternative lenders. We’re very much committed to changing the way we deliver our services,’ Manning added.

Meanwhile, CMS has hired pensions partner Tim Green from DWF where he was the national head of its pensions teams.

Green advises trustees, sponsors, government bodies and providers in all aspects of pensions law with particular expertise in retail, energy, nuclear, transport, public and charitable sectors.

Head of pensions at CMS Mark Grant told Legal Business: ‘Tim’s got a great track record of building a practice. We’re in growth mode and this is part of our national growth story. We’ve grown by 30% in pensions in the last two years and this is a continuation of that.’

Elsewhere, Gibson Dunn has hired Ashurst’s Paris former employment head Nataline Fleury to back its European strategy.

Fleury has a particular focus on employment law issues affecting restructuring transactions, acquisitions and disposals. Fleury will be joined by associates Claire-Marie Hincelin and Charline Cosmao, also from Ashurst.

Chairman and managing partner Ken Doran commented: ‘Nataline has strong credentials and is very well regarded in the legal and business communities.  We know her well as we have partnered with her on several client matters over the past year.  She is the perfect person to lead our effort to add a labour and employment capability to our thriving Paris office.’

Finally, HFW has hired senior corporate finance partner Wing Cheung in Hong Kong. He has defected from Locke Lord where he was the Hong Kong managing partner.

Cheung specialises in capital markets, M&A, private equity and other transactional work. He advises clients on corporate and commercial matters, including initial public offerings and M&A and has experience in regulatory enforcement and compliance.

Cheung’s hire is part of HFW’s expansion of its global corporate and finance practices. Earlier this year the firm launched a transactional practice in China and made hires including lateral hires in Hong Kong and Singapore.

Hong Kong office head Patrick Yeung said: ‘This is a major boost to our transactional offering in Greater China and the wider region. Wing brings a wealth of experience of high-end corporate finance, and has an outstanding reputation for his technical expertise and exceptional client service.’

Legal Business

In-house: CMS bumped as core adviser following Lloyds panel review

CMS has dropped off Lloyds Banking Group’s core panel of advisers after a review which reshaped the roster into two lots.

A total of 25 firms are understood to have been appointed, split between a smaller number of core firms and a group of general firms. It was the bank’s first panel review since 2016, when DLA Piper and Norton Rose Fulbright lost their spots as the core panel shrunk from ten to eight firms.

A Lloyds spokesperson said: ‘Following a rigorous and competitive tender process, we have finalised the structure and composition of the Lloyds Banking Group own account panel. The structure has been simplified and now consists of a group of core firms and a group of general firms. The panel has a strong commitment to our mission statement setting out expectations around quality, value and cultural alignment.’

The bank would not confirm which firms had been appointed to the 2019 panel, but it is understood CMS has dropped from being a core adviser to a general. Addleshaw Goddard, Allen & Overy, Ashurst, Eversheds Sutherland, Herbert Smith Freehills, Hogan Lovells and Linklaters are understood to have retained core adviser status, although each firm declined to comment.

The review is the bank’s second since GC Powerlist member Kate Cheetham was promoted from deputy general counsel (GC) to the top job in mid-2015, succeeding Andrew Whittaker.

Lloyds’ legal team also went through a restructuring in recent years which saw the loss of 22 roles, axed as part of a strategic review the wider bank implemented from 2015.

Legal Business

CMS grows UK revenue 5% in second year post-merger but keeps profits under wraps

Revenue at CMS Cameron McKenna Nabarro Olswang hit £545.8m in 2018/19, 5% up on the previous year in what managing partner Stephen Millar (pictured) described as ‘pleasing results in a market which is experiencing a degree of uncertainty’.

The results today (18 June) cover the second financial year since the three-way UK merger between Camerons, Nabarro and Olswang went live in May 2017 and are the first allowing for a full like-for-like comparison with the previous year. The firm said in a statement that the results exceeded budget.

In 2017/18 the UK LLP reported turnover of £518m, £29m up on the consolidated results of the three legacy firms and cited a 19% UK profitability hike but did not disclose profits.

The firm did not disclose UK profits this year, either. LLP accounts published in January showed that in 2017/18, UK operating profit was £160m, up 30% on the £122.5m combined profits of the three legacy firms despite a £30m cost in ‘reorganising, restructuring and integrating’ the merger.

Speaking to Legal Business last summer, Millar put the total merger cost at about £50m and said the firm would take on half the cost in 2017/18 and half in 2018/19. Millar said of today’s results: ‘We performed strongly across our chosen sectors, delivering transformational deals and winning roles on new client panels including Liberty Global and Cadent Gas.’

Also today, the broader CMS international group – spanning more than 70 offices in 40 countries combined together under a European Economic Interest Grouping – reported turnover growth of 5% to €1.36bn in the calendar year 2018, much slower than the previous year’s 31% uptick to €1.3bn when the UK merger was taken into account for the first time.

The firm also announced today that Paris-based Pierre-Sébastien Thill was appointed as its new global chairman, succeeding Cornelius Brandi. Executive partner Duncan Weston and executive director Matthias Lichtblau remain on the firm’s global executive team.

Legal Business

Sponsored briefing: UK courts – Open for business

Caitlin Heard and Gareth Morgan highlight recent cases involving patent disputes to put the case forward for the UK as a key centre for patent litigation

Reflecting on the past 12 months of patent litigation, it is apparent that the tools available to litigants are changing. There is an increasing shift away from the traditional war of attrition that has come to be the norm in multijurisdictional patent disputes, towards more focused and targeted claims, as courts in Europe are increasingly willing to consider international issues and give judgments that have extra-territorial effect.

Legal Business

Deal watch: City and US firms defy tough M&A market with deal duo as Gateley takes the cake on Patisserie Valerie collapse

Slaughter and May, Sullivan & Cromwell, CMS Cameron McKenna Nabarro Olswang and Ashurst have defied a challenging market to take key roles on a pair of UK mergers as listed Gateley leads on the collapse of Patisserie Valerie.

Last week saw the £3.3bn takeover of UK listed plastics manufacturer RPC Group by funds managed by Apollo Management IX, as well as Primary Health Properties’ £393m acquisition of MedicX Fund Limited in an otherwise sedate UK M&A market.

Slaughter and May took the company-side mandate to advise RPC on a recommended offer for all shares by Apollo. Each RPC shareholder will be entitled to 782 pence in cash for each RPC share, valuing the deal at roughly £3.3bn. The shares have been issued by Rome UK Bidco, a vehicle created by the buyer of RPC, which designs and engineers plastic products, including for the plastic packaging markets.

The deal was led by Slaughters head of corporate Andy Ryde with a team including corporate partner and future rising star candidate Paul Mudie.

A Sullivan & Cromwell team led by Ben Perry acted as lead adviser to Apollo on the UK takeover elements of the deal with Paull Weiss London-based M&A partner David Lakhdhir providing additional advice to that firm’s core client in the US.

The sale process has been relatively protracted, becoming public last September and being subject to numerous takeover panel extensions. Bain Capital was also pegged as a potential acquirer of the business but later pulled out of the process. The transaction also includes a significant debt financing piece.

Ryde told Legal Business: ‘RPC’s plastic packaging business has grown rapidly in recent years through acquisition and it was felt that a private equity owner would allow it to continue this acquisitive strategy.’

He added: ‘It is a sign of market confidence that a takeover of this size of a FTSE 250 company can be done in a challenging market. The deal first became public last September and required five takeover panel extensions to finalise the due diligence process. RPC is a decentralised business with seven divisions operating across 33 countries so the deal took time to cross the line – but it got there in the end.’

The deal is slated to close in the second quarter of 2019.

Meanwhile, Ashurst has landed a role advising MedicX Fund, the healthcare infrastructure fund owned by Octopus, on its takeover by Primary Health Properties Plc (PHP).

The deal is being done via a Guernsey law scheme of arrangement and sees the share capital of MedicX issued in exchange for new shares in PHP, a deal which is valued at roughly £393m.

MedicX, a specialist primary care infrastructure investor in healthcare properties in the UK and Ireland, was advised by a team led by Ashurst corporate partner Tom Mercer and including corporate partner Tara Waters.

CMS advised PHP on the deal, with a team spearheaded by partners Glyn Taylor and Jack Shepherd.

MedicX is a closed-end investment company with UK REIT status, listed on the London Stock Exchange. Its investment portfolio includes 166 properties with a value of around £806.7m.

FTSE 250 company PHP is also a listed UK REIT which leases properties to GPs, the NHS and other healthcare providers. It has a market capitalisation of £875m and investments of £1.5bn.

Elsewhere, woes continue to plague the UK high street as Patisserie Valerie succumbed to the dark cloud of ‘significant fraud’ overshadowing the fancy cake chain as it brought in KPMG to administer its collapse earlier this week.

Parent company Patisserie Holdings plc announced the move on Tuesday (22 January), saying that as a direct result of the significant fraud it had been unable to renew its bank facilities.

Last October, a £40m black hole was discovered in the company’s accounts overseen by former finance director Chris Marsh who was then arrested on suspicion of fraud, bailed and then resigned from the company.

Patisserie Valerie’s chairman Luke Johnson has taken out a loan in order to pay out January wages.

Listed law firm Gateley has been unforthcoming about its reported role advising KPMG on the administration. The firm has declined to comment on whether Birmingham-based partner James Madill is advising, as one restructuring source suggests.

On Wednesday (23 January), KPMG announced the closure of loss-making stores, including 27 Patisserie Valerie stores and 19 Druckers stores. A further 25 Patisserie Valerie concessions in Debenhams (the UK department store which has itself been on restructuring counsel’s watch list for several months), Next and motorway service areas have also closed, along with the company’s bakery in Spitalfields. The closures have resulted in 920 redundancies.

Legal Business

CMS adds to Northern line up with Liverpool launch

CMS Cameron McKenna Nabarro Olswang has extended its chain of northern offices with a Liverpool office opening following a hire from DWF, its first launch since its tripartite merger with Nabarro and Olswang in 2017.

The new office – located in Exchange Flags amidst Liverpool’s commercial district – will complement legacy Nabarro’s Manchester and Sheffield offices. DWF real estate partner Abigail Dry has been hired for the Liverpool launch, but the firm would not comment as to how many employees will be driving the opening. Liverpool is the firm’s tenth UK office.

The North has increasingly featured as part of firms’ UK strategies, with Freshfields Bruckhaus Deringer, Reed Smith, and Norton Rose Fulbright all among those to open up in the region. Taylor Wessing was another firm to target Liverpool, setting up an office in the city comprised of business analysts and IP specialists to better support the firm’s London hub. CMS will likely look to make good on an uptake in real estate work across the northern region.

In a statement regarding the Liverpool opening, the firm said: ‘This appointment forms part of our strategy to grow in the North. The ongoing regeneration of the North combined with opportunities coming out of the Northern Powerhouse initiative have resulted in a significant uptake in real estate projects across the region.’

Last June, CMS announced a UK turnover of £518m and a 19% increase in profitability, but chose to omit profit per equity partner in its figures. Meanwhile, the firm’s three-way merger cost approximately £50m, with the cost split to £25m between two financial years.

In October of last year, the firm lost real estate heavyweights Alan Karsberg and Simon Kanter to Fladgate, while in November Fladgate deepened the blow by recruiting an eight-lawyer team in London. CMS subsequently commented the exodus was due to ‘confidential client conflict issues’.

Legal Business

The CMS interview: Pains and gains

Marco Cillario caught up with CMS UK managing partner Stephen Millar to discuss the first year since the three-way union with Nabarro and Olswang went live

Legal Business (LB): What’s your general take on the first year and a half of life of CMS Cameron McKenna Nabarro Olswang?

Legal Business

Refreshing revamps: EDF and Co-op Group look to new firms in panel reviews

One of the UK’s big six energy suppliers, EDF Energy, has nearly halved its external advisers in a bid to plug into ‘deeper’ relationships, while the addition of two new firms mirrors the refreshment seen elsewhere in the Co-operative Group’s revamped legal panel.

In late April, CMS Cameron McKenna Nabarro Olswang and Bryan Cave Leighton Paisner (BCLP) were added to EDF’s new panel of eight firms, which has been cut from the previous 14.

Legal Business

Asia calling: Linklaters and CMS confirm local law capability in Shanghai and Hong Kong

Recent announcements from Linklaters and CMS have provided a fillip to international firms looking to gain a surer footing in China.

Linklaters announced in May that it had finally received the green light to practise Chinese law through a joint operations agreement with Shanghai outfit Zhao Sheng Law Firm.