Marco Cillario assesses the results amid another strong year for the City’s mid-tier
The latest financial results by UK law firms show leading mid-market players once again harnessing robust commercial activity to post a series of startling results well ahead of larger rivals.
You must be logged in to view full premium content.
Extending beyond its reputation for outstanding mid-market deal work, Travers Smith has once again put its name to a multibillion-dollar deal as IT company Micro Focus sells its open-source software business SUSE for $2.5bn.
Swedish private equity group EQT Partners is on the other side of the table and turned to US giants Latham & Watkins and Milbank, Tweed, Hadley & McCloy to advise on the acquisition.
You must be logged in to view full premium content.
In its ninth consecutive year of revenue growth, Travers Smith has recorded an 18% uptick in turnover to £146.9m, while profit per equity partner (PEP) also saw a dramatic increase.
The private equity leader’s 2017/18 performance eclipsed last year’s result when revenue inched up 4% against a backdrop of Brexit uncertainty.
Travers’ robust performance was also reflected in a 24% hike in PEP, jumping from £970,000 in 2016/17 to £1.2m this year.
Travers managing partner David Patient (pictured) said: ‘A lot of hard work, from every team across the firm, has gone into producing these excellent results.
‘The strategic investments in our people and business over the last few years are paying dividends, and the confidence we, and our clients, have in our model is reflected in some fantastic work this year,’ added Patient.
Undoubtedly a major factor in the positive results is the firm’s ability to punch above its weight, particularly in big-ticket private equity deals.
Long-standing client Bridgepoint proved a fruitful source of work for Travers over the last year, with the firm advising the private equity shop on its £1.5bn sale of food chain Pret A Manger in June. In another gastronomical deal, Travers was again on hand to advise Bridgepoint as it acquired a raft of UK Burger King franchises.
Other standout mandates included the firm’s representation of PureGym’s management team as its business was acquired by US private equity house Leonard Green & Partners for £600m.
Travers is currently led by Patient and senior partner Chris Hale, with Patient being re-elected as managing partner at the beginning of this year and starting his second three-year term on 1 July.
It was a busy week for UK and US deal counsel as Travers Smith and Ashurst acted on multibillion-pound deals north of the channel and White & Case and Ropes & Gray landed key mandates in continental Europe.
Again acting well above its traditional mid-market territory, Travers advised IT company Micro Focus on the $2.5bn sale of open source software business SUSE to EQT Partners.
Head of corporate Spencer Summerfield led the Travers team, which also included corporate partners Jon Reddington and Mohammed Senouci.
Summerfield pointed to his firm’s history with the software business, having advised UK company Micro Focus when it initially bought SUSE in 2014 as part of the $2.3bn acquisition of The Attachmate Group. He commented: ‘This investment has generated substantial shareholder value and provided the SUSE business with a strong, long term investor to support its next phase of growth.’
Travers also fielded a team of specialists on the deal, including IP and tech partners Dan Reavill and James Longster, competition partner Stephen Whitfield, tax partners Simon Skinner and Madeline Gowlett, head of incentives and remuneration Mahesh Varia and real estate partner Paul Kenny.
The deal was another big mandate for Travers after longstanding client Bridgepoint recently instructed the UK firm on its £1.5bn sale of Pret A Manger.
A Latham & Watkins team led by finance partner Dominic Newcomb advised EQT alongside Milbank, Tweed, Hadley & McCloy. Completion of the deal is expected in the first quarter of next year.
Meanwhile, White & Case advised CVC Capital Partners in one of Italy’s largest ever private equity transactions: the €3bn acquisition of Italian drugmaker Recordati from the family of the company’s founders.
White & Case’s Milan office founder Michael Immordino acted for the private equity house on the M&A and financing aspects of the transaction. CVC will buy 51.8% of Recordati in a transaction valuing the company at almost €6bn.
London partners Mike Weir and Steve Worthington were also part of the team, alongside Milan-based Ferigo Foscari and Leonardo Graffi. Martin Forbes, James Greene, Iacopo Canino and Alessandro Nolet advised on the financing of the deal.
Italy private equity firm Gattai Minoli Agostinelli & Partners also acted for CVC with founder Bruno Gattai and partners Gerardo Gabrielli, Nicola Brunetti and Lorenzo Cairo. Independent firm Studio Tributario Associato Facchini Rossi & Soci advised on tax and due diligence with partners Luca Rossi, Giancarlo Lapecorella and Marina Ampolilla.
Also on the continent, Ropes & Gray advised Netherlands telecoms company Altice Europe on the sale of stakes in its tower businesses in France and Portugal to KKR, Morgan Stanley and Horizon Equity Partners in a deal worth €2.5bn.
London finance partner Michael Kazakevich led the US firm’s team acting on the financing side, while French firm Franklin advised Altice on the M&A aspects with partners Christian Sauer, Julie Catala Marty and Magali Masson.
French firm Darrois Villey Maillot Brochier and US giant Simpson Thacher advised KKR, which will buy 49.99% of Altice’s French tower company, including 1,200 sites in the country valued at €3.6bn.
Partners Alain Maillot and Jean-Baptiste de Martigny led Darrois’s team. Morgan Stanley infrastructure and horizon equity partners will acquire 75% of Altice’s Portuguese tower company, with a portfolio of 2,961 tower sites worth €660m.
Back in the UK, Ashurst advised Volcan Investments on the acquisition of Vedanta Resources in a deal valuing the UK mining company at £2.3bn and bringing an end to its UK listing.
Corporate partner Tom Mercer led the team acting for Volcan, which already owns 66.5% of Vedanta and is seeking to acquire the rest for £778m. Corporate partner Robert Ogilvy Watson and finance partner Tim Rennie were also part of the Ashurst team.
Ashurst had acted for Vedanta on the $812.6m acquisition of Electrosteel Steels and the $2.3bn merger with Cairn India. But this time the firm acted for Volcan, which had previously turned to Allen & Overy as it invested £3.5bn in Anglo American.
Latham advised the independent committee of the board of Vedanta with a London-based team led by corporate partners Richard Butterwick and Nick Cline.
Ten years after acquiring Pret A Manger in a deal worth £350m, private equity house Bridgepoint is selling it for more than four times its original investment and providing City firms with big mandates.
Luxembourg-headquartered JAB Holding Company, an investment firm owned by Germany’s Reimann family, is to buy the food chain for £1.5bn.
You must be logged in to view full premium content.
As the January senior appointments merry-go-round at City and global law firms continues, Hogan Lovells has announced a new chair while Travers Smith has re-elected David Patient as managing partner.
In a move that brings its German practice in the spotlight, Hogan Lovells has announced that Hamburg-based Leopold von Gerlach will replace Nicholas Cheffings as chair of the board on 1 May for a three-year term.
A member of the board representing continental Europe since 2014, IP, media and technology partner von Gerlach was voted into the new role by the partnership after the board put forward his name following a firm-wide consultation process. He joined the firm in 1995.
Members of Hogan Lovells’s board make up the compensation committee, which looks after the firm’s annual bonus scheme and reviews equity partners’ remuneration every second year. They are also part of the equity elevation and partner advancement committees, working with the firm’s management on the promotion of associates and counsel to the partnership.
The board provides input to the international management committee and oversees the affairs of the firm, but has no executive responsibility for strategy.
Speaking to Legal Business, Cheffings said von Gerlach had a ‘broad combination of attributes’ that made him the right choice for the role: ‘He has been with the firm for a long time, he understands the culture, he is very focused upon collaboration and people being at the heart of our business – very good with clients.’
Real estate disputes co-head Cheffings was Hogan Lovells’ first post-merger sole global chair, taking over from co-chairs Claudette Christian and John Young in 2012, two years after the merger between Lovells and Hogan & Hartson. He was re-appointed in the role in 2015 and is now stepping down after reaching the maximum two terms set by the firm.
He said his main achievement in his six years as chair was ‘overseeing the transition from a firm which was seen as a new kid on the global block – with a lot of energy and excitement but clearly challenges in terms of delivering on its plans – to what’s now a very mature player and one of the most highly respected global law firms with a very distinct place in the legal market.’
Cheffings will continue to lead Hogan Lovells’ real estate disputes group along with Mathew Ditchburn.
Meanwhile, Travers Smith re-elected David Patient as managing partner after he stood unopposed.
Patient, who will manage the firm for a second three-year term starting on 1 July, told Legal Business: ‘Last year went by in a flash, and politically we seemed to be lurching from one crisis to another but we sailed through it all. Clients were very busy in lots of areas, regulatory has been very busy and disputes has been firing on all cylinders. Private equity and M&A have also been strong.’
He added he was ‘pretty positive’ for the year ahead. ‘There will be some bumps in the road ahead but I’m confident that this year is going to be good in lots of areas.’
Travers-bred corporate lawyer Patient became a partner in 1999, when he established its Paris office, and replaced Andrew Lilley at the helm of the firm in January 2015 . He had previously run for the managing partner role in 2009 losing out to Lilley, who went on to serve a second term in 2012.
The firm’s most recent financial performance showed a 4% rise in revenue to £125m in 2016/17, marking eight consecutive years of growth. But profit per equity partner dropped 4% to £970,000, with Patient saying at the time the firm was ‘right in the middle’ of a period of significant investment .
Leonard Green acquires gym chain for £600m
2017 has continued to provide rich pickings for firms with marquee private equity practices on either side of the Atlantic, with Latham & Watkins, Ropes & Gray and Travers Smith leading as US private equity house Leonard Green & Partners announced its £600m acquisition of PureGym from buyout firm CCMP Capital Advisors in November.
You must be logged in to view full premium content.
Travers Smith, one of Bridgepoint’s go-to firms, has sealed another mandate in the form of the private equity (PE) house’s acquisition of a raft of UK Burger King franchises.
The mid-market deal saw Travers advise its longstanding client, while Macfarlanes – itself no stranger to Bridgepoint – advised the management buy-in team. The acquisition from Burger King Europe (BKE) means Bridgepoint will now own Caspian UK Group, the franchisee of some 74 fast food outlets.
You must be logged in to view full premium content.
Travers Smith, Slaughter and May and Hogan Lovells all advised as Tata Steel last month signed a long-awaited agreement to separate its business from the £15bn British Steel Pension Scheme (BSPS), in what is the largest pensions scheme restructuring ever in the UK.
As a result of the separation, achieved through a regulated apportionment arrangement, Tata will pay £550m to BSPS, which will also be given a 33% equity stake in the steel company. With the support of The Pensions Regulator and the Pension Protection Fund (PPF), a new BSPS will be created after an assessment period.
You must be logged in to view full premium content.
Travers Smith, Slaughter and May and Hogan Lovells have all advised as Tata Steel today signed a long-awaited agreement to separate its business from the £15bn British Steel Pension Scheme (BSPS), in what is the largest pensions scheme restructuring ever in the UK.
As a result of the separation, achieved through a regulated apportionment arrangement (RAA), Tata Steel will pay £550m to BSPS, which will also be given a 33% equity stake in the steel company. With the support of the Pensions Regulator and the Pension Protection Fund (PPF), a new BSPS will be created after an assessment period.
Slaughter and May advised long-standing client Tata Steel on the restructuring, with pensions and employment partners Charles Cameron and Phil Linnard, restructuring partner Ian Johnson, finance partner Andrew McClean and M&A partner Padraig Cronin comprising the team. PwC also represented Tata Steel.
The BSPS trustee has been a Travers Smith client for ten years, and the firm represented it on the restructuring with a team that included pensions partners Paul Stannard, Dan Naylor and Susie Daykin, finance partners Jeremy Walsh and Ed Smith, corporate partner Adrian West, tax partner Richard Stratton and derivatives partner Jonathan Gilmour.
The separation of the BSPS had been seen as a barrier to a potential merger of Tata Steel with Germany’s ThyssenKrupp, but the separation may now accelerate merger discussions.
In a statement, Tata Steel’s group executive director Koushik Chatterjee said: ‘Considering the continued challenges in the global steel industry as well as the uncertain global politico-economic environment, the RAA presents the best possible structural outcome for the members of the British Steel Pension Scheme and for the Tata Steel UK business.’
The PPF, which was represented by Hogan Lovells, said in a statement: ‘Members of the British Steel Pension Scheme will have seen a lot of speculation about the future of their pensions, so we want to reassure them the PPF is there to protect them throughout this process.’
Slaughter’s Cameron added: ‘This restructuring is unusual in a number of ways, and unprecedented in its scale. It is by far the largest pension scheme restructuring carried out in the UK.’
In April 2016, Forsters lined up opposite Slaughter and May on Tata Steel’s deal to sell its European long-products business to UK investment house Greybull Capital.
