With the positive economic forecast and a tax favourable environment, is now a good time to consider selling a business?

Hazlewoods Corporate Finance team has seen a surge in buying and selling activity across a range of sectors. Mid-market private equity houses are seeking quality assets to strengthen their portfolios – and have cash which they must deploy. Likewise, corporate acquirers are seeking to enhance their market share and consolidate their position post-pandemic and are seeking acquisitions that enhance their market position.

Meanwhile, many business owners have been assessing their personal and business aspirations over the past year or so, with many deciding that new pastures lie ahead. Selling to the existing management team via a management buyout (MBO) or employee ownership trust (EOT), or to a trade buyer or private equity, enables them to secure their business and the future of their employees while creating flexibility for them to explore other interests.

With the economic forecast improving and well-structured business disposals attracting only 10% tax in some cases (or even 0% tax on a sale to an EOT), now is a great time to sell, particularly since this could all change in the Chancellor’s next Budget; there is a considerable risk that the tax environment may become less appealing in the not too distant future, so it might be best to strike while the iron is hot.

How can the Hazlewoods Corporate Finance team help with exit planning?

Hazlewoods has one of the most active Corporate Finance teams in the UK (we were ranked 6^th overall in Experian’s most recent M&A report). Last year, despite the impact of COVID-19, we completed 133 transactions valued at more than £763 million. In the previous 12 months, the figure was 205 deals worth more than £1 billion.

We guide business owners through the exit process every day. We offer a partner-led service from inception and initial scoping right through to completion day and beyond, offering expert advice every step of the way.

We have extensive experience in strategic planning to maximise value on exit and ensure the sales process runs seamlessly.

Here is a brief summary of our proven approach:

• Preparation of an Information Memorandum (a sales brochure that will highlight the strengths of your business to a potential buyer)
• Creation of a Blind profile (a one-page teaser document that will be sent to potential buyers)
• Assistance with the preparation of an integrated forecast model
• Research and identification of potential acquirers
• Advice on the financial and legal structure of the proposed transaction (including any steps required to minimise the tax liability on disposal)
• Guidance on tactics and negotiation of the terms of the sale
• Review of the legal documentation, including the Sale and Purchase Agreement
• Comprehensive deal management – co-ordination of the process through to completion

What would you say are the most important things to consider when planning an exit?

Without a doubt, taking steps to maximise the value of your business is imperative – anyone who is selling their company wants to get the best possible price for what has often been their life’s work.

The following steps will enable you to create a business that is investment ready:

Get your books in order

Accurate accounting information and financial statements are not only important for the effective management of your business, if you want to sell, they provide the best measure of current and future performance.

Create a business plan

Having a strategic business plan will provide potential buyers with the comfort that you know where your business is going and how it will get there. It will increase your credibility in the eyes of investors.

Update systems and controls

Put in place policies and procedures to ensure that your business operates efficiently and complies with laws and regulations – this will reassure a buyer that the company can function effectively post-sale.

Strengthen customer contracts

Your order book will demonstrate your company’s viability. Make sure that client contracts are up-to-date and enforceable as this will show that (at least for the length of the contract) customers will remain with the business when it is sold. Where possible, strengthen existing client contracts and confirm new recurring revenue streams.

Diversify

Reliance on a handful of customers can be problematic. If important customers switched suppliers, it would pose a risk to revenue and cash flow. Aim to reduce customer concentration and diversify your customer base so that you are not reliant on a few specific customers. Additionally, ensure that you are not dependent on a single supplier – if they cannot provide materials, you need to be able to get them from somewhere else.

Improve profitability

Consider ways that you can cut costs to boost profitability, focusing on the bottom line, not the top. If your company is valued on the basis of a multiple of earnings, increased profit will lead to a higher valuation.

Build a strong and motivated management team

Your business is only as good as the people who run it. Make your staff a key asset (a buyer is likely to want to retain them post-sale), make yourself dispensable (rather than indispensable!) and show that you are not vital to the success of the business.

Protect your intellectual property

Patents, copyrights, trademarks and brand names can enable a company to sell its products and services for more money and deter competitors from entering the market. A potential buyer may be prepared to pay a premium for a company with protected IP.

It can take up to five years to become investment ready, but by starting this process as early as you can, the end result will be a profitable, cash-generating business with a robust management team, a positive brand image and strong customer and supplier relationships. This will make your Company an attractive proposition for potential buyers.

What trends do you anticipate for the M&A space for the remaining part of the year?

We forecast a continuing strong demand across numerous sectors, particularly for tech-enabled businesses and those with a strong brand and intellectual property. We are also anticipating an increasing number of MBOs as owner-managers want to retire and leave their business in safe hands.

We have also seen an increasing number of clients wanting to exit via an EOT. In a nutshell, the shares in the business are sold to a special type of trust which is owned by all of the employees – the idea being based around the John Lewis Partnership model – the staff are able to share in the company’s profits with a tax-free bonus of up to £3,600 each annually. Employees do not need to put any money into the business, and it is attractive to shareholders who want to exit because they can sell their shares to the EOT – and take out the money owed to them - tax-free. In comparison, a sale to a third party would incur capital gains tax of at least 10%.

Overall, 2021 is looking bright with a raft of transactions in the pipeline for the Hazlewoods Corporate Finance team.

If you would like more information or a discussion on selling your business, please get in touch with Rich Grover at rich.grover@hazlewoods.co.uk or 01242 680000.

In any M&A sales process, the seller’s counsel will negotiate a non-disclosure agreement (NDA) with potential buyers and their legal counsel. The one-way NDA that each buyer executes protects the seller’s confidential information. There could be 30, 40, 50 or more potential buyers in a highly competitive M&A sales process, which means an NDA for each potential buyer. Scott Rissmiller has counselled sellers in two different sales processes in the last nine months that involved over 30 and over 50 NDAs, respectively. While some buyers sign the NDA as provided, many buyers negotiate it. Comments on an NDA from the two types of buyers (i.e., strategic and financial sponsors) will vary, especially regarding certain NDA provisions. 

The seller’s counsel will not get every point they want in the final NDA from each potential buyer, and thus their counsel must identify the areas to focus on when encountering comments from a potential buyer. Scott lists the three particular areas that often generate comments from any buyer (though their specific comments may vary) as follows:

1. Access to and distribution of confidential information

The NDA defines the scope of confidential information (which is broad but often non-controversial) and will specify to whom the potential buyer can share confidential information. To start, the seller should only permit a buyer to share confidential information with their representatives (e.g., officers, directors, accountants, attorneys, bankers, etc.) who need to know such information. A financial sponsor will also want to share confidential information with other parties, including their lenders, partners, operating partners, and perhaps even portfolio companies. The seller will want to avoid the sharing of confidential information with a portfolio company, especially if it competes with the seller (or any part of their business). However, the seller may be willing to permit a financial sponsor with only a few portfolio companies (none of which compete with the seller) to permit disclosure to portfolio companies. A financial sponsor may want to also specify that a portfolio company is not deemed to be a “representative” and thus subject to the NDA unless that portfolio company receives confidential information. In that case, the seller should specify that a portfolio company is deemed to be a representative if it receives or is given access to confidential information—the key factor being whether a portfolio company can access confidential information, not whether it actually receives confidential information. A strategic buyer may want to share confidential information with subsidiaries and/or a subsidiary’s officers, directors and employees. In that situation, the seller is also focused on limiting disclosure, especially because a strategic (or its subsidiary) likely operates in the same industry and may directly compete. The seller and their advisers should evaluate these types of comments on a case-by-case basis and consult with their business representatives and bankers to determine the nature and history of the particular buyer and whether it presents a legitimate opportunity and justifiable risk.

2. Non-solicitation

In order to receive confidential information (including information regarding key executives and employees) and potentially meeting with key executives, a buyer is often required to agree to a non-solicitation provision so that it cannot poach the seller’s employees. This is of greater importance with strategics who compete with the seller or a financial sponsor with competing portfolio companies, especially if the seller is selling only certain assets or a line of business. For some buyers, the seller may be willing to limit the non-solicit to senior executives. Aside from customary non-solicit carve-outs (such as public advertisements), sellers prefer including “direct or indirect” language with respect to solicitations so that a buyer cannot have a representative circumvent the non-solicit. Some financial sponsors may want express language stating that the non-solicit does not apply to any portfolio company that has not received confidential information. Most NDAs specify that it applies only to the representatives who receive or are given access to confidential information, thus eliminating the need for any such express language, which could otherwise be interpreted as a blanket waiver in favour of the buyer.

3. Retention of confidential information

Buyers typically want language expressly permitting a buyer to retain confidential information in electronic archives pursuant to normal course computer backup operations or to comply with applicable legal and regulatory requirements and record retention policies. An issue arises when the NDA has a relatively short set term because the seller will want any confidential information retained by the buyer after the term to be protected by the NDA’s confidentiality and non-use terms beyond such term, as certain confidential information will not go stale or may be trade secrets. For example, say a strategic buyer drops out of the sales process where the seller is selling a line of business; in that case, the seller is still operating following the transaction, and yet a competitor now has the seller’s confidential information. The seller has a few options, including (i) specifying that confidential information retained for archival purposes or compliance reasons is subject to the NDA for as long as it is retained or (ii) setting a tail period beyond expiration or termination, and/or requiring the buyer to limit access to such retained information to only legal and compliance personnel who need to access it. Financial sponsors with extensive portfolios or who investigate hundreds of potential deals may object to long-standing obligations due to the administrative burden. The seller’s counsel should, as with any other sensitive part of the NDA, consult with the business representatives and bankers to determine what may or may not be acceptable in the circumstances.

Takeaways

1. Evaluate comments on sensitive parts of the NDA on a case-by-case basis and gather input from the business representatives and bankers regarding that particular buyer.
2. After receiving comments from a few buyers, the seller and their counsel and bankers should discuss and agree on “ground rules” for comments on the NDA to help streamline the process.
3. Recognise that each buyer and their portfolio of companies or subsidiaries will vary—changes from one buyer may be acceptable but similar changes from another buyer may not be.
4. Specifically draft the non-solicitation provisions to make clear what is permitted so that it is also clear what is not permitted.
5. Include tail language so that confidential information that is necessarily retained remains protected.

Nick Collevecchio, Counsel in Venable’s corporate group, contributed to this article.

The Takeover Panel was required to look again at the use of conditions, including MAC, a subject on which it last provided substantive comment and guidance in 2001. Dean Harper, Consultant Solicitor at McCarthy Denning, explores the incident and what it means for M&A.

On 12 March 2020, Brigadier Acquisition Company Limited announced a recommended cash offer for Moss Bros at 22p per share, valuing the target at £22.6 million. The takeover was structured as a scheme of arrangement under Part 26 of the Companies Act 2006 requiring both court and 75% shareholder approval. Unlike in the more straight-forward offer structure, the target under a scheme has more control over the process and is required to prepare much of the scheme documentation. A scheme document, setting out the proposals and including the conditions to the Brigadier offer, was duly prepared and sent to Moss Bros’ shareholders on 7 April and a shareholder meeting called to approve the scheme.

The World Health Organisation had publicly declared the spread of coronavirus to be a pandemic the day before the Brigadier offer was announced. In the period between the announcement of the offer and the publication of the scheme document, the Government introduced the Coronavirus lockdown on 23 March. Moss Bros issued an announcement only a few days later on 25 March 2020 that, having seen a “significant reduction in footfall across our retail outlets”, the decision had been taken to temporarily close all its stores until further notice. The announcement also stated that “The Group expects that the effects of the COVID-19 will result in a significant reduction in revenue and profitability for the year ending 30 January 2021” but to which it added “…it is too early to determine the precise quantum at this stage.”

The World Health Organisation had publicly declared the spread of coronavirus to be a pandemic the day before the Brigadier offer was announced.

On 22 April, Moss Bros announced that it had been informed by Brigadier that it was seeking a ruling from the Panel in order to invoke a condition of its offer and lapse its offer for Moss Bros. Withdrawing or lapsing an offer after it has been announced requires the consent of the Panel. The Panel’s has previously stated position is that the “normal assumption should be that shareholders and the market expect that protective provisions will not be invoked” so Brigadier was facing an uphill task from the outset.

The Brigadier Offer was made subject to a long list of conditions, some quite specific and some more general. One of those conditions was a MAC condition: “there having been…no material adverse change and no circumstances having arisen which would reasonably be expected to result in any material adverse change in, the business, assets, financial or trading position of profits, operational performance or prospects of any member of the Wider Moss Bros Group which is material in the context of the Wider Moss Bros Group taken as a whole”. Although it was not been made public at the time, we now know that Brigadier sought to invoke a number of conditions, including this MAC condition.

They also tried to rely on a condition relating to the enactment of legislation which materially adversely affected the business, finances or prospects of Moss Bros, the condition concerning Moss Bros admitting inability to pay its debts, stopping payment of debts  or seeking to restructure its indebtedness, and, finally one that required no liability having arisen or increased which would have a material adverse effect on the Moss Bros Group. All of these conditions required the relevant matter to have a material and adverse effect so they could all be generally characterised as MAC conditions.

The Panel’s has previously stated position is that the “normal assumption should be that shareholders and the market expect that protective provisions will not be invoked” so Brigadier was facing an uphill task from the outset.

Notwithstanding Brigadier’s request that the Panel allow it to withdraw its offer, Moss Bros announced on 23 April that there would be no change in the offer timetable and went ahead with the Court Meeting and the General Meeting of shareholders on 29 April (although, due to social distancing rules, shareholders were told to stay away and submit their votes by proxy). At the meeting, the scheme was approved and the directors were authorised to take all such action as they may consider necessary or appropriate for carrying the Scheme into effect. In the meantime, the Panel was still considering whether to allow Brigadier to lapse its offer on the basis of the MAC condition.

Conditions to an offer are governed by Rule 13 of the City Code on Takeovers & Mergers. Rule 13.5(a) of the Code states that “An offeror should not invoke any condition or pre-condition so as to cause the offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke a condition or pre-condition are of material significance to the offeror in the context of the offer.”

Guidance on the scope and effect of Code Rule 13(a) has been given by the Panel in Practice Statement No. 5, issued in 2001 (and updated in 2004 and 2011) following the request by WPP Group plc to lapse its offer for Tempus Group plc as a result of the 9/11 terrorist attacks. In WPP’s view, 9/11 had resulted in a significant deterioration in Tempus’ long-term prospects and this constituted a material adverse change allowing them to use the MAC condition to withdraw their offer.

WPP were unsuccessful and, in fact, the Panel has never allowed an offer to be withdrawn or lapse based on the use of a MAC condition.  Its view is that “…meeting [the] test [of what is material significance] requires an adverse change of very considerable significance striking at the heart of the purpose of the transaction, analogous….to something that would justify frustration of a contract”.

[ymal]

The Panel has since made it clear that this test does not require the offeror to demonstrate frustration in the legal sense, which is where a contract has become impossible to perform, but the bar to reliance on a MAC Condition is nonetheless set extremely high.

In determining what is of “material significance to the offeror” a matter must be specific and the position has to be considered objectively. Nonetheless, the views of the offeror and other informed parties, such as the offeree, should be given appropriate weight. The burden of proof is on the offeror.

The adverse change must also not be short-term in its effect. The Panel has previously indicated that something that has only a temporary effect on profitability is not sufficient to satisfy the “material significance” test. In relation to an acquisition for strategic reasons, the Panel has previously expressed the view that the purchaser is “clearly investing for the long term and therefore something of material significance to such an offer ‘in the context of the offer’ had to be long term”.  A Brigadier director quoted in the original announcement of the Offer referred to being “excited to contribute our expertise and assist in delivering the current strategy. We see the Acquisition as an opportunity to contribute our expertise to improve Moss Bros’ financial performance and protect its heritage, brand and presence on the UK high street.” This suggests a long-term view of the acquisition and the development of the company in private ownership and will not have assisted Brigadier’s chances of obtaining a favourable ruling from the Panel.

Moss Bros resisted the attempt to lapse the offer and indicated that it planned to “take all necessary action” to convince the Panel that Brigadier did not have a valid reason to allow it to revoke its offer and that they believed “the requirements [to lapse an offer on the basis of a condition] have not been met and that the offer should not therefore be permitted to lapse”. This view received support from major Moss Bros shareholders and the matter was identified by some as a test of the City’s resolve and the view has been expressed that allowing the Brigadier Offer to be lapse in these circumstances could start a worrying trend for future deals.

The Panel has previously indicated that something that has only a temporary effect on profitability is not sufficient to satisfy the “material significance” test.

Given the long-term strategic reasons for the acquisition, the difficulty in assessing the likely long-term effect of the current crisis on profitability, the likelihood that lockdown restrictions on non-food retail may be lifted in some way in the relatively near future and the chance of Moss Bros recovering from the damage the lockdown has caused, coupled with the not unreasonable expectation that Brigadier had or should have priced-in the potential impact of the coronavirus pandemic, it was always likely that the Panel would deny Brigadier the ability to lapse their Offer. The history of attempts to rely on a MAC condition to withdraw or lapse an offer was not on Brigadier’s side and the criteria to allow reliance on a condition of this type is very strict and Brigadier was always likely to fall short.

It came as no surprise to many when The Panel announced on 19 May that, having considered Brigadier’s submissions as to why it should be permitted to lapse its bid and Moss Bros’ submissions as to why it believed there were no grounds for allowing it, Brigadier had not established “that the circumstances which give rise to its right to invoke the relevant conditions are of material significance to it in the context of its offer” and that Brigadier should not, therefore, be permitted to invoke any of the conditions or withdraw its offer.

This serves to re-enforce the requirements for bidders to recognise that once a Rule 2.7 announcement of a firm intention to make an offer is made, reliance on a condition, other than the acceptance condition and regulatory approvals, is extremely unlikely to enable the offer to be withdrawn unless the impact is considerable and ,it seems, even the impact and consequences of something as momentous as the coronavirus pandemic may not be sufficient.  The Panel Statement noted, however, that Brigadier had been given a short period of time in which to decide whether to request a review of the Panel’s ruling by the Panel’s Hearings Committee and indicated that a further announcement would be made in due course.  Brigadier initially requested a review of the Panel Executive’s ruling but then withdrew its request and the Hearings Committee issued a statement on 26 May 2020 that, accordingly, the Panel Executive’s ruling stands.  It always seemed unlikely that Brigadier would obtain a more favourable result from such a review should their request not have been withdrawn and that no doubt figured in their decision to withdraw it.

This strategic acquisition will enable Upfield to enter a new segment, presenting an additional growth opportunity for the company. VIOLIFE will become part of the iconic Upfield brand family, that includes household names such as Flora, Rama, Country Crock, Blue Brand and Proactiv.

The plant-based cheese market is growing at an increasing pace and on a global scale. VIOLIFE is already the number one plant-based cheese brand in the United Kingdom and Arivia has also built a strong and fast-growing presence in the United States.

The combination of Arivia's brand and product proposition, and Upfield's brand-marketing expertise, infrastructure and worldwide distribution network – including in the foodservice channel – will create a unique opportunity to accelerate the growth of the plant-based cheese segment globally. Arivia is headquartered in Thessaloniki, Greece with a factory located in the north-east of the country.

Commenting on the transaction, David Haines, CEO of Upfield Group B.V. said: "This acquisition is aligned with our growth strategy and mission to be the global authority in plant-based foods. Consumers are increasingly demanding quality, natural and tasty alternatives to dairy products, and welcoming Arivia products into the Upfield family, will enable us to go further in meeting those demands, whilst growing our plant-based offering."

Koutalidis Law Office acted as legal advisers to Arivia, with Partner Katia Protopapa and Senior Associate Yiannis Loizos leading the transaction.

Based in Ladenburg/Baden-Württemberg, BK Giulini specialises in producing and selling additives such as food additives and more. Part of the ICL Phosphate Solutions division, ICL Ludwigshafen Fertilizers produces fertilizers for the ICL Phosphate Commodities division. Both companies owned properties at Ludwigshafen site with a total land area of ​​over 100,000 square meters.

Founded in Trier in 1972, TRIWO AG is a real estate company which works on asset management, property development, construction and project management, commercial property management and technical property management.

"We are pleased that we were able to bring this complex real estate transaction to a successful conclusion for our clients and that we have found such a competent partner for the Ludwigshafen site in TRIWO", commented Kirsten Girnth.

BK Giulini GmbH and ICL Fertilizers Germany GmbH were advised by Ritterhaus Lawyers, with Dr Kirsten Girnth, (lead, M&A, Corporate), Dr Eva Schwittek, (Real Estate Law), Dr Ing. Jörg Döhrer (Labor Law), Sebastian Koch, LL.M. (M&A, Corporate) (all Frankfurt) and Dr Christoph Rung, (Public Law, Mannheim).

TRIWO was advised by König Rechtsanwälte, with Gerrit Strotmann leading the transaction.

Peter Kühn from Doerr Kühn Plück + Partner (Wiesbaden) acted as a notary.

For $5.3 billion, Visa has agreed to acquire the Silicon Valley start-up Plaid, a firm that is already backed by huge tech investors such as Mary Meeker and Andreessen Horowitz as well as Goldman Sachs. It was valued in 2018 at $2.65bn and is now already worth twice as much.

For visa, this transactions means a deeper push into the ever-growing fintech sector, particularly after is bought a minority stake in Klarna in 2017.

Plaid is a software provider that enables other fintechs and payments services to access customer bank accounts and details, enabling smoother handling of information for financial planning apps, money transfer apps and so forth.

Al Kelly, chief executive and chairman of Visa, said: “This acquisition is the natural evolution of Visa's 60-year journey from safely and securely connecting buyers and sellers to connecting consumers with digital financial services.”

“The combination of Visa and Plaid will put us at the epicentre of the fintech world, expanding our total addressable market and accelerating our long-term revenue growth trajectory,” he continued, according to the FT.

Reporting on the agreed acquisition, Forbes fintech expert Jeff Kauflin believes Visa is strategically acquiring plaid for the sake of its relationships and partners: “Plaid’s 2019 revenue was between $100 and $200 million… Visa would be paying a sky-high price of 35 times sales, one of the highest price-sales multiples in recent history for a private company.

“Visa’s primary reasons for buying Plaid are twofold. First, Plaid works with the vast majority of the largest fintech apps in the US, including Venmo, Square Cash, Chime, Acorns, Robinhood, and Coinbase. With the acquisition, Visa gets access to an important, ballooning base of customers that it can sell additional payment services to. Second, Visa has a global network that’s unparalleled in financial technology, with millions of customers across 200 countries. That will make it much easier for Visa to take Plaid global.”

On the other hand, Stefano Vaccino, founder and CEO of Yapily, believes that this is just the first of many moves by card operators, in anticipation of the changes to the way we pay, powered by Open Banking: "It’s great to see big players positioning themselves in the world of open banking and open finance, this will help to accelerate the sector’s growth even further. 

“Card payments are expensive for merchants to process, and with two-factor authentication on its way in the second part of this year, there will be an increased layer of friction. Payments through Open Banking will offer a smoother and more secure way to pay, and will provide an opportunity for merchants to decrease costs and transfer these benefits to consumers.

“This space will be disrupted hugely as the possibilities of open finance are realised, and incumbents must innovate to remain relevant.”

Ebury provides corporate banking services to small businesses that trade worldwide. Operating in 119 countries, in 140 different currencies, it has processed over £16.7 billion in payments since its inception and helped over 43,000 clients trade internationally.

News has broken that Santander is buying its 50.1% stake in the fintech for £350 million, of which £70 million will help Ebury merge into new markets in Latina America and Asia.

This is a bold but expected move form Santander, as it manages accounts for more than four million SME customers around the globe, 200,000 of which operate on an international scale. The partnership between Santander and Ebury will also allow the fintech to make the most of the bank’s relationships, assets and brand to build new banking partnerships.

Ana Botín, group executive chairman of Banco Santander, said: “Small and medium-sized businesses are a major engine of growth around the world, creating new jobs and contributing up to 60% of total employment and up to 40% of national GDP in emerging economies. By partnering with Ebury, Santander will deliver faster and more efficient products and services for SMEs, previously only accessible to larger corporates.” 

Activity was particularly subdued in the difficult to interpret third quarter of the year, when USD 622.2bn worth of deals were struck globally, down 21.2% on 3Q18 (USD 789.7bn) and with 1,164 fewer deals than last year.

The US market, which had so far seemed immune to the global downward trend at play since the middle of last year, is starting to be impacted. At USD 262.9bn in 3Q19, US M&A is down 32.1% on 3Q18 (USD 387.1bn). Worth USD 1.25tn YTD, US M&A is still marginally up on the same period last year (USD 1.23tn), just about retaining a 50% share of global M&A activity, down from 52.5% in 1H19. Marred by the trade and tech war between Washington and Beijing and persistent political instability in Hong Kong, YTD M&A activity in Asia is down 26.5% over last year to USD 417.2bn.

Despite a small recovery over the summer, European M&A remains 29.4% lower compared to the same period last year, as a weakening European economy and geopolitical tensions continue to dampen activity. However, London Stock Exchange’s USD 27bn acquisition of US-based financial data provider Refinitiv, the largest deal globally in 3Q19, exemplifies the strength of European outbound M&A, which at USD 187.1bn is up more than 20% on last year and at its highest YTD level since 2016.

Beranger Guille, Global Editorial Analytics Director at Mergermarket commented: “Whether they are motivated by the desire to get more growth, or a way to secure future survival, deals are getting larger. On the back of the longest equity bull market in history, and amid persistently low interest rates, corporates have ample cash reserves and appealing debt financing options at their disposal to pursue M&A. This context and the growing feeling that it will not last forever are pushing valuations up.”

Palamon will acquire 49% of the company at an enterprise valuation of €80 million with a call option to acquire an additional 2% in May 2018. The sale agreement has arrangements in place for Palamon to acquire additional equity with Il Sole agreeing to retain a minimum 20% strategic stake in the company going forward.

Business School24 is a leading player in the tertiary education segment in Italy and provides professionally-oriented education and training.

Fabio Massimo Giuseppetti, partner of Palamon Capital Partners, says: “Business School24 is one of the most widely respected education brands in Italy and it is playing a key role in overcoming the structural disconnection between tertiary education and graduate employment. We are therefore delighted to be partnering with Il Sole 24 ORE to help accelerate growth in the provision of specialised vocational training and a pathway to the labour market for young Italians. We look forward to working with the talented management team and building out the platform over the years to come.”

Franco Moscetti, CEO of Il Sole 24 ORE, adds: “We are thrilled to be partnering with Palamon to accelerate the expansion of our education services across offline and online channels. Their track record in the education sector and understanding of the industry dynamics convinced us of their ability to successfully capture the market opportunity in Italy.”

Tombari D'Angelo e Associati, with Prof. Avv. Umberto Tombari and Avv. Cristina Brancato, acted as legal advisers.

The purchase, which was originally agreed in July 2018, and has since been approved by the appropriate regulatory authorities, will see the global FinTech company acquire 100% of the firm.

Under FNZ Group’s ownership, ebase will continue with its strategy to become the leading digital financial services partner in Germany, through sustained investment in technology and customer service.

Adrian Durham, CEO of FNZ Group said: “This is an important milestone for FNZ Group and reaffirms our commitment to becoming a leader in the provision of B2B digital wealth management technology for financial institutions and their customers globally.

“ebase is a well-established investment platform and leader in the digitisation of wealth management solutions, known for its performance in the German financial services market.

“We look forward to partnering with the highly-capable ebase team to grow their business in Germany and together expand the range of state-of-the-art technology platforms available to support wealth management.”

Kirkland & Ellis acted as legal adviser to FNZ and Preu Bohlig assisted with IP, IT and Data Protection related issues. Key individuals of Preu Bohlig who assisted with the transaction included Christian Breuer (Data Protection), Andreas Haberl (IP) and Daniel Hoppe (IT).

Based in northern Israeli town Yokneam, ADT develops and produces blades and machinery for the dicing of silicon-based integrated circuits, package singulation, and hard material microelectronic components. The company, which employs around 100 people worldwide, was founded in 2003 by a group of private investors who bought the dicing equipment and blade divisions of Singapore-based semiconductor company Kulicke and Soffa Industries Inc.

Tel Aviv-based law firm Barnea Jaffa Lande & Co. represented Neng Yang in the deal. ADT was represented by Be’er Sheva-based law firm Tulchinsky Stern Marciano Cohen Levitski & Co.

Fosun was founded in 1992 in Shanghai and is listed on the Main Board of the Hong Kong Stock Exchange. The company is a leading investment group with roots in China and a global foothold.

Founded in 1974 and headquartered in Fulda, Germany, FFT provides flexible automation turn-key solutions, customised engineering designs, and various smart factory solutions for renowned first-line original equipment makers (OEMs) in Germany, the USA, Japan, China and other countries. FFT also provides non-automotive solutions for clients in many countries including the USA, Sweden and Germany. FFT's solutions can enable full production and specific aspects of manufacturing. The group has the strong ability and potential to expand the use of its capabilities in numerous sectors outside of the automotive industry, as successfully proven during the business expansion into white goods in recent years. In 2017, FFT recorded revenues of over €850 million and employed over 2,600 people.

This acquisition of FFT supports Fosun's strategy of investing in companies which support "makers" and have strong market positions. Through this acquisition, Fosun significantly upgrades its capacity to offer new manufacturing solutions for its own portfolio companies such as Nanjing Nangang Iron & Steel United, Eurocrane and Zhejiang XCC Group.