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Humatica Ltd. was retained to advise Baird Capital on its acquisition of a majority interest in Collingwood Lighting, a leading designer and supplier of residential, commercial and exterior luminaires into the professional refurbishment and newbuild markets in the UK and France.
For more than 95 years, Baird has been a strong, stable and trusted financial partner across generations and through many market cycles.
According to OakNorth, James Benfield, Partner at Baird Capital, said: “The European lighting market is an exciting sector as lighting maintains its central position within intelligent and connected built infrastructure. Despite being founded almost five decades’ ago, Collingwood has managed to maintain its strong position through constantly innovating, alongside establishing long-term relationships with its customers.”
International law firm Taylor Wessing advised Baird Capital on the transaction. Humatica provided organisational due diligence services for this transaction.
Interview with Patrick Mina, Managing Partner at Humatica Ltd.
What are three boxes you must tick when undergoing organisational due diligence?
Our organisational due diligence approach assesses the capability of an organisation to take on and execute a significantly more aggressive and complex growth plan. It also assesses the organisation’s ability to adapt to the faster paced, numbers focused private equity environment.
The three boxes that must be ticked are that:
From your experience, how do you gain transparency on the behaviours which drive value growth?
Humatica has been conducting organisational assessments over the past 15 years and built up a proprietary database of behaviours and management processes that drive accelerated value growth. These are tested in structured interviews with management team members using a maturity model i.e. what good looks like for a company at that stage of evolution, in that type of industry, with that type of value creation plan. We also use targeted data analysis and psychometric assessments (where feasible) to gain further insights.
Post deal, we conduct a management process assessment survey for all employees which “heat maps” the organisation in terms of behaviours accelerating value growth across divisions, departments, functions and locations.
What was one lesson you learnt from working on this transaction?
Baird’s interactive due diligence approach ensures effective leveraging of the combined experience, understanding and skillset across due diligence providers and the deal team at key points in the process.
With a half-year report with a + 18.5% turnover, and an EBITDA of 30%, in sharp contrast with the general downturn in the automotive sector, Autostar, already a licensee for the brands Mercedes-Benz, Bmw, Smart, Mini and Maserati, extends its market by purchasing two business branches from Motorsport.
"Together with BMW Italia, we have embarked on a tortuous and delicate path to effectively manage the problems inherited from the Motorsport bankruptcy, with the desire to return to Treviso and Belluno a point of reference able to respond promptly to the needs of BMW customers, MINI and Motorrad. " - declares Arrigo Bonutto, Chairman of the Autostar Group.
Ponti & Partners, with Partners Luca Ponti and Francesca Spadetto, acted as legal adviser to the Friulian Autostar S.p.A. in the transaction for the acquisition of the two company branches of Treviso and Belluno from Bankruptcy of Motorsport S.r.l. (historic car dealership in the Veneto region), including sale and assistance contracts with BMW Italy.
Ponti & Partners provides assistance in all major areas of company law and in particular in the areas of M&A, commercial and corporate law, banking, financial and bankruptcy law, as well as Italian and international contract law.
Luca Ponti, Founding Partner at Ponti&Partners
Please tell me about your involvement in the deal?
We were involved in the Autostar operations since the very beginning, which was when Motorsport S.r.l. was about to apply for composition with creditors, after ongoing discussions failed to deliver any result.
After the unsuccessful alternative procedure which led to Motorsport bankruptcy, we have assisted Autostar S.p.A. in liaising with the Bankruptcy Trustee and in presenting an irrevocable offer to purchase for the two branches of Treviso and Belluno. This was followed by the competitive procedure to the transfer of the two branches, which resulted in appointing Autostar as successful tenderer. Our assistance has continued until the stipulation of the final contract of purchase for the two branches of the firm, on 31st July 2018.
Why is this a good deal for all involved?
I believe this agreement is beneficial for both parties, from different points of view. First of all, the agreement with Autostar has obviously enabled to receive remuneration and Autostar, on the other hand, has been able to expand its presence in the Triveneto region, confirming its leadership, already acquired over the years as dealer for the brand BMW, among the others.
However, there are further aspects which need to be considered. I am referring to the employees of the two branches, who have been now hired by Autostar: these workers have not only kept their jobs, but also gained a new professional relationship with a very stable firm in the North-East area. Moreover, the bankruptcy creditors will be satisfied with the purchase proceeds.
What challenges arose? How did you navigate them?
There were a lot of difficulties, as usual in these kinds of operations. When a failing or, as in this case, an insolvent firm is involved the issues are numerous and different from the ones which characterise in bonus companies.
I have already mentioned the relationship with the employees, including of course the previous debts towards them. Another issue is that bankruptcy procedures requires urgency, which often implies little time for the buyers to carry out relevant investigation and due diligence.
Acquisitions from insolvent subjects require a very particular approach and Ponti & Partners has acquired a significant expertise also in this sector.
Vivonio Furniture GmbH expands its portfolio of custom built-in cabinets by acquiring Denmark-based KA Interiør S/A and strengthens its presence on the Scandinavian furniture market. The Danish company is one of the largest private label manufacturers of sliding door cabinets in Scandinavia. Together with the Dutch subsidiary Noteborn B.V., acquired in 2017, the furniture holding company from Munich continues to consolidate its leadership in Northern and Central Europe.
The majority shareholders at Vivonio are funds controlled by the European equity capital investor Equistone Partners. A minority stake is held by the management itself and by investment funds advised by Orlando Management AG.
TVC Advokatfirma in collaboration with Partner Rune Tarnø for the Vivonio Furniture Group in connection with the acquisition.
In May, McDermott International, Inc. (“McDermott” or the “Company”) (NYSE:MDR) announced that it has completed its combination with Chicago Bridge & Iron Company N.V. (“CB&I”), creating a premier, fully integrated provider of technology, engineering and construction solutions for the energy industry.
“This is an exciting day for McDermott,” said David Dickson, President and Chief Executive Officer of McDermott. “The combination of McDermott and CB&I brings together a global upstream and subsea engineering, procurement and construction company with an established downstream provider of industry-leading petrochemical, refining, power, gasification and gas processing technologies and solutions—creating a company that spans the entire value chain from concept to commissioning. Together, we have the integrated technology, engineering expertise, construction experience and global reach to design and build the energy infrastructure of the future.”
In accordance with the terms of the business combination agreement, and as a result of the approval by McDermott stockholders of the 3-to-1 reverse stock split resolution, CB&I shareholders will receive 0.82407 shares of McDermott common stock for each share of CB&I common stock tendered in the exchange offer. As a result of the combination, CB&I common stock will no longer be listed on the New York Stock Exchange.
CVC announced that a consortium of funds (the "Consortium") led by CVC Fund VII has agreed to buy the holding company that owns a majority interest in Recordati.
Andrea Recordati, CEO, said: "I believe that this is a great outcome for the company and its employees who will benefit greatly from having CVC as a partner. In the process of finding the best partner to take Recordati forward, it was important to find a party that would allow Recordati to remain independent, with continuity for management and employees, and accelerate its growth strategy as a leading global consolidator in the pharmaceutical industry. I am very pleased to be working alongside CVC in accelerating Recordati's global expansion. I am personally reinvesting alongside the Consortium as I believe in and support Recordati."
The transaction is structured as a fully financed acquisition by the Consortium of the family’s holding company FIMEI S.p.A for an Enterprise Value of €3.03bn. FIMEI owns 51.8% of Recordati S.p.A., implying a 100% equity value for Recordati S.p.A. of €5.86bn, equivalent to €28.00 per share.
Saudi Arabia’s football team Al-Hilal approached the Portuguese market in order to secure a coach that will lead Saudi Arabia’s premier club to a third AFC Champions League title. With a year left on his contract to Sporting, Jorge Jesus opted to join Al-Hilal amid financial and political problems in Lisbon, and even though Jesus speaks little English, Jesus won the league three times at Benfica, and led the club to back-to-back Europa League finals. It was understood that a salary in excess of €6 million has been made available for the right candidate.
We speak to Luis Miguel Henrique, who was involved in negotiating the contract. The signing of the contracts took place in Zurich and Dubai. Miguel Henrique had personally and directly accompanied Jorge Jesus throughout the process, and even maintained such follow-up after the formalisation of the agreement and when approaching the media. Miguel Henrique’ colleague Manuela Glória dealt with the agreements in Lisbon with Sporting in the meantime.
In this insightful interview he speaks on the unique challenges Sports Law presents, how he gets through them, he reveals more about this transaction and how Saudi-Portuguese investment relations are progressing.
Interview with Luis Miguel Henrique at Macedo Vitorino & Associados
Are there any unique challenges presented in Sports Law transactions?
Although the world of sport law and in particular transfers of players is duly regulated by FIFA internationally, the figure of the coach already has greater specificity, which cannot fail to be taken into account. Moreover, when we work in an operation involving markets such as Saudi Arabia, the main challenge is particularly cultural.
When faced with international transactions, as in this case, the challenges are always greater, since each country has its own legislation, as a rule, which is very specific and appropriate to the culture and socioeconomic environment of each nation. It is also necessary to make the various laws and interests compatible at stake, never being able to overlook that these transactions are based on people, whose expectations - personal and professional - have to be also assured in the macro business plan. We risk saying that, among all the challenges that make up the sports transactions, it is the reconciliation of the expectations of the various parties involved that brings the greatest challenge and that makes each transaction a unique business.
How do you overcome these challenges?
In order to overcome the challenges present in each transaction, we must first try to know as closely as possible all aspects of the business environment, in particular, those related to the specific legislation of each country and how to harmonize the standards in comparison - which are often quite different and elaborated according to different basic principles.
Several years’ experience with the UAE market helped particularly in this first operation with Saudi Arabian clubs.
After having an idea of these surroundings, it is necessary to caution all legal aspects, according to these specificities, reconciling them, still, with the expectations of each negotiating player - as mentioned above. Above all, it seems to us that the most important thing,in order to overcome all the challenges, is to know our customer well and to define together, in a clear way and in relation to each business, what goals it intends to achieve, thus helping to manage their expectations.
How did you and your team work around the apprehensions or queries Jorge Jesus had in regard to this move?
Our team, in particular me and Dra. Manuela Glória, have been following coach Jorge Jesus since 2000, having followed the transactions he has made in recent years. The several years of work we have in common gave us deeper knowledge of the Client, of his needs, desires, characteristics and ambitions, thus we can anticipate some of his fears and doubts. Based on this same knowledge, we tried to get answers to some of the apprehensions that were eventually manifested by Mr. Jorge Jesus, so that we could quickly and accordingly to the client's profile, reassure him and provide him with all the information needed.
What are Saudi-Portuguese relations like, in terms of investment? Do you think more could be done to ensure a stronger connection between the two jurisdictions and their investment scope?
In general, we have seen a closer relationship between the two countries, especially in private terms; in recent years there has been a progressive increase of Portuguese exporting companies to the Saudi market, with Saudi Arabia occupying a place as a supplier in Portugal.
Business opportunities - especially from Portuguese companies in Saudi Arabia - exist and multiply from year to year (much as a result of the progressive opening of the Saudi economy). We are faced with two countries with very different socio-economic realities: Saudi Arabia is the largest economy in the Middle East, presenting a demanding and sophisticated market; on the other hand, Portugal, although struggling (successfully) to present itself as a more competitive market, is still rising from a strong economic and financial crisis that has greatly shaken investment in recent years.
However, these differences will not be an impediment to continued demand from one side to the other - examples of this are the initiatives undertaken by public and private organisations that aim to increase bilateral trade and investment between the two nations.
In order to strengthen relations between the two countries and boost mutual investment, it will be necessary to continue the good work that has been developed, especially showing investors the potential of each country and what is best done in each one.
I also understand that sport and football,in particular for a country of small geographical and population size such as Portugal, may be the best tool of "economic diplomacy" at the service of our nation and economic agents.
Nowadays when we talk about Cristiano Ronaldo, José Mourinho or even the fact that Portugal won the European Championship in France in 2016, is a way to value Portugal and to put its brand on a global level. Sport in general and Portuguese football in particular, are in fact the best ambassadors of our country and our companies.
Did you learn anything new from working on this transaction?
All transactions and business teach us something and this was no exception. In fact, the fact that it was a Country Club with a culture so different from ours was enriching, and it also enabled us to discover and learn about our curiosities on the culture and the Saudi people.
The geostrategic importance that football as a brand affirmation of a nation and its people may have was perhaps the last of the teachings received in this operation.
The information age is in full bloom. People live their lives on social media. They post all of their life’s experiences in the open society for all to see. The impulse is compelling, and many succumb to the lure without giving it a second thought. And lawyers are no different. Below Mark Fulks of Baker Donelson explains the ins and outs of client confidentiality in today’s digital age.
We post our trials and tribulations, our victories, our daily observations, and our “representative cases,” often without asking ourselves if we should. After all, social media self-promotion has become second nature.
ABA Model Rule 1.6 prohibits lawyers from revealing information relating to their representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation, or the disclosure fall within certain exceptions. The exceptions generally allow lawyers to reveal information to prevent the client from committing a crime that will result in substantial injury or to mitigate or rectify the injury, to secure legal advice about the representation, to allow the lawyer to establish a claim or defense in a proceeding related to the representation, to comply with any other law or a court order, or to review potential conflicts of interest. Rule 1.6 does not include an exception for information that is generally known or already revealed by the public record. Thus, lawyers who think they are free to post to Twitter, Facebook, LinkedIN, and Instagram, their courtroom exploits on behalf of their clients should think again.
This issue was recently addressed in Formal Opinion 480, published by the American Bar Association’s Standing Committee on Ethics and Professional Responsibility on March 6, 2018. In that opinion, the committee explained that the rule of confidentiality is not limited to matters that fall within the attorney-client privilege but extends to all information the lawyer possesses about the representation notwithstanding the public nature of the information. To be sure, the committee explained that “information about a client’s representation contained in a court’s order ... although contained in a public document or record, is not exempt from the lawyer’s duty of confidentiality ....” (p. 3). Note that the committee took pains to emphasis the word not. Moreover, the committee noted, “Rule 1.6 does not provide an exception for information that is ‘generally known’ or contained in a ‘public record.’” (Id.) More to the point, the prevalence of social media does not change the lawyer’s obligations under the rules of professional conduct.
The challenges posed by this rule are apparent. Most lawyers assume that there is an exception for public information. Why would a lawyer be prohibited from discussing the contents of a judicial order that is itself published on the Internet? Consider the following scenario: Two lawyers walk into a bar. One just successfully argued a motion for summary judgment that involved several unique facts and novel points of law. The other observed the argument and, being quite impressed, offered to buy the first a drink. While ruminating over the day’s events, the lawyers pull out their mobile phones, dial up their favorite apps, and post a brief snippet of commentary about the motion hearing. The first writes, “I am pleased to report that I just successfully argued a motion for summary judgment on behalf of my client on a novel point of copyright law. A broken bough cannot own a copyright. The case will be dismissed.” The second writes, “I just watched Attorney John Doe argue a motion for summary judgment on behalf of his client XYZ Corp. in a dispute with ABC Corp., an environment rights advocacy group, over the copyright to a photograph inadvertently taken when a tree branch fell on a camera’s shutter release button. The copyright does not belong to mother nature.” Under these circumstances, the first lawyer’s post, despite being cryptic, contained information related to the client’s representation. Thus, the first lawyer violated Rule 1.6. The second lawyer’s post, though much more specific concerning the first lawyer’s representation, did not implicate Rule 1.6. While this scenario will leave most lawyers nonplussed, the ABA's Standing Committee on Ethics and Professional Responsibility is unfazed by such practical quandaries.
The most notable application of Rule 1.6 is to publications and speaking engagements. If a lawyer tells a war story drawn from an actual case to illustrate a point during a seminar and that lawyer does so without the client’s permission, the lawyer may violate the rule. In this context, as in others, a lawyer may gain cover from the rule by pitching facts as hypotheticals if the discussion is vague enough to shield the facts from discovery.
The moral of the story is this: A lawyer may not talk, tweet, post, or engage in any other discourse or commentary about public information that relates to the lawyer’s representation of a client, even if the rest of the world remains free to discuss and disseminate the information at will.
The European Securities and Markets Authority (ESMA) has agreed to renew the prohibition of the marketing, distribution or sale of binary options to retail clients, in effect since 2 July, from 2 October 2018 for a further three-month period. ESMA has also agreed on the exclusion of a limited number of products from the scope of the measure.
ESMA has carefully considered the need to extend the intervention measure currently in effect. ESMA considers that a significant investor protection concern related to the offer of binary options to retail clients continues to exist. It has therefore agreed to renew the prohibition from 2 October.
During its review of the intervention measure, ESMA considered the specific features of binary options currently within the scope of the measures. Certain binary options were found to have specific features which mitigate the risk of investor detriment, namely; they are sufficiently long-term (at least 90 days); are accompanied by a prospectus; and are fully hedged by the provider or another entity within the same group as the provider. ESMA considers that a binary option that benefits from the cumulative effect of these three critieria is less likely to lead to a significant investor protection concern.
In addition, products that at the end of the term have one of two predetermined pay-outs, neither of which is less than the initial investment of the client, will be excluded. The pay-out for this type of binary option could be the higher or lower one but in either circumstances the investor would not lose money compared to their total investment. As the investor’s capital is not at risk these products should be explicitly excluded.
Hence, ESMA agreed to exclude from the scope of the renewal the following binary options:
(a) the term from issuance to maturity is at least ninety (90) calendar days;
(b) a prospectus drawn up and approved in accordance with the Prospectus Directive (2003/71/EC) is available to the public; and
(c) the binary option does not expose the provider to market risk throughout the term of the binary option and the provider or any of its group entities do not make a profit or loss from the binary option, other than previously disclosed commissions, transaction fees or other related charges.
ESMA will continue to keep these products under review during the prohibition period. The renewal was agreed by ESMA’s Board of Supervisors on 22 August 2018.
Next steps
ESMA intends to adopt the renewal measure in the official languages of the EU in the coming weeks, following which ESMA will publish an official notice on its website. The measure will then be published in the Official Journal of the EU and will start to apply from 2 October 2018 for a period of three months.
(Source: ESMA)
Total EU net migration to the UK has more than halved since the referendum and the estimate of net migration of citizens from Poland and other A8 countries was negative for the first time since the expansion of the EU, latest data from the Office for National Statistics has shown.
A8 net migration to the UK for the year ending March 2018 was estimated at -2,000 per year, though margins of error mean that this number is not statistically different from zero.
There was also a decline in both A2 migration (from Romania and Bulgaria) to 38,000 per year – the lowest level since 2014, when these countries got full access to the UK labour market. Net migration of EU15 migrants – from the older EU member states such as Germany, Italy and Spain – fell from 73,000 in the year to March 2017 to 45,000 in the same period this year.
The fall in net migration includes a fall in net migration of EU15 citizens coming to the UK for a definite job – one of the groups considered most economically beneficial to the UK. In all, EU net migration data shows a decline by more than half from its peak of 189,000 in the year leading up to the referendum, reaching 87,000 in the year to March 2018.
The data in theory show non-EU net migration to be almost three times higher than EU at 235,000 – however the Migration Observatory at the University of Oxford has raised “real doubts” about the accuracy of the non-EU net figures.
Madeleine Sumption, Director of the Migration Observatory at the University of Oxford said: “The UK has clearly become a less attractive country for EU migrants since the referendum. The lower value of the pound means that workers coming here for higher wages are getting less than they were in the past, and economic conditions in many of the key EU countries of origin have improved a lot over the past few years. Uncertainty about the implications of Brexit may have played a role.”
The new figures come at a time of uncertainty for UK migration statistics. The ONS has started a programme of work to improve the quality of the statistics, but these developments are mostly not yet reflected in today’s figures. Significant issues have been identified with measurement of non-EU student migration but it is not yet clear to what extent problems also exist for other types of migration.
Sumption added: “We have real doubts about the accuracy of the non-EU net migration estimates. Other data sources – like the Labour Force Survey - do not support the idea that non-EU citizens are currently contributing so much to net migration.”
The Migration Observatory has argued for some time that the International Passenger Survey does not deserve the special status that it has acquired in the UK’s political debate, and that by also focussing on other data sources the quality of debate on migration could be improved.
(Source: Migration Observatory)
Below Lawyer Monthly hears from top family law specialist at Excello Law, Lindsay Yateman, who discusses the intricate case of Owens Vs Owens and the concept of the UK’s legal system being confined to following the law rather than sense when it comes to judgements.
The case of Owens v Owens is unusual. Not because Mrs Tini Owens is a woman of 68 who wants to divorce her 80 year-old husband, Hugh: after all, in 2016, there were 114,000 divorce petitions in England & Wales. What marks out the Owens case is that Mr Owens contested the divorce - one of 800 such cases a year, and one of just 17 that proceeded to a final hearing. But more than that, the Owens case was especially unusual because it was the only one contested divorce to reach the Supreme Court, which it did in July.
Mrs Owens’ grounds for divorce were simple. Following a marriage that had lasted 40 years, she was unhappy in a loveless union which had broken down. And on that point, the appeal failed. As a result, the practical affect of the court’s majority ruling is that she must stay married to a man whom she wants to divorce; she is handcuffed by the law. The supreme court judges “reluctantly” told her that she had to remain as Mr Owens’ wife because a joyless marriage is not adequate grounds for a divorce if one spouse refuses to agree. Mr Owens’ lawyers argued that his wife has failed to prove that the marriage has broken down irretrievably.
In what the media labelled a “lamentable case” which showed our marriage laws to be “archaic”, the decision of five supreme court judges upheld earlier rulings by a family court and the court of appeal. “The appeal of Mrs Owens must be dismissed. She must remain married to Mr Owens for the time being,” the supreme court judge Lord Wilson said in his ruling. “Parliament may wish to consider whether to replace a law which denies to Mrs Owens any present entitlement to a divorce in the above circumstances,” he added with judicial understatement.
It was not a sudden breakdown. That had happened thirteen years ago and the couple finally separated when Mrs Owens moved out of the family home in 2015. There is no doubt, therefore, that the judges found the case troubling when they dismissed the appeal, albeit on a strict interpretation of the law, even though it was manifestly obvious that the marriage was long since over. In delivering his judgment, Lord Wilson added: “the Family court takes no satisfaction when obliged to rule that a marriage which has broken down must nevertheless continue in being”.
The key point in this strict interpretation of the law is that the petitioner when relying on unreasonable behaviour must show “not that the behaviour is unreasonable but that the expectation of continued life together should be unreasonable.” In practice, this interpretation has not been used in divorce cases throughout Britain for many years. Most petitions succeed on behaviour based on only a few, often fairly ‘mild, non inflammatory’ examples. They succeed because in most cases the respondent does not elect to contest them since they also wish to divorce.
Resolution, the professional group for 6500 family lawyers intervened in the Supreme Court hearing to make submissions that the law should be changed. They have long campaigned that the Matrimonial Causes Act 1973 should be amended to enable people to obtain a divorce on a ‘no fault’ basis. But as the court said, only Parliament can change the law. With the impact of Brexit, Family law reform is not high on the government’s agenda. In the meantime, Mrs Owens will have to stay married to her husband until 2020, at which point they will have been separated for long enough to justify the divorce under current legislation.
