Deal of the Year: Norwegian Infront acquires VWD group from Carlyle

This transaction was labelled as Lawyer Monthly’s Deal of the Year. Originally featured in our June 2019 issue, we decided to get in touch with the legal team involved in the transaction and discuss the lessons learnt and what they are looking out for in 2020.

Earlier this year, Global investment firm The Carlyle Group (NASDAQ: CG) had announced that it agreed to sell vwd Vereinigte Wirtschaftsdienste GmbH (vwd), a European provider of software solutions for investment professionals, to Infront ASA (Infront).

In this new strategic partnership, vwd’s comprehensive offering covering data & feed, portfolio & advisory, regulatory & calculation and publication & distribution solutions were complemented by Infront’s best-in-class market data and trading solutions. Vwd were, therefore, able to continue pursuing its unified platform product strategy with Infront adding a highly sophisticated front-office trading product suite. Both vwd and Infront customers were set to benefit from the two companies combining their sector-defining capabilities across regulation, private wealth management and market data.

Interview with Thomas G. Michelet, Partner at Advokatfirmaet Selmer AS

 Overall, the transaction was one of the more complex capital markets related acquisitions during recent years.

What lessons were learnt from the transaction?

The transaction gave an opportunity to demonstrate and strengthen Selmer’s ability to provide expert cross border advice and display how we offer global-standard counsel in relation to legal and regulatory issues involved in major cross-border deals. Our position as lead counsel posed a great opportunity to show our firm’s ability as project leader and to follow our Norwegian clients abroad.

We have built further on our track record as a recognised project leader and trusted adviser in complex international transactions.

What challenges arose? How did you navigate them?

Overall, the transaction was one of the more complex capital markets related acquisitions during recent years.

The acquisition agreement was announced early April without financing conditions, although the financing was obtained through a subsequent capital markets bond and rights issue. A EUR 103 million bond issue was completed late April and a subsequent NOK 240 million rights issue in late June. Additionally, the acquisition was conditional upon regulatory clearance from the German financial supervisory authority. Key commercial considerations were to ensure continued stable trading in the Infront share and deal-certainty towards closing that occurred more than three months after the announcement.

We navigated the acquisition and the related capital markets financing through a series of tailor-made agreements. Inter alia, guarantee agreements were tailored for both the bond issue and rights issue as stand-by commitments well in advance of launching the application periods. In retrospect, the structure proved solid and led Infront to secure the necessary financing.

How did this deal shape the rest of the investment scene in 2019 and what are you looking out for in the next year?

The transaction was a landmark deal for Infront, that acquired a target significantly larger than itself, and set the stage for increased M&A activity in the Norwegian market following a volatile background in the world economy. It was definitely one of the brow-raising transactions of the first half of 2019.

We believe European markets will continue to experience volatility going into 2020, creating opportunities for fast movers within M&A. On a longer horizon, there are many IPOs that have been put on hold in anticipation of market conditions levelling out.

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