UPayments Major Share Transfer Deal
Upayments is a prominent online payment solutions provider transforming business financial transactions with digital payment services tailored for businesses and entrepreneurs, founded in 2016. They have had significant success in the fintech industry which is consolidated by this sale leading them into a thriving industry as a leading innovator.
Meysan Partners advised UPayments in the sale of 51% of the share capital to the National Bank of Kuwait.
Q&A with Dr. Abdulwahab Sadeq
Dr Sadeq, can you tell us more about your teams’ role during this sale and what the priorities were to ensure success for the client?
As a counsel for the sellers, my team and I played a key role in the sale of a 51% stake in Upayments to NBK. Our responsibilities encompassed negotiating and finalizing the transaction documentation, which included the Share Purchase Agreement, Shareholders Agreement, and various ancillary agreements integral to the sale. Additionally, we are involved in closing the transaction, meticulously finalising the conditions precedent, and ensuring all closing deliverables were in order, such as obtaining CPA approval.
To guarantee the success of this transaction, we prioritised the efficient allocation of tasks within our team, meticulous attention to every detail in our deliverables, and the strategic utilization of Meysan’s resources. These priorities were critical in navigating the complexities of the sale and achieving a successful outcome for our client.
I was joined on this project by Michel Ghanem (Partner) and Neyla Rahal (Counsel).
As Partner at Meysan law firm, how does your expertise in M&A come in useful for your team and the clients, does this specialty create a pattern of processes you repeatedly take or does each case elicit a change in approach?
My proficiency in Mergers and Acquisitions substantially increases the contribution I make to both our team and our clients. The depth of my experience in managing intricate deals, along with my honed negotiation and persuasive skills, plays a crucial role in securing successful outcomes in transactions. This expertise is not just about applying a set of fixed procedures; it’s about understanding the unique dynamics of each transaction.
Indeed, while there are best practices and methodologies that are commonly applied in M&A, the reality is that each case requires a bespoke approach. This customization is dictated by a variety of factors, including the client’s specific needs and objectives, the stance and expectations of the counterparty, the intricacies inherent in the transaction, and the distinct regulatory and legal requirements of each deal. My role, therefore, involves not only leveraging my expertise but also adapting our strategy to meet the nuanced demands of each situation effectively, ensuring that our client’s goals are achieved in the most efficient and beneficial manner possible.
Would you elaborate on what legal counsel is needed when working with the seller that is different to working with the buyer in M&A cases, what aspects are necessary to highlight so the clients make valuable decisions?
When representing a buyer in M&A transactions, the complexity of the role significantly increases due to the necessity of conducting a comprehensive review of the target company’s legal and financial standings. This ensures that the transaction documents meticulously include all necessary warranties and specific indemnities to safeguard the buyer’s interests.
Conversely, while acting on behalf of the seller presents its own set of challenges, it is an equally critical role. The sale process offers a prime opportunity to maximize shareholder value. Our responsibility involves strategically showcasing the business’s value to optimize the sale price. A key challenge we address for sellers is minimizing potential liabilities, including managing disclosures against warranties. We employ our negotiation expertise to effectively protect our client’s interests within the transaction documents, ensuring a balance between achieving a favourable sale outcome and limiting future obligations.
In both scenarios, the aim is to provide tailored legal counsel that empowers our clients to make informed, value-driven decisions. This involves a nuanced understanding of each party’s priorities and leveraging this insight to navigate the complexities of M&A deals successfully.
What is your process of due diligence to assess any legal risks for your law firm and the client when working on projects?
To safeguard both Meysan and our clients from potential legal risks, we adhere to a meticulous due diligence process. Initially, for Meysan’s protection, we conduct thorough conflict and compliance checks on all involved parties using advanced software solutions. We ensure that no engagements are signed until these preliminary checks are satisfactorily completed. Additionally, our due diligence reports always incorporate disclaimers and assumptions to shield Meysan from liabilities regarding matters beyond our expertise or outside our qualified jurisdictions.
Regarding our clients, our approach to risk assessment is both detailed and client-focused.
We request comprehensive information and background from the client to gain a deep understanding of the project. This involves not only gathering extensive details but also discerning the project’s ultimate goals. Through this process, we evaluate the project’s feasibility and legality, ensuring compliance with relevant laws and regulations. This dual-layered due diligence strategy is fundamental to identifying and mitigating legal risks effectively, thus protecting both our firm and our clients throughout the course of any project.
What challenges did you face and how do you make sure your team is equipped to handle any problems which arise?
Navigating the complexities of a transaction, particularly the sale of shares with an adjustable consideration based on completion accounts and an earnout payment tied to specific milestones, presented several significant challenges. Foremost among these was the requirement to obtain approvals from multiple regulatory bodies, including the Competition Protection Authority, the Central Bank of Kuwait, and the Ministry of Commerce and Industry. Additionally, the difficulty of negotiating governance mechanisms and various transaction documents, alongside agreements critical for the company’s post-completion operations such as partnership, technology, and employment agreements, added layers of complexity to the process.
To effectively manage and overcome these challenges, our approach centres on thorough task allocation and strict adherence to timelines, ensuring that all milestones are met within the set deadlines. We leverage the full spectrum of Meysan’s resources, encompassing our legal team, administrative staff, and Public Relations Officers (PROs) who possess extensive experience in liaising with regulators and navigating the requirements of different administrations. This comprehensive strategy enables our team to address any arising issues promptly and maintain the momentum needed to drive the transaction to a successful conclusion.
You have developed specific specialisations, why did you choose these areas and how do remain up to date on all areas of knowledge so you can provide the best services for your clients?
My choice of specialisations in corporate law, particularly in mergers and acquisitions (M&A), capital markets competition and related financial services, was driven by a keen interest in the dynamic nature of these fields and the significant impact they have on global business practices. These areas are not only intellectually challenging but also offer the opportunity to accelerate transformative business transactions that can redefine markets and industries. My passion for navigating complex legal landscapes and contributing to essential business decisions has been a guiding force in this choice.
Staying current in these rapidly evolving fields requires a dedicated, multi-faceted approach. I regularly engage with continuing legal education programs and attend industry conferences to keep abreast of the latest developments and trends. Participating in professional networks and forums allows for the exchange of insights and experiences with peers, further enriching my understanding and approach to practice. Furthermore, I maintain an active engagement with academic literature and legal precedents, ensuring a deep and understanding of the legal frameworks governing M&A and corporate activities.
This commitment to ongoing education and professional development is essential for providing the highest level of service to our clients. It enables me to offer informed, strategic advice that aligns with the latest legal standards and market practices, ensuring that our clients’ transactions are executed efficiently and effectively, with a keen awareness of both opportunities and risks.
Do you offer much in the way of support for the client once they have made the sale, how do you continue this relationship in a way that assists the client with continuing success?
Our commitment to our clients extends well beyond the closing of a transaction.
My team and I remain readily available to provide ongoing support and legal counsel as new needs or issues arise post-sale. This includes offering advice on any requested amendments or addressing unforeseen challenges that may emerge. Moreover, we leverage our extensive network and connections to facilitate any additional services our clients may require, particularly in jurisdictions where we maintain a presence. Our goal is to foster a lasting relationship with our clients, one that contributes to their continuous success by ensuring they have access to comprehensive legal support and resources tailored to their evolving needs.
How has the client prospered post-deal, how has Meysan Partners counsel provided them with the resources to thrive after this sale?
In the period following the deal, our clients in general have seen notable advancements, largely attributed to the strategic legal frameworks put in place by Meysan. We carefully drafted and negotiated a suite of agreements designed to bolster the client’s operations and ensure its prosperity post-sale. This included a shareholders agreement that establishes a robust governance structure and management approach for the company, safeguarding the seller’s interests in the process. Additionally, we facilitated a partnership agreement that underpins the cooperation between the buyer and the seller. This agreement is pivotal in fostering the development of the company’s technology and products, as well as expanding the customer base through mutual referrals. Through these targeted legal interventions, Meysan has equipped our client with the essential resources and frameworks to thrive in the post-sale environment, ensuring a smooth transition and a foundation for sustained growth.
