June was a month of intensive capital markets activity with a high degree of innovation. Once again, high-yield debt shop Cahill Gordon & Reindel led the way on many of the most important deals. Highlights included deals illustrating how capital markets offerings increasingly complement corporate transactions, providing liquidity at a critical juncture before, during, or after an acquisition, divestiture, or joint venture. Cahill represented TriMas Corporation, a Michigan-based engineered and applied products maker, in a spin-off its Cequent businesses, in the form of a new company called Horizon Global Corporation, to TriMas shareholders. The law firm advised the new entity in relation to a $200 million term loan facility and an $85 million asset-based revolving credit facility. Cahill also represented TriMas in an amendment of its existing credit facilities, a $500 million senior secured revolving credit facility and a $275 million senior secured Term Loan A facility. J.P. Morgan spearheaded the refinancing.
In a separate transaction, Cahill took the lead as counsel to Wells Fargo in a $425 million credit facility for Crown Media, for the purpose of financing existing debts. The law firm also represented the arrangers, including The Bank of Nova Scotia, Citigroup Global Markets, Merrill Lynch, Deutsche Bank, and PNC Capital Markets in relation to a $2.3 billion credit facility for specialty chemical firm Ashland, again for the purpose of refinancing existing arrangements.
Not to be outdone, Davis Polk & Wardwell acted as counsel to Morgan Stanley in a $2.9 billion senior notes offering, and advised Devon Energy Corporation in a $750 million notes offering. Davis Polk was also highly visible on the equity side in June, acting in a deal providing a further illustration of capital markets’ close and intricate relationship to other transactional areas. The firm acted as counsel to the joint lead arranger, bookrunner, and administrative agent in $650 million of credit facilities for Energizer SpinCo. The proceeds were intended to finance a payment to Energizer Holdings, or a subsidiary, as part of the spinoff of the borrower’s household products units.
In another major deal on the equity side, Ropes & Gray advised Canadian retailer DAVIDs TEA in an IPO of 5,865,000 shares of common stock valued at $19 per share.
On the M&A front, June saw heated competition among firms known for their institutional relationships with the global leaders of private equity.
Simpson Thacher & Bartlett played a commanding role in transactions with a private equity component, advising Blackstone on Zimmer Holdings’ $14 billion purchase of Biomet from Blackstone and from fellow private equity sponsors KKR, TPG, and Goldman Sachs Capital Partners. Kirkland & Ellis advised Biomet and Clearly Gottlieb Steen & Hamilton had a role as advisor to the private equity consortium. Simpson Thacher also represented an investment fund affiliated with Pamplona Capital Management in the purchase – for an undisclosed amount – of Precyse Solutions from Altaris Capital Partners and NewSpring Capital.
Simpson Thacher was not the only firm across the table from Kirkland & Ellis on a transformative private equity deal in June. Kirkland played a crucial role as advisor to KKR in an agreement to acquire C.H.I. Overhead Doors, from West Coast-based private equity shop FFL. Willkie Farr & Gallagher represented both C.H.I. and FFL.
Not all takeover bids in June were welcome. Cravath Swaine & Moore advised Cigna Corporation and the Williams Corporation in two matters involving unsolicited takeover bids. In the case of Cigna, Cravath represented the client in addressing a non-binding proposal from Anthem to acquire Cigna for $184 per share. Cigna’s board of directors rejected the bid. Likewise, Cravath client Williams announced that its board of directors said no to an unsolicited proposal (from an undisclosed party) to purchase Williams for $64 per share.
São Paulo-based firm Demarest advised Banco Bradesco BBI, BB Banco de Investimento, Banco Citibank and Banco Itaú BBA on the R$675 million public offering of agribusiness receivables by Gaia Agro Securitizadora. Thiago Giantomassi led the team that completed the offering. Demarest also advised Concessionária Move São Paulo on a R$1 billion trains and other rolling stock materials supply agreement with Alstom Brasil Energia & Transporte for the construction, operation and maintenance of Line 6 (Orange) of SP Metro. Claudio Mattos, Fabio Celli and Renato Poltronieri led the team.
Also in Brazil, Sergio Bronstein led the Veirano Advogados team that advised Harald on Fuji Brazil’s R$596 million acquistion of 83.33% of its shares. Mattos Filho advised the buyer with a team led by Rodrigo Ferreira Figueired. Veirano also counseled the Inter-American Development Bank on a $125 million loan to Brazilian Securities Companhia de Securitização. Roberto Rudzit led that team.
In Chile, Santiago-based firm Cariola Díez Pérez-Cotapos, through a team led by Sergio Díez, advised Empresas Públicas de Medellín on the $965 million acquisition of Aguas de Antofagasta, a provider of drinking water and sewage disposal in northern Chile. Also based in Santiago, Guerrero Olivos advised Compañía Minera del Pacífico on the $100 million financing of the Productora copper project. Roberto Guerrero and Pedro Lyon led the team.
In Mexico, a Galicia Abogados team led by Manuel Galicia and Ignacio Pesqueira advised Eli Lilly on its $5.4 billion acquisition of Novartis’s veterinary product assets in Brazil, Mexico and Colombia.
Panamanian firm Arifa advised Banco General, Bank of Nova Scotia and Global Bank, on a $150 million bridge loan to Construtora Norberto Odebrecht for the construction of the new South Terminal of Tocumen International Airport.
Up in Peru, Lima-based firm Gallo Barrios Pickmann Abogados advised Minera IRL on a $70 million bridge loan from Corporación Financiera de Desarrollo and Goldman Sachs Bank. The loan is expected to finance the gold mining project Ollachea. Fernando Pickmann led the team. Estudio Hernandez & Cía advised the lenders.
Minter Ellison acted as Australian counsel to Uranium Resources, advising the client on the merger between it and ASX-listed Anatolia Energy, with the aim to create a leading uranium developer in order to fast-track uranium production at the Temrezli uranium project in Central Turkey.
In the largest acquisition of an Australian company this year, Japan Post took over Australian logistics business Toll Holdings for $6.5 billion. Clayton Utz acted for Japan Post alongside Japanese firm Nishimura & Asahi and Simpson Grierson in New Zealand.
It has been a trend setting month in China. Amid a Chinese stock market rally, Guotai Junan Securities—one of China’s largest investment banks—is set for a $4.8 billion listing on the Shanghai Stock Exchange (SSE) in what will be the world’s largest IPO so far this year. While the underwriters did not engage external counsel, Haiwen & Partners advised the issuer.
In another landmark transaction, the Bank of China issued a $3.6 billion multi-currency bond, which is set to facilitate China’s One Belt One Road (OBOR) initiative and is the first four-currency bond offering from Asia. Linklaters and JunZeJun acted for the issuer, while Clifford Chance and Jingtian & Gongcheng acted for the joint global coordinators.
Cadwalader Wickersham & Taft advised UBS and HSBC as underwriters on the inaugural CHF250 million bond offering by Sinochem Offshore Capital Company, which was the first-ever Swiss Franc bond offering by a Chinese corporate issuer, and also the first CHF corporate bond issuance in the emerging markets globally since November 2014.
In the offshore market, Maples and Calder acted as Cayman Islands and British Virgin Islands legal counsel to Baidu in respect to its issuance of a $1.25 billion notes offering. Skadden Arps Slate Meagher & Flom acted as US counsel to Baidu, while Davis Polk & Wardwell acted as US counsel to the bookrunners.
In India, Freshly-split Cyril Amarchand Mangaldas together with Hogan Lovells and Allen & Gledhill represented SunEdison in its $650 million acquisition of Continuum Wind Energy, which was the largest in India’s clean energy sector and the result of the new Modi government’s focus on developing the country’s renewable energy.
AZB & Partners has been keeping itself occupied with M&A deals in the telecommunications sector, and advised Bharti Enterprises in the acquisition of shares held by Vodafone of Bharti Enterprises’ subsidiary – Bharti Infotel.
The Indonesian state has issued a landmark $2 billion sukuk, which is the country’s largest ever US dollar-denominated sukuk. White & Case advised the Republic of Indonesia while Clifford Chance acted for the lead arrangers.
Garuda—Indonesia's national airline—issued a landmark $500 million sukuk, which is the first ever corporate global sukuk out of Indonesia. Allen & Overy advised the issuer; Ogier acted as Garuda’s Cayman Islands counsel; and Linda Widyati & Partners and Clifford Chance advised a consortium of 15 banks.
In one of the largest sukuk sales of the past four years, the Malaysian government issued $1.5 billion worth of shariah-compliant bonds. Linklaters and Malaysian law firm Adnan Sundra & Low advised the government while the banks were advised by Clifford Chance with Zaid Ibrahim & Co (ZICOlaw) as Malaysian legal counsel.
Another significant transaction saw Malakoff successfully raising $769 million in Malaysia’s largest IPO in three years. Cleary Gottlieb Steen & Hamilton advised Malakoff with Albar & Partners advising on local law. Clifford Chance advised the joint global coordinators, while Adnan Sundra & Low acted as Malaysian counsel.
In one of the largest ever transactions in the semiconductor industry, San Jose and Singapore-based Avago Technologies – a chip maker in the semiconductor industry - acquired California-based Broadcom for $37 billion in cash and stock. Skadden Arps Slate Meagher & Flom advised Broadcom while Davis Polk & Wardwell advised Broadcom’s board of directors. Broadcom co-founder Henry Nicholas was advised by Morrison & Forester and Latham & Watkins acted for Avago.
Also DBS bank issued Singapore's first ever covered bond after setting up a $10 billion programme. Allen & Gledhill acted for DBS and Bayfront Covered Bonds—the special purpose vehicle and guarantor—on Singapore law.
Shearman & Sterling acted for Deutsche Bank and HSBC as the underwriters in the $200 million Formosa bond issued by Reliance Industries – the largest global energy company based in India. This was the first Formosa bond issued out of India and also the first issued by a global energy company.
June began in France with a high profile IPO as SPIE, a multi-technical electrical, mechanical and energy service company, sought to raise €1 billion listing on June 10. SPIE offered approximately 54 million shares, comprising 48 million new shares and six million existing shares, at a price of €14.5 – €17.5 each. Around 77% of the firm was previously held by private equity funds Clayton Dubilier & Rice and Ardian, as well as Canadian pension fund Caisse de Dépôt et de Placement du Québec. A team led by Thomas Le Vert and Philippe Herbelin of White & Case advised SPIE on the offering. Mayer Brown advised on the previous LBO in place, as well as the subsequent government arrangements.
In what was a very active month for White & Case in France, the firm also advised Peugeot on a final tender offer of €500 million, the team on this occasion was headed up by Cenzi Gargaro.
More work for White & Case on the capital markets front, saw them advise on a €506 million capital increase by consultancy firm Capgemini, as they sought to finance the acquisition of America IT company IGATE Corp. The firm advised a syndicate of banks including BNP Paribas, HSBC and Credit Agricole amongst others, as joint managers and book runners, on what was the largest ever accelerated private placement in France.
There was also significant activity in the telecom sector as French corporation Vivendi increased its stake in Telecom Italia by a further 14.9%. Costing the French company around €1 billion, the move came at the same time as Vivendi’s multi-billion dollar sale of Global Village Telecom in Brazil. Advising Vivendi in Paris were Darrois Villey Maillot Brochier, led by Marcus Billam, and Dominique Bompoint of Cabinet Bompoint. Roberto Cappelli and Andrea Aiello of Gianni Origoni Grippo Cappelli & Partners led the deal in Italy.
Germany’s drive to become carbon-neutral was boosted in June when the project financing for a 400MW off-shore wind park – Veja Mate - reached financial close. Highland Group Holdings, Siemens Financial Services and Copenhagen Infrastructure II fund agreed the financing, which had a total project investment of €1.9 billion, with a consortium of lenders including the German and Danish KfW export credit agencies, KfW and EKF respectively, and six commercial banks, with Commerzbank, Natixis, Banco Santander and Sumitomo Mitsui among them. Hengeler Mueller partners Jens Wenzel, Nicolas Böhm, Heinrich Knepper, Jan Bonhage and Martin Klein were part of a group advising Copenhagen Infrastructure Partners, which owns the Copenhagen Infrastructure II fund. CMS Hasche Sigle partners Holger Kraft, Christian von Lenthe and Marc Riede led a team advising Highland. Watson Farley & Williams partners Sven Fretthold and Malte Jorda headed a group assisting the lenders.
A notable private equity deal in the country was CVC’s acquisition of Douglas. The well-known domestic, cosmetics retailer, which had announced and begun plans to IPO before the sale, was partially owned by another buy-out firm, Advent, and partially by the Kreke family, which has maintained a shareholding. Press reports citing someone close to the deal valued it at around €2.8 billion. Freshfields Bruckhaus Deringer advised CVC, with Ludwig Leyendecker leading. Private equity specialist P + P Pöllath + Partners was counsel to the Kreke’s, with Wolfgang Grobecker at the helm. Hengeler Mueller assisted Advent with the sale and the proposed IPO. Partners Hans-Jörg Ziegenhain and Daniel Wiegand headed the team on the merger; Reinhold Ernst and Dirk Busch were in charge on the IPO. When the deal was an equity capital markets transaction, Clifford Chance and Milbank also had roles. The former for the banks, the latter for Douglas.
There were only a couple of deals to report from Switzerland in June, the first of which saw South African investment group Old Mutual sell insurance company Skandia Switzerland to Life Invest Holding. At this point the transaction is still awaiting regulatory approval, but when complete the deal will see Skandia’s CHF1.3 billion funds transferred for an undisclosed fee.
The deal was led by the head of Allen & Overy in Germany’s corporate insurance practice, Jan Schröder. Walder Wyss led the charge on Swiss law with a team including partners Markus Pfenninger and Alexander Nikitine.
Elsewhere in Switzerland one the country’s leading real estate investment companies, Swiss Prime Site, completed a rights offering. Over 98% of the company’s shareholders exercised their right and purchased CHF424 million in new shares, as the company pursued a capital increase. Partners Thomas Reutter and Till Spillmann of leading Swiss firm Bär & Karrer acted as council for the company.
In the UK M&A space one of the most high profile matters was Canadian property group Brookfield’s acquisition of Center Parcs from Blackstone. Center Parcs owns five holiday villages around the UK and is a well-known brand in the tourism sector. Mayer Brown acted for Brookfield on the deal with Freshfields Bruckhaus Deringer advising Blackstone and Travers Smith working for the management of Center Parcs.
GE’s global sale of its non-core finance business is producing work across the globe for a host of firms. In the UK and the European context a significant matter was the company’s sale of its European sponsor finance business to Sumitomo Mitsui Banking Corporation Europe for an estimated $2.2 billion. The deal is seen as a good opportunity for Sumitomo to expand its financing operations outside of its home market. Clifford Chance acted for GE Capital while Linklaters acted for Sumitomo.
Elsewhere in the market US based electronic measurement company Keysight acquired UK mobile tech developer Anite for £388 million. Simmons & Simmons advised Anite with Cleary Gottlieb Steen & Hamilton advising Keysight. Ashurst acted for financial advisor Goldman Sachs.
On the private equity side, US investor Clayton Dubilier & Rice acquired a stake in the St Albans based Motor Fuels Group (MFG) from Patron Capital for around £500 million. MFG is an automotive fuel retailer with 373 sites across Europe. Clifford Chance advised Clayton Dubliner & Rice, Travers Smith acted for Patron Capital and Pinsent Masons advised MFG.
In the capital markets there was a first for NewDay Cards as it undertook a public master trust securitisation of credit card receivables done for the purposes of refinancing. The deal is notable for being the first time in the UK that credit card, store card and instalment credit receivables have been combined in the same portfolio for securitisation purposes. Slaughter and May acted for NewDay Cards; Clifford Chance advised the joint lead managers and co-arrangers of the master trust securitisation; Allen & Overy acted for the senior note holders; while Carey Olsen provided Jersey advice to the receivables trustee.
In the equity markets Just Eat undertook a new share issuance as it looked to raise £450 million in funds for the proposed takeover of Australian company Menulog. Simmons & Simmons acted for the joint bookrunners and sponsor.
Baltic Region and Eastern Europe
After an intermittent start to 2015, the Baltic region picked up a head of steam in the run-up to the summer break. On the financing side, perhaps the most significant matter saw Norton Rose Fulbright, Tark Grunte Sutkiene, DLA Piper and Arendt & Medernach advising Mezzanine Management in providing a €23.3 million mezzanine financing to Mogo Finance, a non-bank car financing provider. Mogo Finance was advised on the matter by Eversheds Bitāns.
On the corporate side, one of the bigger deals involved the sale of the Nordic Cinema Group by owners Ratos and Bonnier Holding to fellow private equity group Bridgepoint for a total deal value of approximately €500 million. All three of Sorainen’s Baltic offices advised Bridgepoint on the deal, alongside Hannes Snellman, Wiersholm and Travers Smith. The team at Sorainen were also active in providing counsel to the Pigu Group on its sale of a 51% shareholding to the MCI.TechVentures 1.0 private equity fund. The latter was assisted by Tark Grunte Sutkiene.
Capital markets work has also been active. Borenius had a busy month, advising the 4finance Group as Finnish, Latvian and Lithuanian counsel in connection with a kr225 million (€24 million) high-yield bond issuance, issued within a framework amount of kr600 million (€64 million). The team also acted alongside Norwegian firm Thommessen, along with lawyers from Tark Grunte Sutkiene, on the issuance by Nelja Energia, an Estonian group, of a €50 million bond to be listed on the Oslo Stock Exchange. This deal was notable in that it was the first green bond issuance in the Baltics.
Despite ongoing challenges, there was also some activity in Russia this month. Egorov Puginsky Afanasiev & Partners, for example, advised on one of the first auto-loan securitisations in Russia, with Credit Europe Bank transferring a portfolio of car loans worth ₽12.5 billion (approximately €208 million at the time of the deal) to SFO Europa 14-1A. This was one of the first examples of such a deal on the Russian market. The firm also advised Bank ZhilFinance on the securitisation of mortgage assets.
In what is highly likely to be the biggest M&A transaction of the year in Croatia, British American Tobacco is acquiring Croatian cigarette manufacturer TDR for an estimated €550 million from Adris Group. The move is seen as an attempt by BAT to break into the Balkan market as TDR has operations in Croatia as well as Bosnia and Herzegovina and Serbia. Baker & McKenzie led for BAT with Wolf Theiss acting as local counsel in the three jurisdictions. Dentons advised Adris Group alongside local counsel Čačić & Partners.
An interesting and unprecedented deal for Ukraine was concluded in June. DTEK’s $200 million Eurobond restructuring saw the governing law documentation of its US high-yield bonds converted to English law so the company could use a scheme of arrangement to restructure the remaining bonds under an exchange offer. A team from Sayenko Kharenko led by Nazar Chernyavsky represented Deutsche Bank as arranger on the deal. Avellum Partners banking and finance head, Glib Bondar headed a team acting for the issuer.
In Turkey, as part of the country’s continuing public-private partnership (PPP) healthcare initiative, a team from White & Case and Ankara-based partner firm Çakmak advised the lenders and the hedging banks, including the Sumitomo Mitsui Banking Corporation, the Bank of Tokyo-Mitsubishi UFJ, Siemens Bank and Intesa Sanpaolo, on the €150 million financing of a 475-bed hospital in Yozgat.
Several large corporate deals were closed in Saudi Arabia in June with the help of Clifford Chance. The Saudi Public Investment Fund (PIF), the investment arm of the state, secured 38% stake in Posco Engineering & Construction, a Korean company, for $1.1 billion. A team led by Omar Rashid represented PIF. On another of the month’s larger deals in the Kingdom – the IPO of Saudi Ground Services (SGS), which raised it $752 million – Dubai partner at the magic circle firm, Mike Taylor, headed a group representing the issuer.
A large syndicated loan closed in the UAE in June saw Emirates National Oil Company (ENOC) secure a $1.5 billion facility with the help of a team led by Clifford Chance Dubai partner Peter Avery. The nine-year financing was underwritten by Emirates NBD, Commercial Bank of Dubai, Dubai Islamic Bank, Mashreqbank, Noor Bank, Abu Dhabi Islamic Bank and Standard Chartered Bank.
An interesting development in the Gabonese Republic as the state issued a further $500 million worth of sovereign bonds in order to fund much needed infrastructure projects. Due 2025, the bonds will bear an interest rate of 6.95%. This is the second time in two years the African nation has issued bonds to help finance necessary structural improvements.
The transaction was advised by a White & Case team led out of London and Paris, with partners Francis Fitzherbert-Brockholes and Cenzi Gargaro taking the reins.
Christopher Cooper - Latin America
John Crabb - France, Switzerland, Gabon
Sam Duke - United Kingdom
Adam Majeed - Australia, China, Hong Kong
Jon Moore - Baltics, Russia, Turkey
Ben Naylor - Germany, Saudi Arabia, Ukraine, United Arab Emirates
Michael Washburn - North America