Legal Business

Deal view: Eversheds deal team – so much promise but so much steady

Newcomers to London quickly learn the rules of the escalator: stand still on the right or keep moving on the left. The risk with changing your mind is you can land flat on your face.

For Eversheds Sutherland, the consensus view is that its corporate team has stood on the right for years, moving along but hardly dashing. And why not? You still get where you are going.

The obvious answer is that the UK giant a year ago sealed its high-stakes union with US partner Sutherland Asbill & Brennan, the kind of cross-border move that makes law firms bellicose on their M&A ambitions. And after 12 months that corporate and M&A head Richard Moulton describes as very busy, he argues peers are only just catching up to the breadth the practice has achieved over the last five years, claiming it is competing with the likes of Ashurst and Travers Smith for transactional work handled outside the US/London elite. ‘We do large strategic work for clients – we’ve got some good examples – but would we like to have some more of it? Yes.’

Mergermarket statistics show the practice is busy, but reflect a mid-market machine rather than M&A thoroughbred. In 2017, Eversheds is in the top ten for announced European deals, advising on 185 ranked mandates, against 155 in 2016. However, the combined deal value at just $5.83bn compares unfavourably to competitors DLA Piper, CMS and Baker McKenzie.

Recent highlights include: at the end of 2016 advising National Grid, alongside Linklaters, on the £13.8bn sale of a major part of its UK gas distribution business; advising Charter Court Financial Services on its £550m listing on the London Stock Exchange; and acting for Capita on the £888m sale of its asset services arm.

Is the firm again committed to the City deal market after years of tilting toward regionalism and cost control?

Work in the energy, infrastructure and industrial sectors is particularly strong, including acting for BlackRock and Green Investment Group on the £423m acquisition of wind farm operations from Centrica and EIG Global Energy Partners. It also advised the US-based Chemtura Corporation on the German aspects of its €2.4bn takeover by LANXESS and more recently Royal Dutch Shell on its First Utility bid.

All respectable stuff, but you can see why critics maintain its deal team suffers from Eversheds’ generalism and lack of pronounced industry focus. The firm is cagey about breaking down financials by practice group, but says the corporate team has averaged 10% growth in the UK over the last three years.

The team in London has 18 partners, with Moulton wanting to broaden its City bench in capital markets and public M&A. It has made four hires in the past 18 months, though only one in London, with Karim Mahmud from Jones Day, as well as six internal promotions across the UK.

The firm has some credible operators, with Robin Johnson often cited as its top M&A name, while Rob Pitcher is similarly well established. Younger names to watch include Chris Halliday, while Nottingham-based Jon Cox-Brown is also well regarded.

If the evidence of Eversheds’ claimed progress is not yet abundant, the key question is if the firm is again more committed to the City deal market after years of tilting toward regionalism and cost control under former chief executive Bryan Hughes. Hughes’ successor, Lee Ranson, at least talks of a more growth-orientated agenda: ‘We make no secret of the fact we’re continually wanting to move up the food chain.’

We’ll see. Eversheds has sung this tune before and its business model can get by fine with just functional plc coverage. But if Eversheds is truly ever to leap to that left-hand fast track, it is surely now or never.

hamish.mcnicol@legalease.co.uk

Legal Business

Deal Watch: Kirkland and Eversheds lead as Toys R Us and Maplin collapse following bleak Xmas for retailers

Insolvency professionals have long been predicting a wave of trouble would hit the beleaguered UK high street and it has come to pass with Kirkland & Ellis and Eversheds Sutherland securing lead roles on the collapses this week of Toys R Us and Maplin.

Toys R Us announced today (28 February) that its domestic business was going into administration following a failed attempts to secure a new buyer for the UK’s largest toy retailer after sluggish trading hit the industry over the 2017 festive season.

Kirkland also acted for Toys R Us on the Chapter 11 filing for bankruptcy of its US business in September 2017, as well as a deal with the Pension Protection Fund (PPF) that temporarily saved the company from collapse in December 2017.

Kirkland restructuring partners Kon Asimacopoulos and Elaine Nolan are advising Moorfields’ joint administrators Simon Thomas and Arron Kendall.

Meanwhile, Eversheds’ team, led by Manchester restructuring partner David Gray, is advising Maplin’s joint administrators at PwC, which is fielding a team under partner Zelf Hussain.

Eversheds in 2014 advised Maplin on the consumer electronics retailer’s £85m sale to investment house Rutland Partners. Taylor Wessing is now advising Rutland, a long-standing client which it acted for in a number of deals last year, including the sale of Brandon Hire, the acquisition of Armitage Pet Care and an investment in Omar Group.

Gray said the Maplin business would continue to trade for a number of weeks in the hope of a sale, given the strength of Maplin’s brand. He added: ‘The high street’s having a tough old time at the moment.’

PwC’s Hussain commented: ‘Like many other retailers, Maplin has been hit hard by a slowdown in consumer spending and more expensive imports as the pound has weakened. Our initial focus as administrators will be to engage with parties who may be interested in acquiring all or part of the company.’

Maplin has annual turnover of £235.8m and employs 2,335 people across 217 stores in the UK and Ireland. Toys R Us, meanwhile, has 105 stores and employs 3,000 people in the UK.

‘It’s only going to get worse,’ notes one Magic Circle partner. ‘Furniture retail, department stores and casual dining are all expected to feature among the high-street casualties over the coming months.’

Nathalie.tidman@legalease.co.uk

For more on the insolvency market see last year’s report, ‘Waiting for Carney’ (£

 

 

Legal Business

On a roll: Eversheds Sutherland sees December deal flurry carry over

Eversheds Sutherland corporate head Richard Moulton cannot remember a busier December than in 2017 and believes the January deal market is already gathering pace.

As the transatlantic tie-up marked a year since going live this month, the firm has enjoyed a robust start to 2018. On 4 January, Eversheds advised as British retailer Poundland secured a £180m loan to reduce its reliance on its South African owner Steinhoff International, under investigation following accounting irregularities estimated at £7bn.

Legal Business

Deal view: Eversheds deal team – so much promise but so much steady

Newcomers to London quickly learn the rules of the escalator: stand still on the right or keep moving on the left. The risk with changing your mind is you can land flat on your face.

For Eversheds Sutherland, the consensus view is that its corporate team has stood on the right for years, moving along but hardly dashing. And why not? You still get where you are going.

Legal Business

Who Represents Who: Firms that will be affected by the fall of Carillion

For more information on Who Represents Who, contact:
David Burgess,
Publishing Director, The Legal 500
legal500.com/wrw
david.burgess@legal500.com

Legal Business

LLP accounts: Executive belts tightened at Eversheds Sutherland International as profit lifts 5%

 With the tie-up between Eversheds and Sutherland Asbill & Brennan almost a year old, the latest accounts for the non-US business reveal its c-suite took a £1.7m pay cut for the 2016/17 financial year, as the limited liability partnership (LLP) filing also reveals average remuneration per member rebounded slightly from the previous year’s drop. Meanwhile, staff costs for the legacy Eversheds business have continued to increase with double-digit percentage growth.

The firm’s key management team saw remuneration fall 22% to £6m in the 2016/17 financial year, according to the latest Eversheds Sutherland International accounts. The share of profit and salaries awarded to its chief executive, managing partner and members of the executive committee was £7.7m the previous financial year.

Eversheds Sutherland’s highest-paid member earned £1.4m in the year to 30 April 2017, a slight dip on the previous year’s £1.43m, and a further fall from the £1.5m earned in the year before that.

This is as the firm’s turnover increased 8% to £436.4m, while overall profit rose to £130.2m from £124.4m. The UK accounted for £345.7m of revenue, up from £340.2m, while the rest of Europe rose to £50.6m from £36.8m. Revenue from the rest of the world increased 40% to £39.1m.

Staff costs at Eversheds Sutherland were up more than 10% to £191.9m, as the number of members rose to 333 from 323 and overall staff numbers lifted to 3,056 from 2,963. Average remuneration per member lifted £5,000 to £391,000, a slight rebound from the 10% drop in the previous year.

Eversheds Sutherland’s operating loss in its various international joint ventures decreased to £550,000 from £720,000, as group operating profit before the joint ventures increased 4% to £132m.

Eversheds Sutherland has been expanding since its merger on 1 February 2017, most recently last week when it acquired the Dutch firm that had been part of its European network for ten years, formally adding Eversheds Sutherland Netherlands to the international LLP.

The merger followed one with Harry Elias Partners in Singapore in June 2017 and the firm’s opening of offices in Düsseldorf, Luxembourg, Moscow and St Petersburg.

hamish.mcnicol@legalease.co.uk

Legal Business

A flying start – Eversheds Sutherland nears first anniversary with trio of corporate deals

As the transatlantic Eversheds Sutherland tie-up approaches a year since going live, the firm has enjoyed a robust start to 2018 with some meaty corporate instructions and has incorporated its Dutch arm into its international LLP.

Leading off the end-of-year deal book was Shell’s December move into the UK residential energy market with its agreement to buy energy and broadband provider First Utility, which serves about 800,000 homes in the UK.

Eversheds Sutherland advised Shell on the deal, which has an undisclosed value and was subject to regulatory and other approvals. The team was led by corporate partner Iwan Walters, and included other partners Simon Crossley, Ros Kellaway, and Danny Blum. Slaughter and May acted for First Utility.

Walters said it was an interesting time for Shell to be entering what was a competitive UK domestic gas and electricity market, adding: ‘We look forward to building on our close working relationship with Shell in the UK and internationally.’

On the same day, the firm announced it was advising US data centre real estate investment trust (REIT) CyrusOne on the European aspects of its agreement with Quantum Strategic Partners, an investment fund managed by Soros Fund Management, to acquire European data centre provider Zenium for $442m.

Zenium has four properties in London and Frankfurt, with the deal expected to close early this year, subject to regulatory approval.

The Eversheds team was led by partner Simon Gamlin, and included partners Mark Chester and Christof Lamberts. Sullivan & Cromwell advised on the US aspects of the deal.

Then today (4 January), Eversheds advised as British retailer Poundland secured a £180m loan to reduce its reliance on its South African owner Steinhoff, a homeware and clothing conglomerate under investigation following accounting irregularities estimated at £7bn.

The two-year loan was arranged by Steinhoff-owned Pepkor Europe, the European owner of Poundland, from US investment firm Davidson Kempner.

Eversheds acted for the Steinhoff UK group, which also owned UK furniture brands Harveys and Bensons for Beds, in a team led by partner Carl Allen.

DWF and Simmons & Simmons acted for Pepkor Europe (the Pepkor and Poundland brands), while Linklaters acted for the international level Steinhoff companies.

The deals come as Eversheds Sutherland this week acquired the Dutch firm which had been part of its European network for ten years, formally adding Eversheds Sutherland Netherlands to its international LLP.

The Dutch firm has offices in Amsterdam and Rotterdam with eight partners and 32 lawyers, while the merger follows another with Harry Elias Partners in Singapore in June 2017 and the opening of offices in Düsseldorf, Luxembourg, Moscow and St Petersburg.

Eversheds Sutherland chief executive Lee Ranson said: ‘Developing in key jurisdictions is a core part of our global strategy and this move allows us to prioritise investment in a market which is of increasing importance for both our international and US clients.’

hamish.mcnicol@legalease.co.uk

Legal Business

Eversheds Sutherland elects Thompson chair in second female C-suite move in City Law this week

Eversheds Sutherland has elected the first-ever female chair of its UK-based international business, with financial services product head Pamela Thompson chosen today (5 December) over ‘a number of very strong candidates’.

Thompson will take the position of chair of the Eversheds Sutherland International LLP for a term of four years from next May, after incumbent Paul Smith did not stand for re-election.  Her main areas of practice include investment fund structuring and establishment and financial services regulatory work. She said: ‘I am honoured to have been elected chair and I would like to thank my partners for the trust they have placed in me.’

The firm’s co-chief executive Lee Ranson said Thompson was a well-respected and experienced leader. The firm would not confirm who else stood for election, but in October it was reported Thompson was up against joint head of energy and infrastructure Robert Pitcher and Manchester senior partner Michael Clavell-Bate. Pitcher was also reported to have contested the previous election when Smith was elected to replace John Heaps in late 2013.

Thompson added: ‘Eversheds Sutherland is on an exciting journey and I am delighted to be part of helping shape its future’.  In February, the international business entered into a tie-up with US firm Sutherland Asbill & Brennan and has this year opened a host of new offices in locations, including Luxembourg, Moscow, St Petersburg and Dusseldorf.

The firm also posted its best growth in revenue terms for some time although profit per equity partner (PEP) dipped slightly. Turnover was up 8% to £438.6m for 2016/17, with PEP at £725,000, down £17,000 from the previous financial year. Overall, Eversheds’ top line has grown 20% in the last five years, from £366m.

The election of a new chair of the international LLP follows the appointment last month of Ian Gray as chairman of Eversheds Sutherland (Europe). Gray, who will also continue in his role as executive partner (client strategy) of Eversheds Sutherland (International), was appointed chair from 1 November following a unanimous vote of the European Board.  His appointment takes effect from 1 November 2017. He succeeded Alan Murphy, who has been appointed deputy chairman as well as continuing in his role as managing partner of Eversheds Sutherland Ireland.

Thompson’s appointment as chair follows yesterday’s announcement Norton Rose Fulbright (NRF) would have its first female chair, Australia head Tricia Hobson.

She will take over as global chair at the end of the year from London-based Stephen Parish, who will continue as NRF’s Europe, Middle East and Asia chair until early next year, when he has said he will not stand for re-election.

hamish.mcnicol@legalease.co.uk

 

Legal Business

Boon for City real estate market as Eversheds Sutherland leads on largest-ever UK fund launch

In a major boon to the UK property market, recent changes to Stamp Duty Land Tax (SDLT) have sparked a trend that saw Eversheds Sutherland advise on the largest-ever launch of a UK property fund for Royal London Asset Management (RLAM) in October.

The portfolio, worth over £2.7bn, seeded by the transfer of two existing Royal London property portfolios, includes central London properties in New Bond Street, Covent Garden, Trafalgar Square, Oxford Street and St Paul’s. With a minimum investment of £50m, it is designed to expose the UK’s commercial real estate market to institutional domestic and foreign investors.

Legal Business

Hats in the ring: candidates emerge for Eversheds Sutherland chair contest

Three UK partners at Eversheds Sutherland, including the Manchester senior partner, will vie for the role of chair after Leeds litigator Paul Smith’s four-year term comes to an end later this year.

The partners who plan to stand for election are joint head of energy and infrastructure Robert Pitcher, joint UK financial services head Pamela Thompson and Manchester senior partner Michael Clavell-Bate.
It is understood that the election is due to kick off within the next week although there are no official candidates at this stage.

Paul Smith, who was the firm’s former Tyco relationship partner, took over from then-incumbent chairman John Heaps in December 2013 in a contested election against Pitcher. Heaps was elected chairman in May 2010 for a four-year term and chose not to stand for re-election following turning 60 in Autumn 2013.

The election for a new chair comes at a pivotal time for the UK side of Eversheds Sutherland, which has undergone a year of significant change. In February, Eversheds entered into a tie-up with US firm Sutherland Asbill & Brennan and so far this year the firm has opened a host of new offices in locations including Luxembourg, Moscow, St Petersburg and Dusseldorf.

The firm also posted its best growth in revenue terms for some time although profit per equity partner (PEP) dipped slightly. Turnover was up 8% to £438.6m for 2016/17, just eclipsing the 7% growth achieved on the top line in 2015/16. PEP now stands at £725,000, down £17,000 or 2% from the previous financial year but is up 16% from the £642,000 posted in 2011/12. Overall, Eversheds’ top line has grown 20% in the last five years, from £366m.

Meanwhile, it is understood that the firm’s co-chief executives Lee Ranson and US counterpart Mark Wasserman are due to unveil the combined firm’s new strategy over the next couple of weeks. The bottom line of that strategy is to be recognised as a global law firm by 2020.

kathryn.mccann@legalease.co.uk

For more on Eversheds Sutherland’s frenetic year and strategic plans, read Legal Business 100: Case study – Eversheds Sutherland