Legal Business

Deal round-up: Travers advises Shazam on Apple buyout as Freshfields and Norton Rose strike gold on $18bn mining merger

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Corporate Freshfields Bruckhaus DeringerNorton Rose FulbrightTravers Smith

In the latest flurry of deals, Travers Smith has represented popular mobile app Shazam on its buyout by tech giant Apple, while a raft of international firms have benefitted from recent transactional activity.

Shazam, which was founded in 2002, is a song recognition app which can identify what music is playing via a phone’s inbuilt microphone. The deal for Shazam, reportedly worth $400m, will see Apple offer the app on an ad-free basis for all users.

The buyout was initially delayed by a European Commission (EC) probe, amid fears it could give Apple Music a competitive advantage over rival streaming apps such as Spotify and Deezer, but the EC gave the takeover the green light earlier this month.

Shazam was advised by Travers Smith, with a team spearheaded by corporate finance partner Andrew Gillen. Gillen was supported by partners Jessica Kemp and Madeleine Gowlett, who offered specialist tax advice, while commercial advice was given by partner Louisa Chambers.

Apple was represented by Cooley, while Hogan Lovells also featured on the deal, advising Shazam on US aspects of the transaction.

Elsewhere, Freshfields Bruckhaus Deringer and Norton Rose Fulbright landed key roles as goldmining giants Randgold and Barrick of Canada announced an $18bn combination.

The merger is expected to create the largest gold company in the world in terms of tier one gold assets, and is predicted to have a market capitalisation of $18.3bn.

Freshfields is one of the firms advising Barrick on the merger. Leading for the Magic Circle firm are corporate partners Piers Prichard Jones and Stephen Hewes. US outfits Davies Ward Phillips & Vineberg and Cravath, Swaine & Moore also advised Barrick, alongside offshore firm Carey Olsen.

Norton Rose was on hand to support the US-based Randgold with a transatlantic team. Corporate partners Jon Perry and Nick Adams led for the firm out of London, while New York-based securities partner Steven Suzzan provided advice on the US side. Canadian firm Stikeman Elliot and offshore outfit Ogier also represented Randgold.

Finally, White & Case has advised the creditors of pharmaceuticals company Concordia on its $3.7bn recapitalisation.

The restructuring came after Concordia faced a number of issues, including regulatory scrutiny of its past business practices and a large amount of debt accrued from its previous acquisitions. As a result of the restructuring, Concordia’s debt has reduced from around $3.7bn to $1.4bn. A Carey Olsen team, led by partner Kate Andrews, advised the ad-hoc group of secured creditors on Jersey law aspects of the deal.

Christian Pilkington, one of White & Case’s lead restructuring partners on the mandate, commented: ‘This deal illustrates our ability to combine our global restructuring, finance and regulatory capabilities with our deep knowledge of the pharmaceutical industry.’

tom.baker@legalease.co.uk

Legal Business

Another blow for Freshfields as highly-regarded QC leaves for litigation boutique

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Strategic recruitment Freshfields Bruckhaus Deringer

Freshfields Bruckhaus Deringer has fielded yet another blow in the City after litigation partner Reza Mohtashami QC quit for litigation boutique Three Crowns.

Freshfields man and boy, Mohtashami joined the Magic Circle firm as an associate 19 years ago and was made up to partner in 2009. He worked in Paris, New York and Dubai before moving to London in 2014. He took silk in 2017.

Mohtashami rose to prominence in London as part of the firm’s well-established international arbitration practice after a successful five-year stint in Dubai. He was particularly involved in emerging markets cases, investment treaty arbitrations and in the energy, infrastructure and telecoms industries.

Three former arbitration partners from Freshfields were among the well-regarded group which set up Three Crowns in 2014 – Constantine Partasides, Georgios Petrochilos and Jan Paulsson – along with partners from Jones Day, Covington & Burling and Shearman & Sterling.

Three Crowns has more than 60 attorneys across its three offices in London, Paris, and Washington.  The firm focuses exclusively on arbitration: commercial, investment-treaty, and inter-state.

Three Crowns’ executive partner Gaëtan Verhoosel commented: ‘Reza’s astuteness and integrity as an advocate makes him a natural addition to Three Crowns, and his regional expertise will add immediate value to a very active part of our practice.’

Nigel Blackaby, Freshfields’ co-head of the international arbitration group, commented: ‘Reza is a valued friend and colleague who will be missed, and we thank him for his contribution to the development of Freshfields’ market-leading arbitration practice, particularly in the Middle East.  We wish him well for the next phase of his career.’

Another high-profile departure for Freshfields saw high-yield heavyweight Ward McKimm exit after three years to re-join his old firm, Shearman & Sterling in July. The move came not seven months after buyout star David Higgins exited for Kirkland & Ellis, despite the Magic Circle firm overhauling its partnership model in a bid to keep its top performers.

Freshfields also in June lost veteran corporate partner Martin Nelson-Jones, who had been at the firm since 1991, to DLA Piper in London.

Elsewhere in the City, Ashurst has hired partner Christopher Georgiou as co-head of its global Ashurst Advance team alongside Mike Polson. Georgiou joins from Fieldfisher, where he previously headed up the firm’s innovative alternative legal solutions platform, Condor.

He had worked at Ashurst for 14 years before Fieldfisher, building a securities and derivatives practice and co-leading the firm’s bank sector, as well as establishing its alternative legal services capability in Glasgow in 2013.

nathalie.tidman@legalease.co.uk

Legal Business

Magic Circle duo goes full throttle on Aston Martin’s landmark London listing

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Magic Circle Freshfields Bruckhaus DeringerSlaughter and May

City heavyweights Slaughter and May and Freshfields Bruckhaus Deringer have taken the driving seat on the proposed initial public offering (IPO) of Aston Martin, a float reportedly valuing the luxury car maker at £5bn.

Slaughters won the mandate advising Aston Martin with a corporate team led by Nilufer von Bismarck and including Roland Turnill and Filippo de Falco. The firm is working alongside Aston Martin’s general counsel (GC) Michael Marecki, while Simpson Thacher & Bartlett is advising on US law, led by London-based partner Gil Strauss.

Freshfields, meanwhile, is advising the underwriters, with a team led by Mark Austin and including Charlie Hayes.

Aston Martin is understood to have watched with interest the 2015 IPO of Ferrari on the New York Stock Exchange and, amid strong financial results for the first half of 2018, deemed it the time right to follow suit.

If it goes ahead, the float will make Aston Martin the only independent British car manufacturer to be listed on the London Stock Exchange (LSE).

In a LSE announcement published today (29 August), Aston Martin pointed to an 8% year-on-year uptick in revenue to £445m for the six months to 30 June 2018 and a 14% increase in adjusted EBITDA to £106m, compared with £93m for the first half of 2017.

‘The improved performance was primarily driven by increased revenue from sales of special edition vehicles, in particular the Vanquish Zagato family and DB4 GT Continuation models and revenue from the Aston Martin Consulting business,’ the announcement said.

The results are a fillip for a company that has a chequered financial history, having endured no fewer than 7 insolvencies over the years.

Austin told Legal Business: ‘This is the next step in a great turnaround story for Aston Martin and it’s also a good news story for the London IPO market, including in the context of Brexit. The transaction is notable for being the first to be announced since new IPO rules came into force on 1 July 2018 which, broadly require unconnected analysts to be involved in the transaction and for the registration document to be published before the prospectus.’

One City corporate partner added: ‘The IPO of Aston Martin has been anticipated as the next logical float after Ferrari’s and is also a logical way of giving liquidity to shareholders. The main driver for the regeneration of the company has been the new management team led by president and chief executive Andy Palmer, who have championed a vision for the creation of new brands and new models – a focus Aston Martin didn’t have before.’

The company’s refreshed strategy launched in 2015 and includes the opening of a new plant at St. Athan in Wales in 2019.

Palmer said: ‘Today’s results show that we have continued to deliver sustainable growth, margins and value for our shareholders whilst launching three new models and variants in the first half of the year. Since launching the Second Century Plan in 2015, Aston Martin Lagonda has been transformed into a luxury business focused on creating the world’s most beautiful high-performance cars. This transformation has delivered significant growth in revenues, unit volumes and profitability.

The strategy also encompasses branching out into other luxury vehicles, as well as the manufacture of planes and submarines.

nathalie.tidman@legalease.co.uk

Legal Business

DWF hires the brains behind Freshfields’ Manchester hub for new managed services role

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Strategic recruitment DWFFreshfields Bruckhaus Deringer

National operator DWF has bolstered its services clout ahead of a touted stock exchange listing with the hire of Freshfields Bruckhaus Deringer’s well-regarded chief of business operations, Anup Kollanethu (pictured).

Kollanethu, who joined the Magic Circle firm in mid-2015 after 12 years at Aviva Investors, has been appointed chief executive of DWF managed services.

The new role will oversee the development of DWF’s volume and integrated legal services work. This will add to initiatives such as the firm’s Connected Services arm, a division of independent businesses which work alongside the firm’s legal teams to help clients manage risk, reputation, cost, time and resources.

Kollanethu was the director of Freshfields’ combined legal and business services centre in Manchester, opened as part of the City giant’s 2015 shake-up which saw the mass relocation of support roles to the north. More than 700 jobs have been created in Manchester since.

DWF chief executive Andrew Leaitherland cited Kollanethu’s extensive experience in business transformation and managed services, which has included a stint as managing director of transformation and global shared services at Aviva Investors, as integral to the hire.

Leaitherland commented: ‘A significant part of delivering value is about delivering a full-service provision as a legal business, which, along with complex law and Connected Services, includes the volume work we deliver for clients in the UK and internationally. The expertise that Anup brings to this role will allow us to create a sustainable platform for future growth, and he will play a key part of how we provide integrated services to clients globally.’

Kollanethu added: ‘I am delighted to join an ambitious business like DWF, which has responded to the evolving expectations of clients with an innovative and commercially-focused approach to client service, and I look forward to working with a fantastic team to build on a successful strategy.’

Kollanethu’s experience in business change projects comes as DWF gears up to be the largest UK firm float yet. In June the firm confirmed it was eyeing a London Stock Exchange listing later this year. DWF also recently brought in former DLA Piper chief information officer (CIO) Daniel Pollick for a newly created CIO role.

DWF’s float reportedly came with a £1bn price tag but, given its 2016/17 revenue of £199.3m, and profit of £45.5m, a more realistic valuation would be in the £400-£600m region. DWF’s borrowings have also increased in recent years to exceed £40m in bank debt, a relatively high level for a law firm.

The firm’s recent history has been marked by a spate of office openings in Europe, North America and Asia-Pacific, as well as the acquisitions of legal cost business NeoLaw last June and claims management firm Triton Global.

DWF’s IPO would be the sixth UK float, and the largest by some distance since Slater & Gordon’s troublesome listing on the Australian stock exchange more than a decade ago.

hamish.mcnicol@legalease.co.uk

Legal Business

Freshfields and King & Spalding secure mandates as Equitable Life completes its turnaround with £1.8bn sale

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Dealwatch Freshfields Bruckhaus DeringerKing & Spalding

Equitable Life put pensions at risk when it nearly collapsed in 2000. But 18 years on it has completed its turnaround with Life Company Consolidation Group (LCCG) agreeing to acquire the UK’s oldest life assurer for £1.8bn.

Equitable Life turned to Freshfields Bruckhaus Deringer, which fielded a team led by corporate insurance partner George Swan and included restructuring and insolvency specialists Neil Golding and Craig Montgomery.

Legal Business

Deal Watch: International elite flock to $3.3bn Linde disposal as Paul Hastings hire secures 2nd deal for PE client

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Corporate Freshfields Bruckhaus Deringer

Freshfields Bruckhaus Deringer and Linklaters are leading on Linde’s $3.3bn Americas disposals, bringing the German gas group a step closer to its $83bn combination with Praxair.

The deal sees Freshfields advise a consortium of Messer Group, the German industrial gas manufacturer, and private equity house CVC Capital Partners as it acquired the bulk of Linde’s gas business in North America and individual business units in South America. The Freshfields team out of Germany was led by Kai Hasselbach in Munich and Stephan Waldhausen in Dusseldorf while its US team was led by partners Omar Pringle (M&A) and Paul Yde (antitrust).

Latham is also advising CVC, with a team out of Frankfurt led by managing partner Oliver Felsenstein and corporate partner Leif Schrader.

Hengeler Mueller are advising Linde on the sale as lead corporate counsel, with the elite German firm fielding a team under Dusseldorf-based M&A partner Matthias Hentzen and Emanuel Strehle in Munich.

The German company also instructed Linklaters team as lead on competition aspects, with the top 20 global firm deploying corporate partner Timo Engelhardt in Munich on M&A and Thomas McGrath in New York and Bernd Meyring in Brussels on competition.

The carve-out was required for Linde to secure merger clearance for a combination with US rival Praxair.

McDermott Will & Emery and Greenberg Traurig earlier this month won mandates on the €5bn sale of Praxair’s European assets to Japanese rival Taiyo Nippon Sanso Corporation (TNSC). Greenberg Traurig advised the buyer and McDermott the seller.

Hengeler is also advising Linde on the underlying merger with Praxair, alongside Wall Street leader Cravath Swaine & Moore and Linklaters. Sullivan & Cromwell is acting for Praxair. The Linde/Praxair tie-up was first proposed at the end of 2016.

Freshfields’ Hasselbach told Legal Business: ‘The most interesting aspect of the deal is the interlinking of three aspects into one. You have the merger as the reason for the disposal, you have Messer putting its Western European companies into the joint venture. You also have antitrust authorities urging the disposal of certain assets.

‘We did not know exactly which assets the antitrust authorities were instructing the company to sell until a short time before the clients bought them. While the assets were broadly similar, there was uncertainty over how many assets would be sold and in which states. That was challenging from a private equity perspective.’

Elsewhere, Paul Hastings’ recent hire of Anu Balasubramanian (pictured) from DLA Piper to lead its City private equity team continues to pay dividends, with the new partner sealing her second mandate this month acting for key relationship client Abry.

The latest deal sees Paul Hastings advise the Boston-based media- focused sponsor on its disposal of Basefarm to Orange Group for €350m.

Basefarm provides services and technology advice relating to big data, cloud computing and information security, operating in Norway, Germany, Sweden and the Netherlands.

Balasubramanian advised alongside fellow corporate partner Garrett Hayes in a team including tax partner Arun Birla. Schjødt advised on Norwegian law aspects, with DLA Piper covering additional due diligence. Orange was advised by Herbert Smith Freehills. Earlier this month, Balasubramanian led a team advising Abry on its cash offer for European telecom provider LINK Mobility in a deal valued at €357m.

In a prolific week for the firm, Paul Hastings on Monday (16 July) also announced it was advising Monaco Telecom on its acquisition of mobile and fixed telecom operator MTN Cyprus for €260m. Monaco Telecom is majority-owned by NJJ, the investment arm of French billionaire Xavier Niel. Garrett Hayes led Paul Hastings’ team, while Goodwin Procter’s Arnaud Fromion advised Monaco Telecom on financing. Freshfields M&A partner Bruce Embley advised MTN.

nathalie.tidman@legalease.co.uk

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Legal Business

Freshfields’ high-yield guru McKimm rejoins Shearman & Sterling

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Strategic recruitment Freshfields Bruckhaus Deringer

In a fresh blow for City giant Freshfields Bruckhaus Deringer, high-yield partner Ward McKimm is leaving after three years to re-join his old firm, Shearman & Sterling.

The move comes not seven months after buyout star David Higgins exited for Kirkland & Ellis despite the Magic Circle firm overhauling its partnership model in a bid to keep its top performers.

Similarly, Freshfields broke its lockstep to lure McKimm from US rival Kirkland & Ellis in 2015, a move which exercised changes to the partnership ushered in the previous year to attract top US talent.

McKimm is returning to Shearman’s capital markets practice where he worked before Kirkland for 14 years, becoming partner in 2005 and co-head of its corporate group in 2010.

Shearman has had a high-yield specialist-sized hole since McKimm’s former colleague and head of European capital markets, Apostolos Gkoutzinis, quit after 13 years to join Milbank Tweed Hadley & McCloy earlier this year.

David Dixter, head of Shearman’s European capital markets practice, said: ‘Clients continue to turn to us to help them navigate the most complex and innovative transactions, and Ward will be a major asset in providing our clients with a top of market legal service.’

McKimm added: ‘I am pleased to be re-joining such a vibrant and successful team. The capital markets and leveraged finance team at Shearman & Sterling has always been one of the best in the market.’

nathalie.tidman@legalease.co.uk

Legal Business

Freshfields partner profits top £1.7m as City giant posts more confident year

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Financial results 2017/18 Freshfields Bruckhaus Deringer

Freshfields Bruckhaus Deringer has posted something of a rebound after announcing a 12% increase in profit per equity partner (PEP) to £1.734m while the firm added 5% to its top line.

The firm achieved total profits of £683m, a 12% increase, while revenues were up from £1.33bn last year to £1.403bn. The performance will be seen as a marked improvement on the 2016/17 season when Freshfields failed to hike income at all despite favourable movements in currencies. The hike in partner profits will be seen as particularly welcome at a time when many London leaders are seeing their star partners targeted by aggressive US rivals.

The results come hot on the heels of Clifford Chance’s on Tuesday (3 July), which revealed similar figures of a 5% revenue hike to £1.623bn and a profit pool up just over 13% to £626m. PEP increased nearly 16% from £1.375m to £1.596m.

Freshfields managing partner Stephan Eilers told Legal Business: ‘It has been a very good year. The most important drivers of profit have private equity transactions in the non-traditional spaces of fintech, TMT and infrastructure and an uplift in the US business.’

Natasha Good, corporate partner, cited a key mandate advising US cable giant Comcast on its £22bn bid for Sky against a rival bid from Rupert Murdoch’s 21st Century Fox. Another headline deal saw Freshfields advise on Vodafone’s €18.4bn buyout of Liberty Global European assets as the trend for consolidation continues. ‘That activity will not be going away in the next year or two,’ said Good.

Eilers commented: ‘We are very optimistic for the future. We see the clients sticking with us. In the US we will try as we have been doing, to build antitrust, leveraged finance and M&A.’

Closer to home, Eilers points to the impending launch of a new support hub to cover mainland Europe in Berlin, as well as the impending City move to a flagship office in Bishopsgate. ‘We don’t see Brexit as a risk. We see it more as an opportunity.’

Eilers concluded: ‘As clients adapt to the challenges and opportunities presented by digital transformation, we are ambitious about the opportunities this brings and are investing across our business. We look forward to continuing to deliver some of the most notable and challenging work in the market.’

nathalie.tidman@legalease.co.uk

Legal Business

Rich pickings for Travers Smith and Freshfields as Bridgepoint cashes in on Pret

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Dealwatch Freshfields Bruckhaus DeringerTravers Smith

Ten years after acquiring Pret A Manger in a deal worth £350m, private equity house Bridgepoint is selling it for more than four times its original investment and providing City firms with big mandates.

Luxembourg-headquartered JAB Holding Company, an investment firm owned by Germany’s Reimann family, is to buy the food chain for £1.5bn.

Legal Business

Associate pay: Freshfields joins salary race as global firms jostle for talent in US

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Salaries Clifford ChanceFreshfields Bruckhaus DeringerQuinn Emanuel Urquhart & Sullivan

More details are emerging on associate pay at Magic Circle firms as Freshfields Bruckhaus Deringer has joined the list of firms to announce increased salaries for US associates, as competition to recruit top lawyers intensifies.

The move by Freshfields will see the firm match the rates set by Milbank Tweed Hadley & McCloy, which set the standard for raising the starting salary for new lawyers two weeks ago, with Freshfield’s US associates now starting on $190,000 and rising to $330,000 in their eighth year.

Despite matching Milbank’s rates, pay is below that the rates announced by Magic Circle counterpart Clifford Chance (CC), which will pay also junior associates $190,000 but this will eventually rise to $350,000 for senior associates. CC also announced summer bonuses starting at $5,000 for junior lawyers rising to $25,000 associates from the 2009 class and more senior.

The issue of associate pay has seen firms begin to jostle with each other, as CC’s rates closely-matched those of Quinn Emanuel Urquhart & Sullivan, which announced a new scale of $190,000 for first year associates to rising to $340,000 for senior associates, as both firms surpass the levels announced by Milbank for mid-level and senior associates.

In addition, Quinn announced a pay hike for junior London lawyers, which sees associates start on £125,000, potentially rising to £245,000 for senior associates. Despite being below New York rates, Quinn’s London salary announcement means a sharp hike for associates in many bands, particularly in the class of 2013, who will see a pay increase of £30,000 from £155,000 to £185,000.

The latest pay rises come as City firms wrestle with fee pressure from core blue-chip clients, while expansionist US firms continue to attract Magic Circle talent and inflate the market rate for the best deal lawyers. With good growth predicted for Magic Circle firms this year, the associate pay increases could go some way towards steering young talent in the direction of the established City players as US firms continue to stretch London salaries.

thomas.alan@legalease.co.uk