Legal Business

Dealwatch: Travers, HSF and Paul Weiss advise on $2.1bn Pace sale

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Corporate Herbert Smith FreehillsPaul, Weiss, Rifkind, Wharton & GarrisonTravers Smith
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Travers Smith, Herbert Smith Freehills and Paul, Weiss, Rifkind, Wharton & Garrison have all landed roles on the $2.1bn sale of Pace to Arris as another UK company gets acquired by the US.

UK provider of broadband and pay TV technology Pace has been brought by US-based broadband media technology company Arris Group for $2.1bn.

Travers’ team is advising longstanding client Pace on the transaction having previously acted for Pace on the purchase of broadband developer Aurora in 2013 and on its 2010 acquisition of broadband company 2Wire. This time around the firm’s team was led by head of corporate Spencer Summerfield, with additional specialist advice provided by competition partner Nigel Seay and employee incentives partner Mahesh Varia. Paul Weiss advised Pace on US matters.

Arris turned to a Herbert Smith Freehills team in the UK led by corporate partners Gavin Davies and Alex Kay, while in the US it used Troutman Sanders.

Travers’ Summerfield said: ‘We are delighted to have assisted our long-standing client Pace on the transaction, which provides a significant platform for their future growth and creates a major new player in the global broadband media technology market.’

Under the terms, Pace shareholders will receive cash and stock in the new holding company at 132.5 pence in cash for each Pace share and 0.1455 of new Arris shares. The deal is being done through a scheme of arrangement with the new holding company listed on the NASDAQ stock exchange. The transaction is subject to a number of conditions and is expected to close in late 2015.

The sale came in a bid to expand Pace’s international presence and expand its product portfolio across software and services. The combination will create a broadband media technology company with estimated revenue of US $8bn and 8,500 employees worldwide.

jaishree.kalia@legalease.co.uk

Legal Business

Deal watch: Corporate activity in March 2015

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Corporate Travers Smith
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CC, LINKLATERS AND LATHAM & WATKINS WIN KEY ROLES ON PIRELLI TAKEOVER

Advised by Clifford Chance (CC), China National Chemical Corporation bought tyre-maker Pirelli in a $7.7bn deal. The Chinese company acquired a 26.2% stake from Camfin, which was advised by Chiomenti, while Lombardi Molinari Segni handled financing aspects and Linklaters advised fellow investor Long Term Investments. Latham & Watkins advised underwriters JP Morgan.

 

Legal Business

Seeking £3.4bn in damages: Clifford Chance and Travers Smith lead on HP High Court contest with Autonomy founders

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Litigation Clifford ChanceTravers Smith
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Clifford Chance and Travers Smith have taken lead roles advising on the £3.4bn dispute between Hewlett-Packard (HP), and Autonomy founder Michael Lynch and its former chief financial officer Sushovan Hussain regarding allegations of fraudulent accounting.

Filed at London’s Chancery Division last Monday (30 March), the dispute arose following accusations from Palo Alto-headquartered HP that Autonomy had committed a series of abuses that forced HP to write down $8.8bn from its 2011 takeover. HP claimed it was misled by Autonomy as to its true value and published the allegations following an internal investigation overseen by executive vice-president and general counsel John Schultz.

The instruction to represent Autonomy founder and tech entrepreneur Mike Lynch was gifted to Clifford Chance in 2012, with litigation and disputes head Jeremy Sandelson advising Lynch alongside fellow disputes partner Iain Roxborough in London, and partner Chris Morvillo in New York on matters including the Serious Fraud Office’s high profile investigation into the Autonomy sale which closed in January due to lack of evidence. Travers Smith meanwhile has been advising HP and so far particulars have yet to be filed.

A spokesperson for HP said: ‘HP can confirm that, on March 30, a claim form was filed against Michael Lynch and Sushovan Hussain alleging they engaged in fraudulent activities while executives at Autonomy. The lawsuit seeks damages from them of approximately $5.1 billion. HP will not comment further until the proceedings have been served on the defendants.’

Following the High Court filing the former management of Autonomy last Tuesday (31 March) confirmed they will file claims against HP for ‘loss and damage caused by false and negligent statements made against them by HP on 20 November 2012 and in HP’s subsequent smear campaign.’

Former Autonomy chief executive Lynch’s claim ‘is likely to be in excess of £100m’ and filed in the UK.

sarah.downey@legalease.co.uk

Legal Business

Dealwatch: Clifford Chance, Travers Smith, Debevoise and BLP advise on £1.2bn BCA sale

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Corporate Berwin Leighton PaisnerClifford ChanceTravers Smith
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A quartet law firms including Clifford Chance (CC), Travers Smith, Debevoise & Plimpton and Berwin Leighton Paisner (BLP) have all secured instructions on the £1.2bn sale of BCA (formerly British Car Auction) to publicly listed investment vehicle, Haversham Holdings.

Travers Smith senior partner Chris Hale led a team advising management on the proposed sale of BCA, which is owned by private equity firm Clayton, Dubilier & Rice (CD&R). Other Travers team members included tax partner Russell Warren and corporate finance partner Adrian West.

CC corporate partner Simon Tinkler served as legal adviser to CD&R, while BLP partner Benjamin Lee acted as adviser for Haversham, alongside Debevoise & Plimpton, leading a team including corporate finance partner Julian Stanier and finance Partner Derek Hrydziuszko.  Debevoise’s team was led by London-based partner Alan Daviesand included Frankfurt-based international counsel Philipp von Holst.

The deal will see shareholders receive £701m in cash and £104m in stock in what constitutes Europe’s largest used-vehicle marketplace. BCA operates in 13 countries, and in 2014 remarketed an estimated 1m vehicles and bought more than 140,000.

Last October saw the high-profile initial public offering of BCA Marketplace, which also owns webuyanycar.com, with hopes to raise £200m in proceeds but the deal was scrapped due to volatile markets. On that deal, Magic Circle pair Linklaters and CC advised with the former’s senior corporate partner trio John Lane, Charlie Jacobs, and Jason Manketo advising BCA Marketplace, while the latter’s finance partners Simon Thomas and Chris Walton advised the bookrunners JP Morgan and UBS.

The latest transaction is conditional on, amongst other things, Haversham’s share placing becoming unconditional and is expected to close in early April.

sarah.downey@legalease.co.uk

Legal Business

Listing in London: WLG and Travers advise as Gabelli Value Plus raises £100m in IPO

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Corporate Gowling WLGTravers Smith
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Wragge Lawrence Graham & Co (WLG) has advised new investment trust Gabelli Value Plus on its £100m initial public offering (IPO) on the London Stock Exchange as it targets further work from US fund manager GAMCO Investors.

Investment funds head Nick Heather led WLG’s team, assisted by fellow funds partner John Reed and tax partner Michael Murphy. Travers Smith advised Investec Bank, as sponsor, sole global co-ordinator and bookrunner to the transaction with a team led by partner Aaron Stocks.

The trust is managed by New York-based investment manager Gabelli Funds – a wholly-owned subsidiary of GAMCO which has assets under management of approximately $46.9bn.

Commenting on the IPO, Heather said: ‘We are very pleased to have acted on the launch of Gabelli Value Plus, which we hope will be the first of many transactions for significant US fund manager GAMCO. I am also pleased that from first instruction to launch was a period of just under two months (with Christmas intervening) which is a considerable achievement on a deal of this complexity.’

Stocks added: ‘It is fantastic to see a new US equities fund being raised on the London market. This demonstrates the strength of the UK listed investment funds market and its capacity to accept a wide variety of investment strategies.’

The funds team at WLG also recently acted on two sizeable real estate transactions over the last month. The first saw the team advise on the formation, fund raise and initial deployment of £30m in capital for Horizon Long Lease Housing, while the second saw the team act for AEW UK South East Office Fund LP (AEW SEOF) on a £75m secondary fund raise.

kathryn.mccann@legalease.co.uk

Legal Business

Dealwatch: Linklaters, HSF and Travers Smith win key roles as Man Group acquisition targets Japan

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Corporate Herbert Smith FreehillsLinklatersTravers Smith
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Herbert Smith Freehills (HSF) won its first M&A mandate for Man Group, as the hedge fund acquired the investment management business of Mayfair-based NewSmith, with Linklaters and Travers Smith also picking up key roles.

HSF acted for Man Group, the world’s largest listed hedge fund manager, with a team led by corporate partner Mike Flockhart alongside employment partner Tim Leaver. Flockhart said: ‘We have a very good relationship with Man Group, particularly on the funds side, but this is the first M&A transaction we have done for them. Although we did have a role acting as Credit Suisse’s adviser when Man acquired Numeric in 2014.’

He added: ‘The asset management sector is hot at the moment and there is a lot of consolidation. Some transactions are driven by opportunistic factors, some by strategic ambition. Man is obviously in an acquisitive phase at the moment and has completed a number of acquisitions in the last 12 months.’

A Travers Smith team led by senior partner Chris Hale acted for the founding partners of NewSmith, which has $1.2bn funds under management and invests in UK, European and Japanese equities.

The other stakeholder, Japan’s Sumitomo Mitsui Trust Bank, which owns a 40% share of the UK asset manager was represented by Linklaters with M&A and restructuring partner David Holdsworth leading for the firm alongside corporate associate Peter McCabe. The acquisition is expected to complete in the second quarter of 2015, subject to regulatory and other approvals.

In a statement, Luke Ellis, president of Man Group, said: ‘We believe that NewSmith is a highly complementary business for Man GLG. The acquisition brings a new dimension to the firm, including a Japanese hedge fund and an excellent team in Tokyo, as well as adding further scale to our London business.’

This is one of just a number of asset management deals that HSF has acted on recently with Flockhart having also advised Veritas Asset Management and its founders on Affiliated Managers Group’s acquisition of a majority stake, and Keith McDermott and a related family trust on the sale of their stake in Longview Asset Management to Northill Capital.

HSF also recently worked alongside Travers Smith on the £500m IPO of thetrainline.com – Britain’s largest online rail booking company. Travers Smith advised the owner, Exponent Private Equity, while HSF advised Morgan Stanley and JP Morgan.

kathryn.mccann@legalease.co.uk

Legal Business

Dealwatch: Freshfields, A&O and Travers act as Asia’s richest man buys UK rail group for £2.5bn

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Corporate Allen & OveryFreshfields Bruckhaus DeringerTravers Smith
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Travers Smith, Freshfields Bruckhaus Deringer and Allen & Overy (A&O) have won roles advising on the sale of UK’s leading rail leasing company Eversholt Rail Group for £2.5bn.

Asia’s richest man Li Ka-shing, owner of two investment vehicles Cheung Kong Infrastructure Holdings (CKI) and Cheung Kong Holdings (CKH), will purchase the rail group from its majority stake holder – a consortium that includes 3i Infrastructure, Morgan Stanley Infrastructure Partners and STAR Capital Partners – with a 50% share going to each vehicle. The deal has an equity value of around £1.1bn, giving an enterprise value of £2.5bn, and is expected to close in March 2015.

Travers Smith advised management on the sale of Eversholt Rail Group, which owns around 28% of the current UK passenger train fleet, led by corporate partner and head of private equity Paul Dolman, alongside tax partner Kathleen Russ.

Freshfields acted for the sellers with Richard Thexton leading the team alongside corporate partner Claire Wills. Partner Helen Lethaby provided tax support alongside partners Alastair Chapman on antitrust, competition and trade issues and David Pollard on pensions issues, while partner Simon Weller advised on the Hong Kong Listing Rules aspects.

Thexton said: ‘Following on from our role advising the selling consortium on the successful disposal of Porterbrook Rail in October 2014, this second deal in the sector in a short space of time clearly demonstrates our capabilities as the go-to firm for complex infrastructure M&A.’

The Porterbrook deal saw Freshfields act opposite Linklaters which advised the buyers – a group of investment funds including Alberta Investment Management Corporation, Allianz Capital Partners, EDF Invest and Hastings Funds Management.

A&O’s team consisted of a cross-border, cross-practice team of lawyers led by partners Richard Evans from London and Bernardine Lam from Hong Kong, for issues around corporate, regulatory and anti-trust.

jaishree.kalia@legalease.co.uk

Legal Business

Dealwatch: Simpson Thacher leads for KKR as thetrainline.com opts for sale over IPO

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Corporate Herbert Smith FreehillsSimpson Thacher & BartlettTravers Smith
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Private equity powerhouse KKR has purchased travel ticket seller thetrainline.com, with its go-to law firm Simpson Thacher & Bartlett advising on a deal that diverted the company from carrying out its announced IPO on the London Stock Exchange.

Simpson Thacher has strong ties to the private equity house in the US, with London managing partner Gregory Conway the relationship manager for KKR in the City.

Thetrainline.com’s owner, UK private equity house Exponent, announced plans to list Britain’s largest online rail booking company for £500m earlier this year. However, KKR’s interest saw that plan derailed in favour of a quicker departure, with Exponent more than tripling its investment after purchasing Trainline in 2006 for £160m.

Since launching in 1999 Trainline has gone on to become the most downloaded travel app in the UK. The company has 4.7m active customers and received nearly 21m visits each month.

Travers Smith’s head of corporate Spencer Summerfield, alongside corporate partner Adrian West and US securities partner Charles Casassa, were originally instructed by Trainline to execute the IPO and were retained to handle the sale to KKR.

Herbert Smith Freehills corporate partner Chris Haynes and the firm’s global head of capital markets Steve Thierbach were enlisted by Morgan Stanley and JP Morgan, the banks charged with spearheading an IPO.

tom.moore@legalease.co.uk

Legal Business

Dealwatch: Kirkland, Travers, and Freshfields advise on Cinven’s £462m purchase of PCL

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Corporate Freshfields Bruckhaus DeringerKirkland & EllisTravers Smith
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Kirkland & Ellis, Travers Smith and Freshfields Bruckhaus Deringer have all won roles advising as private equity firm GTCR agrees to sell British financial services company Premium Credit Limited (PCL) to buyout group Cinven for £462m.

US firm Kirkland won the role acting for GTCR and the other sellers, with corporate partners Gavin Gordon and Stephen Ritchie leading the team alongside capital markets partner William Burke and tax partners Ian Taplin, Oliver Currall, William Welke and Mike Carew. 

Travers Smith senior partner Chris Hale and tax partner Russell Warren advised the company’s management while Freshfields’ corporate partner Adrian Maguire led the team representing Cinven.

The acquisition comes as Cinven builds a portfolio of specialty finance companies. ‘The acquisition of PCL is a further sign of increased activity of the key private equity players in the financial services sector,’ said Travers Smith in a statement. Kirkland’s Gordon added: ‘We were delighted to help GTCR on the complex acquisition and disposal of Premium Credit.’

The sale comes after Chicago-based GTCR brought PCL from MBNA Europe – a subsidiary of Bank of America Corporation – in 2012. The business has experienced a significant transformation since then including a establishing a standalone asset-backed funding facility with seven leading banks, and completing the carve-out from Bank of America.

jaishree.kalia@legalease.co.uk

Legal Business

Dealwatch: Travers Smith and Herbert Smith Freehills on board for thetrainline.com £500m IPO

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Corporate Herbert Smith FreehillsTravers Smith
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Constituting the first technology IPO of the year, Travers Smith and Herbert Smith Freehills have both landed key roles advising Britain’s largest online rail booking company thetrainline.com as it prepares to float on the London Stock Exchange later this year.

Having been purchased by Exponent Private Equity in 2006 for £160m, the London-based company expects to raise £75m and is aiming for a valuation of £500m.

Travers Smith, which is a long-standing adviser of Exponent, is advising thetrainline.com, with corporate head Spencer Summerfield leading a team including corporate partner Adrian West and US securities partner Charles Casassa. Herbert Smith Freehills corporate partner Chris Haynes is advising the banks Morgan Stanley and JP Morgan alongside the firm’s global head of capital markets Steve Thierbach.

Travers Smith previously advised Exponent and thetrainline.com on the latter’s £190m dividend recapitalisation, a deal which also saw Hogan Lovells act for the lenders and constituting the largest unitranche facility put together for a UK-based company in 2013.

Herbert Smith Freehills has been gifted with several high profile IPO mandates in recent months including online appliances website AO and Just Eat.

Clare Gilmartin, chief executive of Trainline, said: ‘We are witnessing continued strong growth in rail and, having experienced first-hand the transformative effect of online and mobile in other e-commerce markets, I am hugely excited by the opportunity that the fast-developing online rail market offers.

‘Trainline is the clear leader in the online rail ticket market in the United Kingdom and we believe that we are therefore well positioned to capitalise on mobile and e-ticketing, which are changing the way consumers plan and purchase travel. In addition, we are seeking to leverage our considerable experience in the UK market to grow our presence in Europe.’

sarah.downey@legalease.co.uk