A wary optimism was the prevailing mood of private equity partners in October, as deals such as the $2.2bn acquisition of Vion Food Group’s gelatine-making subsidiary, Vion Ingredients by private equity house Darling International demonstrated that there is appetite, and funds, for the right kind of asset.
Texas-based Darling used K&L Gates and Clifford Chance (CC), while the Netherlands’ Vion was advised by leading Benelux independent De Brauw Blackstone Westbroek.
K&L Gates fielded an international team, led by Dallas corporate partner Mary Korby and including Frankfurt-based corporate partner Mathias Schulze Steinen and London competition partner Scott Megregian.
K&L Gates chairman and global managing partner Peter Kalis told Legal Business: ‘Mary Korby and her four-continent K&L Gates team reminded us again that integrated global law firms are the efficient solution for clients doing business across borders.’
The CC Amsterdam team that advised Darling on the Dutch aspects of the acquisition was led by corporate partner Gregory Crookes and included banking partners Jelle Hofland and Titus de Vries, alongside employment partners Sara Schermerhorn and Floor van der Steenstraten.
Meanwhile, at De Brauw Blackstone Westbroek, the team was led by corporate partner Arne Grimme, while Simpson Thacher & Bartlett corporate partners Lee Meyerson and Robert Spatt are representing J.P. Morgan Securities in its role as financial adviser to Darling.
One corporate partner at a City firm said: ‘The confidence is returning to the private equity market as the Eurozone becomes more stable. The buyout houses are also now more sensible and not highly debt laden.’
Elsewhere, Slaughter and May has scored a lead role on another initial public offering (IPO), as Stock Spirits Group floated on the London Stock Exchange, with rival firm Linklaters advising the banks. The company, valued between £600m and £800m, is a leading European vodka producer, with the largest market share of spirits in the Czech Republic and Poland.
Corporate partners Jeff Twentyman and Richard Smith are heading Slaughters’ team, working alongside its regular US co-counsel Paul, Weiss, Rifkind, Wharton & Garrison.
The stock float follows Slaughters’ roles on IPO, including esure, Countrywide and Royal Mail this year. This latest offer will comprise £50m of new shares and the partial sale of existing shares held by funds managed by private equity firm Oaktree Capital Management and Stock Spirits’ current and former managers.
Smith told Legal Business: ‘Private equity houses have commonly been retaining significant stakes in their investments on flotation. For example, Oaktree did not sell down any shares in Countrywide at the time of its IPO in March and others have only sold down a portion of their entire interest since.’
Linklaters, led by John Lane and Patrick Sheil is advising J.P. Morgan Securities and Nomura International as joint sponsors, joint global co-ordinators and joint bookrunners.
Private equity exits are turning 2013 into the best year for UK IPOs since 2010 however. Debevoise & Plimpton corporate partner David Innes added: ‘IPOs of strong companies with good trading records, combined with appropriate pricing and stable stock markets are always going to be an attractive proposition, private equity-backed or not.’
And while corporate mandates trickle in, partners have higher hopes for 2014. Skadden, Arps, Slate, Meagher & Flom partner Allan Murray-Jones told Legal Business: ‘I’m more confident about next year. Private equity is a trailing indicator of corporate activity.’