The crisis of the last few years has primarily been a crisis of leveraged companies. Most strikingly, it has demonstrated the weaknesses and shortcomings of traditional LMA documents – particularly where the interplay of different legal systems is involved. The expertise we have gained during the past few years from advising our clients on some of the most prominent and complex debt-for-equity swaps and refinancings is also beneficial to our clients during the current upturn. Or to quote Juve: “This law firm recommended for private equity can be considered one of the few that have been able to effectively take advantage of the opportunities presented by the distressed market.”
The buyout business has certainly changed over the past few years. A takeover of stock corporations raises issues of corporate governance. The provision of security for acquisition financing, one of the classic elements of securing leverage, is being looked at more critically today than it was a few years ago. Sponsors must exercise stronger influence on intercreditor agreements than in the past, when the rights of the various groups were often negotiated looking only at upside scenarios. This is especially true for management incentive programs.
The basic structures, however, have remained unchanged. While the demands on legal advisers may have increased, the crucial factor is still the ability to reach a deal with medium-sized sellers and their advisers, gain the trust of the management, incorporate complex structures into extensive contract documents on short notice, and “organize” the large number of parties and the extensive documentation involved.
Thomas Heymann and his team rank among the pioneers in the buyout market. From 1989 to 1996, they regularly advised the former market leader 3i on its first transactions in Germany. Subsequent activities included advising management teams and buyout funds in the mid-cap and large-cap sectors. “Thomas and his team really learned the ropes of the business with us - we have worked together successfully and closely for almost 20 years”, says Thomas Schlytter-Henrichsen, managing partner of Alpha and former managing director of 3i.
We advise on all aspects of private equity transactions, including LBOs, MBOs, MBIs, PIPE transactions, and the acquisition of minority interests. We advise our clients on the acquisition and its financing, and the participation of the management. We assist in the development phase and then implement the acquisition strategy. Following the acquisition, we support our clients and their portfolio companies throughout the entire investment cycle, providing advice on recapitalizations, leaver cases, and add-on acquisitions, including negotiations with the financing banks regarding possible refinancing measures. Finally, we provide advice on all types of exit strategies, including trade sales, secondary buyouts, and IPOs.