what's in the news

Pitmans, a leading commercial law firm in the Thames Valley, has acted on behalf of the 3 selling shareholders on the disposal of the entire issued share capital of Algreta Solutions Limited (trading as ‘Catalyst’) to LF Europe Limited, part of the Li & Fung group of companies, which completed on 29 February 2012 for an undisclosed consideration.  Leighton Bower at Rouse Partners LLP provided the corporate finance advice to the selling shareholders and at Pitmans the transaction was led by Corporate Partner, Adam Dowdney, assisted by Mark Metcalfe and various other specialists throughout the firm.

Commenting on the transaction, Paul Clarke, Managing Director of Catalyst, said:
“I was very impressed with the whole team, headed by Adam Dowdney, at Pitmans; the transition was far from easy as Algreta owned several companies around the world (China, USA, France as well as the UK). Sometimes working late into the night across many differing time zones the Pitmans team were tireless in their drive to “do a good deal” for their clients. Looking back now it’s hard to imagine another firm with the capability to deliver a “sale” of such complexity in the time scales set – a genuine first class job very well done. ”

Adam Dowdney, Pitmans Corporate Partner added:
“It was a pleasure to work with Paul Clarke and Peter Dowse and Leighton Bower of Rouse Partners LLP on this transaction.  This deal was complicated by a number of factors, including the obvious time delays of dealing with a Hong Kong based purchaser and legal advisers and some complex deal structuring and earn-out mechanisms, however, the experience of the team facilitated getting the deal over the line within the required time frame to the satisfaction of all parties involved.”

Catalyst are a major independent supplier of security tags to the retail world. The name Catalyst is synonymous with the highest quality and value. Catalyst are dedicated and focused on the efficient supply of retail tags. A major part of Catalyst’s success has been the development of a complete and comprehensive product range, linked to a commitment for excellent value. Whether you need tags for Sensormatic®, Checkpoint – Meto, Nedap or WG systems (or many of the other brands) Catalyst have them in stock, and because it’s direct from the manufacturer they represent truly excellent value.

Leading Thames Valley law firm Pitmans LLP advised CACI Ltd in purchasing Tomorrow Communications – a UK based consultancy specialising in providing network design, data centre and managed services to large enterprise accounts in the financial services, online gaming and media industries for an undisclosed sum. The deal was completed on 1 February 2012.

Andrew Peddie, Corporate Partner, Reading, led the transaction team. He was assisted by Mark Metcalfe, a Corporate and Banking Solicitor with Pitmans.

Tomorrow Communications is a technical services company specialising in network and associated support services. These services range from network design, implementation and support to project management, data centre services and enterprise solutions. Their customers include leading financial, gaming and media organisations. Tomorrow Communications has appeared in the Sunday Times Tech Track 100 for four years.

Tomorrow Communications will join CACI’s telecommunications division and will continue to operate from its Waterloo office in London.

The acquisition will support CACI’s strategic expansion objectives of taking its existing telecoms solutions portfolio into large enterprise accounts, whilst also enabling telecoms clients to benefit from new enterprise network design, data centre and managed services capabilities.

Greg Bradford, Chief Executive of CACI commented:

“This acquisition further extends the range of solutions and consultancy services that we offer our clients. Tomorrow Communications’ expertise and track record in the design and support of enterprise networks will substantially enhance our current network design and OSS consultancy services provided to telecommunication service providers across the UK. We’re delighted to have them on board.

We were also very pleased to continue our working relationship with Andrew Peddie and his team at Pitmans LLP.  This is the twelfth completed acquisition that Andrew has worked on with us over the years and as before, he and the Pitmans team have delivered the service we needed to make the deal happen.  As ever, issues of complexity arose during the negotiations but with Andrew’s help ways forward were found.”

Andrew Peddie of Pitmans commented:

“We were delighted to complete another transaction with CACI, during the course of an active few months for the Pitmans Corporate team.  Transactions of this size and shape, and in this sector, fit firmly within our expertise and we were able to provide an efficient and cost effective service based on a long understanding of the approach of the client to deal-doing.”

Courtesy of Thames Valley Business Magazine February 2012

What could 2012 offer you and your business? For many Thames Valley-based businesses, 2012 is a year for optimism, opportunity, growth and investment, writes Patrick Long, Banking & Finance Partner, Pitmans LLP.
 
Respondents to Pitmans “Funding your Business” Survey , conducted in December 2011, clearly felt the UK economy’s recovery would remain in recession for the majority of 2012, but it is against this backdrop that over 60% of Thames Valley based respondents said that they anticipate a year of steady growth in 2012. This is a marked contrast to respondents from businesses which lie outside of the Thames Valley region, who predominantly forecast trade at similar levels as 2011.

The Thames Valley has long been labelled the economic powerhouse of the UK, thanks largely to its diversity, strong skills based and excellent infrastructure – attracting top talent and global businesses from software, manufacturing, pharmaceutical, utility and construction sectors.

Click here to view the summary of Pitmans “Funding your Business” Survey.

For further information on the survey, please contact Pitmans Banking & Finance team.

Patrick Long
Partner
T: +44 (0) 118 957 0488
E: plong@pitmans.com

Award winning law firm Pitmans LLP has acted on behalf of David Macrae, the Managing Director of Popshots Studios Limited, a distributor of 3D pop-up greetings cards, stationery and promotional and marketing materials in Henley-on-Thames, Oxfordshire. He has acquired Popshots Studios Limited in a management buy-out from the Up With Paper group of companies, based in Mason, Ohio, USA, for an undisclosed consideration.

The transaction was led by Pitmans’ Corporate Partner Philip Weaver, Corporate Partner Adam Dowdney, Corporate solicitor Carolyn Butler, and Banking solicitor Mark Metcalfe.

Commenting on the transaction, David Macrae said “We were referred to Pitmans by an associate and were delighted with the speed and thorough handling of our time-sensitive purchase.”

Adam Dowdney, Pitmans’ Corporate Partner said: “We were delighted to assist David in this management buy-out of a business in which he has been involved for some time. The deal was completed in a very short time-frame, which reflects the flexibility and strength in depth of the Corporate and Banking teams we have here at Pitmans. We wish David every success for the future.”

The survey is now closed.

The results will be published in January 2012.

For your copy, please email poppy@pitmans.com

Courtesy of Thames Valley Business Magazine June 2011

Credit markets may still be depressed when compared to their 2007 highs, but banks are lending where the fundamentals are in place.

In February of this year, Project Merlin was proudly unveiled by Chancellor George Osborne as a way to ensure the UK’s four biggest banks (plus Santander) would lend more during 2011 than they did during 2010. With companies across the land claiming that credit was impeding their business activities, the agreement looked like a positive move for the UK economy.

But less trumpeted has been the inherent conflict between Project Merlin and the Basle III global banking standards. Designed to improve the resilience of the international banking sector, the standards set new rules about how much capital banks have to keep in reserve as a cushion against defaults. Essentially, it reduces the amount a bank can lend relative to the level of capital it holds; however desirable this may be, it is hard to reconcile with the aims of Project Merlin.

With the Basle III standards set to be fully implemented in 2012, banks will spend 2011 gearing up for their adoption. This would suggest that lending will continue to be restricted over coming months.  Banks are still lending, but you need to be in the right sector.

From a property perspective – the sector responsible for the majority of bank losses, and therefore a good indicator or how lending is returning – a future income stream is vital. As such, healthcare, nursing home and education projects are proving to be attractive to banks for financing.

But away from such markets, creative solutions need to be found. A classic ‘catch 22’ would be where a bank won’t finance the construction of a building until a pre-let agreement with an occupier is in place, while a potential occupier does not feel able to commit until the building is at least partly constructed.

In such a situation, alternative bridging financing needs to be found; venture capital or similar opportunity funds can be approached for investment, getting the project up-and-running before a bank provides the remaining necessary finance. Again, it is the commercial edge (ie: the promise of future cashflow through rent) that provokes interest from banks and other investors.

But with lenders returning to the market, could the current situation evolve so that, once again, competition between banks drives down lending costs? In the short-to-medium term, this seems unlikely. Interest rates cannot remain at such benign levels forever, and with pressure to increase capital reserves, banks will need to keep margins relatively high.

Looking specifically at property transactions, leverage is set to fall further before it starts rising again. In addition, the ongoing focus on cashflow rather than loan-to-value ratios will see loans become more like their non-property equivalents. LTV ratios are a blunt instrument when used as a lending covenant, and cashflow – i.e. the ability to meet the repayments – is a much more stable indicator. Whether bankers will be able to resist the apparent safety of LTV ratios as the recovery continues remains to be seen.

What has become clear is that bank finance is only available for firms and projects that represent a suitably low risk to the lenders. But it is also apparent that different banks have differing appetites for specific kinds of lending; the trick is to know which banks are in each market. It is something that Pitmans’ banking and finance team has a proven track record in.

Watertight agreements

But where finance has been verbally agreed with a bank, an asset based lender or other financier, there remains a curious tendency of borrowers to take their foot off the gas when it comes to negotiating formal finance agreements and security. Despite hard upfront negotiation of the commercial headline terms to secure the best deal possible, the documentation often fails to reflect the deal specific terms that the borrower thought had been agreed.

This lack of due diligence with the paperwork – and it is a function of the power that lenders hold within these negotiations – can lead to too much latitude being given to the lender. Small differences in a loan agreement or a security document may seem minor at the time of signing, especially if the finance is time-critical, but should a specific situation arise then the borrower could be left exposed where previously it considered itself to be safe.

There is precious little comfort for a borrower finding out too late that its assets might be seized due to a seemingly minor infringement of the loan terms. Only effective and timely due diligence and sensible negotiation of the transaction documents before signing them can guarantee protection from such happenings.

You may have to pay for expert legal advice to ensure the documents reflect the deal but when making such an investment can a borrower realistically afford not to?

Patrick Long
Partner, Banking & Finance
T: 0118 957 0488
E: plong@pitmans.com

Jim Meechan
Banking Consultant
T: 0118 957 0220
E: jmeechan@pitmans.com

Pitmans LLP works with Oxford Brookes University to seal deal for major construction work

Leading Thames Valley law firm Pitmans has been working with Oxford Brookes University to secure a financing deal on a multi million pound construction project.
 
Pitmans represented the University in negotiating terms with Barclays on financing the deal.
 
Patrick Long, partner and Head of Banking and Asset Finance at Pitmans, says: “Universities are in a position where they need to invest in facilities to attract students, whilst being mindful of challenging budgets and ensuring that the finance available goes as far as possible.  Investment in education is a hot topic at present and this is one of a number of deals that are being worked on at Pitmans to help generate activity in the sector.”
 
The work will include the installation of a new university library, state of the art lecture theatre and social facilities for students.
 
Joanna Bielby of Oxford Brookes University, comments: “Oxford Brookes has an excellent reputation for delivering first class vocational degrees and qualifications to top rate students. The team, led by Patrick Long at Pitmans pushed hard for the best possible terms, which has allowed us to continue developing the University. These new facilities will further our offering to our student base as well as to the wider community.”