24 corporate finance Navigating minefields
Saionton Basu of Penningtons Solicitors LLP considers how to establish successful cross-border joint ventures
Cross-border joint ventures (JVs), involving two or more entities sharing resources and benefits, have become a common tool to pursue business opportunities in the ever shrinking global marketplace. At the outset, careful planning, financial and legal analysis and due diligence exercises are required to establish key foundations of the joint venture.
Numerous areas require critical attention while structuring JVs:
• Confidentiality agreement – this will protect confidential information disclosed by each party to the other.
• Exclusivity agreement – the parties are bound to incur costs and divert resources to negotiating the terms of the JV agreement. An exclusivity or lock-out agreement ensures that they have a period of time in which to negotiate solely with each other.
• Due diligence exercise – the exercise allows the parties to identify and understand the issues and risks associated with the JV proposal. Appropriate measures can then be taken to address them.
• Entity selection – the business vehicle used for the JV will depend on the benefits and drawbacks of each type of entity, and the local
Focus on Manches
‘Manches LLP’s partners and staff are highly responsive and exceed expectations’, often making the firm a ‘preference to many big- name London firms’ – The Legal 500, 2010
The Thames Valley has attracted some of the world’s leading technology, telecoms and e-commerce companies in recent years and Manches are recognised by the legal directories as one of the leading firms to focus on this market, writes Chris Shelley of Manches. Our technology team excels at advising both suppliers and end-users in the public and private sector, from high-growth start-ups to major international companies. Combined with our market-leading intellectual property practice we have one of the largest teams outside of London and are able to offer a first class service to clients which other firms find hard to match.
Some of the interesting work we have been involved in recently includes:
• Advising Basilea Pharmaceutica on the terms of a licence, co-development and co-promotion agreement with a global pharmaceutical company relating to our client’s phase III anti-fungal product. Under the terms of the agreement, our client received an upfront
www.businessmag.co.uk
laws, tax and commercial environment in which they operate. Listed companies have a number of additional issues to consider.
• Interests and payments – the nature and extent of the interests and resources they will contribute to the JV, and the means by which they will receive financial and other benefits in return, will be of key importance to the parties.
• Completion – normally certain conditions need to be satisfied before the transaction can complete. They commonly include third party consents for key contracts and properties, and corporate and regulatory approvals.
• Dispute resolution and deadlock – this is a complex area, and much depends on whether a party is a minority shareholder. Options to deal with this area include escalation to senior management of the parties, forced sale or purchase of a party’s shares, trade sale and insolvency.
• Governing law – the governing law will depend on a number of factors, not least the suitability of the local laws and legal system.
• Country risk – cross-border JVs situated in emerging markets like India will often need to factor in particular local law requirements and business customs. We have a specialist team with dual qualified lawyers which blends
payment of approximately £50 million and is eligible to receive up to £300m in additional payments on achievement of certain milestones as well as double digit, tiered royalties on sales.
• Advising Oxford Biodynamics on the terms of a major licensing deal with a major private healthcare provider in Australia under which the company would supply certain proprietary chemicals and reagents to the Australian company together with a protocol and IP licence to enable that company to provide screening services for skin cancer in Australia, New Zealand, Singapore and Malaysia.
• Acting for Kimal plc on its acquisition of the intellectual property, manufacturing assets and inventory of the IVantageTM infusion pump from US-based Delphi Medical Systems.
• Advising Indigix a spin-out company developing a novel platform technology on the terms of the licence of its core IP from its founding academic institution and on the terms of related consultancy agreements with key academics.
• Advising the Delivery of Advanced Network Technology to Europe (DANTE) in relation to its first IPR licensing policy in respect of DANTE’s Geant project, which is financed by the EU. This complex project involved the analysis of the results of an IPR audit carried out by a third party and developing a licensing policy (and drafting template documents) that addressed the needs of DANTE’s pan-European membership. The policy also included a significant element of open source
software analysis and the drafting of a bespoke Geant open source licence.
• Advising Demica, a global provider of capital management technology and services, in relation to a complex service arrangement with one of its clients, a major global investment and retail bank, which involved structuring options to acquire licences to a software-as-a-service solution.
• Advising Arieso, a services provider to the telecommunications industry, in relation to its contract negotiations with telecommunications companies.
Our offering goes from strength-to-strength with the imminent arrival of a new technology and outsourcing partner from a leading technology firm to head up our technology and outsourcing practice in the Thames Valley. The team was also strengthened by the recent arrival of life sciences lawyer Kerry Sharp who was previously in-house counsel at Broadcom having also worked for Bird & Bird and Linklaters. These appointments reflect our on-going commitment to the technology sector in the Thames Valley as it continues to evolve and innovate.
Details: Chris Shelley, head of technology and media 0118-9822640
chris.shelley@
manches.com www.manches.com
Saionton Basu
international transactional experience with a track record of working with Indian clients and deals.
This article provides a sample of priority areas in structuring a JV. Penningtons would recommend obtaining legal and tax advice at the outset to ensure maximum return on investment.
Details: Saionton Basu
saionton.basu@
penningtons.co.uk www.penningtons.co.uk
THE BUSINESS MAGAZINE – THAMES VALLEY – JUNE 2011
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44