mARCH 2012 30 Marsh www.lawyer-monthly.com

The Increasingly Global World of Private Equity

marsh talks Private Equity and m&A

Marsh is a global leader in insurance broking and risk management. with approximately 25,000 employees the company provides advice and transactional capabilities to clients in over 100 countries. This month, Lawyer Monthly exclusively interviewed Daniel Max, the co-practice head of Marsh’s UK Private Equity and M&A practice. Here, Daniel discusses with us his recent work, the trends reflected in UK and cross-border PE and M&A transactions, the legal implications and the challenges raised by multi-jurisdictional work.

w

ithin his role as co-head of Marsh’s UK Private Equity and

M&A practice, Daniel is responsible for the group of people who are involved in the advisory and transactional solutions that relate to M&A for Private Equity (PE) and corporate clients.

Principally, Daniel works with PE

investment directors and corporate clients, but in addition to this, his team also works closely with what are referred to as the ‘centres of influence’ - the other intermediaries that sit between the deal principals; most commonly the lawyers and accountants that are involved the process of the transaction.

When asked about the most common

legal implications that arise when dealing with PE transactions, Daniel explained: “There are three that crop

up most regularly, the first one is the structure of the sale and purchase agreement surrounding the warranties and indemnities provided by the seller. This relates to what type of warranties and indemnities the seller is prepared to provide, and on the buyer side, what the buyer is prepared to accept.

“The second thing that we regularly

see is substantial negotiation around the limitation of liability, where the seller is looking to the greatest degree possible to minimise contingent liability, and the buyer is looking to try and maximise the amount of recourse that they have in the event of an issue cropping up post-completion.”

Daniel continued: “The third point is something that we have seen occurring more and more since 2008 and 2009 in a lot of deals we see, this is the buyer’s

general concerns around the strength of covenant of the seller. Buyers are often pushing for escrow or retentions but, understandably, there is a resistance to that and there is always some sort of discussion around the strength of covenant of the seller, given that perception of financial standing today is not quite what it was some years back.

“There are always other points that

are specific to the deal but these three are the ones in my opinion and experience that tend to crop up on every deal.”

Turning to recent M&A transactions

that the team have worked on, Daniel explained that most of the deals are cross-border. He said: “Even if it is a UK transaction there tends to be a cross-border angle to it as it is very rare these days to find a company that