The logistical difficulty of efficiently co-ordinating an extended financial, legal and commercial team across jurisdictions, involving a lead corporate finance adviser, lawyers, accountants, pension advisers, environmental consultants and others is a major challenge of a cross border transactions.
Below are our thoughts on some measures that can assist you in managing the deal team.
- Appointing lead counsel. Appoint a member of one of the better known global legal networks, such as ADVOC or Lex Mundi, who can ensure legal support in whatever jurisdiction is required, and will be familiar with co-ordinating cross-border transactions.
- Engagement letters. The engagement letters of the various advisers across the relevant jurisdictions and disciplines will address their respective:
- Liability limits.
- Delivery timetables.
- Translation costs.
- Local professional requirements.
They will differ and will be invariably drafted to the advantage of the adviser. Negotiating engagement letters can be an unwanted distraction at a time the buyer wants to concentrate on the target. The buyer can itself (or commission its trusted lead counsel to) negotiate terms of engagement with the other advisers at an early stage before their respective mandates are confirmed. In some cases it is appropriate for the client relationship to be directly with the buyer, in others lead counsel can act as "client".
- Virtual data room. Setting up a virtual, buy-side only data room can provide a point to store and share:
- Contact lists.
- Information requests.
- Responsibility schedules.
- Due diligence reports.
- Other information generated by the buyer team.
Choose data room software that works intuitively and does not require users to download extra software or cookies. Wherever possible, set permissions to allow printing and download of documents.
- Communication protocol. Lead counsel should establish a communication protocol within the deal team. This can include:
- The language to be used for all communication.
- Use of the dedicated transaction deal room/data room.
- Group e-mail addresses.
- Weekly conference calls and status updates.
- The extent to which communication should be made directly to the client or routed through lead counsel.
- Maintenance of a global contact list of all firms and individuals involved.
- A transaction timetable with critical dates including public holidays in the jurisdictions involved.
- Contact list. For maximum efficiency everyone on the buyer side needs to know the role and contact details of everyone else on the team. It makes sense to keep prominent and updated in the buyer data room a contact list of all participants.
- Regular conference calls. If time zones allow, a regular, for example weekly, conference call among the due diligence team leaders across the jurisdictions, reporting progress and delays, can be essential to maintain momentum. For assistance in setting a convenient time across several time zones, see www.timeanddate.com/worldclock/meeting.html
- Data analytic agencies. Information normally accessible from public registers may not be available. In such instances global data analytic agencies such as Dunn & Bradstreet, Kroll and CRISIL, may be able to provide a degree of due diligence.
- Local variations: impact on timetable. Factors such as the following may differ from what the buyer is used to in its own jurisdiction, and must be factored into the timetable from the outset:
- Regulatory compliance.
- Pre-sale restructuring.
- Creditor and shareholder protection.
- Specialist due diligence reports (for example, environmental)
This insight formed part of a larger article on "Structuring and managing cross-border private acquisitions", published in Practical Law.