Tempton group continues to expand

Tempton intends to take over the entire operative business of its competitor Brilliant – with more than 30 branches and around 1,200 employees. With more than 9,000 employees at around 150 locations nationwide, Tempton will thus rise even further among the TOP 10 leading temporary employment agencies in Germany and consolidate its position as one of the most attractive partners and employers in the personnel services sector.

Download the full newsletter about the take over below (in German language only):



Read the news also on act legal Germany’s LinkedIn profile.

Distressed M&A Deal: Traditional foundry Walter Hundhausen successfully saved from insolvency

As of March 1, 2021, Beinbauer Group has acquired the traditional foundry company Walter Hundhausen GmbH from insolvency, supported by a senior team of the law firms act AC Tischendorf (Frankfurt), FINKENHOF (Frankfurt), WENDELSTEIN (Frankfurt), as well as held jaguttis (Cologne).

Walter Hundhausen, over whose assets insolvency proceedings were initiated on August 1, 2020, was previously part of the GMH Group from Georgsmarienhütte.

The transaction has now secured the jobs of a total of around 380 employees in Schwerte, among others.

The Beinbauer Group is one of the leading suppliers of castings for the commercial vehicle industry in Europe. The portfolio company owned by the market-renowned PE investor H.I.G , which has grown immensely over the years, combines three companies of the supplier industry under one roof and employs over 1,000 people at five locations in Germany and the Czech Republic. 

Background: act legal Germany has been acting as trusted advisor to H.I.G. for many years, also for its portfolio companies – especially in cases when a clear and strategic “problem solver” is required in special situations, beyond the purely legal aspects.

Seller: Dr. Dirk Andres (AndresPartner, Düsseldorf) as liquidator

act legal Germany advised HQIB on the acquisition of Ergosign-Group

Harald Quandt Industriebeteiligungen GmbH („HQIB“), the principal investment firm of the family Harald Quandt, acquired a majority stake in Ergosign-Group, the market leading digital agency with focus on user experience design in the German-speaking region.

The two founders, Dr. Marcus Plach and Prof. Dr. Dieter Wallach, remain co-shareholders and managing directors of the company. Together with HQIB, which has a long-term and sustainable investment approach, they aim to foster internationalization of Ergosign-Group and expand its service portfolio. 

Both parties have agreed not to disclose further details of the transaction.

Background:

HQIB invests in small and medium sized companies in the German speaking region that are leading in established and technologically sophisticated market niches with attractive growth potential.

act legal – with more than 390 corporate and commercial lawyers across central Europe – offers demanding corporate clientele high-level, cross-border, or regional legal advice being the attractive alternative to major international law firms.

act legal Germany advised HQIB comprehensively in all matters of this complex transaction.

Advisors HQIB:

act legal Germany: Dr. Fabian Brocke, LL.M. (Corporate/M&A, lead partner), Dr. Nina Bogenschütz (Employment); Dr. Nina Honstetter (Corporate, Employment); Sarah Landsberg (Corporate/M&A).

Pioneering real estate deal: Captiva acquires two new construction quarters in Bavaria from KRE Group

The Hamburg-based investment and asset manager Captiva has acquired two inner-city quarters with around 20,000 m² of rental space from the KRE Group in Bamberg, which are currently under construction. These large-scale projects consist of the “Lessing Quarter”, centrally located in Bamberg, and a quarter on the former site of a large brewery in Lohr in northern Bavaria. 

The majority of the rental space at both locations will be used for “assisted living”, complemented by additional medical services. In addition, the rental space of to be used for local supply, offices and boarding houses, emphasizing the urban character.

The properties will be part of the initial portfolio of the special AIF “Captiva Gesundheitsimmobilien Deutschland 2”. The fund is managed by IntReal as a service KVG.

The transaction volume amounts to approximately 75 million euros. The transaction, which is expected to close in the second quarter of 2021, was brokered by Cushman & Wakefield.

Background: act legal Germany has already advised KRE Group concerning acquisitions and sales on several occasions.

In this transaction, act legal Germany benefited from working in small teams with high “partner retention” ,thus navigating this complex deal to success in a short time.

Implications of COVID-19 on M&A Transactions

We face an unprecedented business environment, given the scale and speed with which the coronavirus situation is developing.

Our clients face various challenges – from protecting and supporting employees and customers, facing material supply chain challenges, to preserving liquidity and adapting to new and to a large extent unknown operating conditions. Also, pending transactions that were signed pre-crisis and that now may or may not be closed, need to be efficiently handled. And despite the background of these current market conditions, we expect that both strategic investors and financial sponsors will, for various reasons, consider and pursue new transactions in the coming months.

To assist clients in navigating the M&A process in this unprecedented environment, here are the key points for the near future from our perspective:

MAC Clauses

Material adverse effect or material adverse change (MAE or MAC) clauses have only been seen very rarely prior to the hit of the Corona crisis in Germany. And even if a purchase agreement contains such an MAE/MAC clause, it might not cover a pandemic such as COVID-19. Therefore, most buyers may not be able to invoke the termination of a transaction based on a MAE/MAC clause at the moment.

As a consequence going forward, the parties of an M&A transaction need to negotiate explicit language to address COVID-19 risk-allocation in the context of an MAE/MAC provision. We have seen this practice followed in response to past crises.

Termination rights

Parties should pay extra attention to the seemingly routine “outside date” termination provisions since government approvals, particularly mandatory merger clearances, and further closing conditions might get delayed under the current conditions. The risks of delay need to balanced between the parties, and so do potential changes in the target’s financial results if the period prior to closing is particularly long. 

In addition, it is now even more important to synchronize termination rights under the financing commitments on the one hand and the purchase agreement on the other hand.

Due diligence and reps & warranties

Extensive due diligence investigations to determine legal and financial risks and vulnerabilities become even more important – from reviewing supply chains to understand dependencies and potential shortfalls, analyzing key contracts to assess, inter alia, termination rights and force majeure provisions, to reviewing liquidity shortages and potential insolvency risks.

Moreover, specific representations (for example as to contingency planning, protocols, etc.) regarding the crisis may become more common in M&A deals in the coming months.

W&I insurance

As COVID-19 is a known risk, insurers will most likely specifically exclude coronavirus-related losses from their policy coverage. In addition, an insured’s “knowledge” of a situation typically excludes that situation from policy coverage. For that reason, the scope of specific diligence regarding COVID-19, which would also apply to post-signing “updates” from a seller, and their effect on the insured party’s knowledge should be carefully addressed with legal counsel in the context of W&I insurances.

Interim operating covenants

In the interim period until closing, sellers normally operate the target’s business in the “ordinary course” to protect its value. However, given the current economic situation, ordinary course might very likely be counterproductive and might actually be the last thing a buyer wants a seller to do – the parties will therefore need to discuss and tailor “emergency” measures to put the seller, without obtaining prior consent of the buyer, in a position to preserve the target’s business in this time of crisis. This applies particularly to liquidity maintenance, debt refinancing and working capital management, but also to exceptions for changes required by law or regulation.

Insolvency protection

Now even more than before, transactions need to be structured insolvency proof, avoiding unpleasant surprises and later disputes with an insolvency administrator or the authorities in the interests of all parties. This relates to analyzing and mitigating the risks for (a) the seller in case of an insolvency of the target and/or the buyer and (b) the buyer in case of an insolvency of the seller.

Employment reorganisation

Potential employment reorganisation features following closing should be addressed in the course of the transaction already – from adhering to essential employment-law procedures to negotiating the effects of potential post-closing reorganization issues on the purchase price.

Purchase price adjustments

Regarding the current uncertainties, we expect locked box mechanics will be rarely seen in the near future – in particular as the net debt and working capital of a target might significantly change in the interim period until closing. A balanced purchase price adjustment mechanism can therefore play an important role to provide for deal certainty.

JUFA Investment Group acquires five solar parks

act legal Czech Republic provided JUFA Investment Group with legal services in connection with its acquisition of five solar parks with a total capacity of 12 megawatts. JUFA purchased the photovoltaics from the Polish Fund EQUES Fotovoltaica, bringing the group’s portfolio to 32 photovoltaic power plants with a total capacity of 82 MW. This transaction makes JUFA Investment Group second amongst all owners of photovoltaic power plants in the Czech Republic.

In this acquisition, JUFA Investment Group acquired a 3.3 MW photovoltaic power plant. In comparison, the power plants near Čenkov (region Tábor) and near Kramolín (České Budějovice area) each have an output of 3.4 MW and the one near Petkovy (region Mladá Boleslav) has an output of 3 MW. The total value of the transaction (including bank financing) reached approximately one billion crowns.

In the past two years, JUFA has increased the number of solar parks it owns to 32, with most of the acquisitions realized by act legal Czech Republic, RANDA HAVEL LEGAL. The most important acquisitions include the purchase of one of the largest solar parks in the Czech Republic at the airport in Brno – Tuřany, with a total installed capacity of almost 22 MW. JUFA Group is successful thanks to its highly professional team, which includes representatives of RANDA HAVEL LEGAL, especially Alois ŠatavaMatyáš Kužela and Radek Šmíd.

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