Madgwicks presents to Meritas Global M&A and Private Equity Group

Madgwicks Corporate Team (Partners Rick Goldberg and Marina Papas and Lawyer Brendon Low) recently presented a hypothetical case study to the Meritas Global M&A and Private Equity Group meeting. The case study and ensuing discussion highlighted the legal issues that can arise during a cross-border acquisition by an entity entering the Australian market for the first time.

Madgwicks based their case study around our experience in partnering with international Meritas member firms assisting their clients to enter the region.  Over 60 meeting attendees from Meritas member firms across the globe were able to discuss their different approach in addressing these issues, with reference to their own jurisdictions.

Beginning with the question of whether an entity should establish a business branch or subsidiary company, our case study considered several of the key issues needing to be addressed when a business or transaction crosses multiple jurisdictions.

Some of the topics covered in the discussion were:

• Relocating a director to Australia and considerations on their employment arrangements visa requirements, company directorship and indemnity issues
• The approaches available for the acquisition by a foreign business of an Australian-based business including the choice of acquiring business assets or company shares, and the key areas to incorporate into legal due diligence such as PPSR, intellectual property and material contracts and lease implications
• Selecting the most beneficial purchasing entity, as well as the ‘ideal’ structure for the purchase consideration
• Engaging and retaining seller stakeholders and key staff within the acquired entity by seeking a balance of restraints, and earn-outs; and
• Addressing foreign investment, competition law and other regulatory requirements that can arise from a cross-border transaction.

The discussion raised some of the unique jurisdictional issues, in areas such as tax, corporate regulation and liability /risk, allowing them to be discussed and approaches identified to help solve them.

The Meritas Global M&A and Private Equity Group is made up of almost 500 members from across the globe who have experience in all types of transactions, including representing private equity funds, management groups and other institutional investors in a wide variety of local, regional and multi-jurisdictional transactions.

Clients of Madgwicks are able to utilise the depth of Meritas member firms’ experience in  jurisdictions around the world for advice on structuring, negotiating and executing international expansion, whether through acquisitions, distributorships, joint ventures, or simply branch office or subsidiary formation.

Do not hesitate to contact either Rick Goldberg or Marina Papas  if you would like to discuss your own situation in this area.