Dealwatch: Elite Corporations Attain $ 4.7 Billion Signature Aviation Deal As Euro SPAC Market Anticipated To Fly

Private equity heavyweights landed major mandates as the bidding war for Signature Aviation took an exciting turn, while US-powered Special Purpose Acquisition Companies (SPAC) outside the US are likely to grow in excitement.

Kirkland & Ellis, Slaughter and May, Cleary Gottlieb Steen & Hamilton and Linklaters acted on the proposed acquisition of Signature Aviation by a consortium – Brown Bidco – including Blackstone, Cascade and Global Infrastructure Partners (GIP).

With the recommended cash acquisition, Signature shareholders will receive USD 5.62 per share in cash and value the total share capital of the aviation service provider listed on the London Stock Exchange at USD 4.7 billion.

The move brings another twist in history for the public-private transaction as the offering brings in a cash offer made by GIP in January for $ 5.50. Signature Aviation has been fiercely contested, and the Carlyle Group is said to have been keeping an eye on the company as well.

Cascade Investment, Bill Gates’ asset management company, already had a 19% stake in Signature Aviation, and as such, the takeover panel had to be asked in an unusual move for joint provider status.

The deal ultimately calls for Blackstone Infrastructure and Blackstone Core Equity to own 35%, GIP 35% and Cascade 30% of Bidco.

Kirkland advised Blackstone and the Consortium with a team led by David Holdsworth, Dipak Bhundia and David Higgins, which also included debt finance partners Stephen Lucas, Kirsteen Nicol and Melissa Hutson, tax partners Timothy Lowe and Mike Beinus, and antitrust and competition partners Mike Belonged to Robert-Smith and Paula Riedel.

Higgins told Legal Business, “We believe that given the opportunities for larger stock cards and the perceived value in the public markets, financial investors will continue to be very interested in private transactions.”

Holdsworth added, ‘Signature Aviation has been a complex business and it has been fantastic to bring to market. Since Canary Wharf there haven’t been many cases of co-vendor filing, so it was great to add to this list. It was a coincidence that we also helped Pamplona with Signature Foods – Signature Deals for Kirkland! ‘

Cleary advised Cascade on London-based transaction partners Michael Preston, Sam Bagot and Michael James as well as tax partners Meyer Fedida in New York and Richard Sultman in London.

The team also includes London-based financing partner David Billington and Paul Gilbert, who advises on antitrust law and foreign direct investment.

Speaking to Legal Business, Preston noted, ‘Private equity (PE) funds have a good cash position and US dollar funds in particular have been drawn to UK assets due to the falling sterling value and falling share prices. This has resulted in a huge surge in US funds doing business. These are the prerequisites for a strong public to private market.

‘PE is an attractive buyer because it is a single point of contact for future capital needs. If the company has plans to expand, there is a shareholder with a huge bank account. It is also attractive if you are a director or senior management officer, as private equity offers stock incentive programs to senior management. ‘

Bagot added, ‘There will be a continuation of syndicated deals where private equity firms come together to bid for assets. What is interesting about Signature Aviation is the premium of more than 50%, while before it was in the range of 30%.

‘Audiences who deal with these situations are becoming more and more sophisticated. They are increasingly focused on doing what is right for the shareholders, getting the best price, and reaching out to other potential bidders to get it done. ‘

Slaughters worked for Signature Aviation with a team that included corporate partners Robert Chaplin and Andrew Jolly, employment and incentive partner Phil Linnard, competitive partner Anna Lyle-Smythe, pension partner Sandeep Maudgil, and finance partner Azadeh Nassiri.

Linklaters advised GIP on this and its previous one-off offer with a team led by London-based private equity partners Chris Boycott and Nick Rees. Nicole Kar in London and Jonathan Gafni in Washington DC led the antitrust and overseas investment aspects of the transaction. The London partners Alek Naidenov and Tom Waller advised on the financing. The team also included retirement partners Claire Petheram and employment partners Sinead Casey and Jillian Naylor.

Elsewhere, avid observers of the now ubiquitous SPAC deals will have noticed two deSPAC deals in the past few days, particularly among non-US companies listed on US stock exchanges.

The deSPAC is the process by which the combined SPAC and target company are listed in an outcome similar to an IPO that spans M&A and capital markets.

Skadden advised on both deals and was very active in this area. Speaking to Legal Business, Lorenzo Corte, co-head of the M&A group, commented, “With deSPACs, you can use forecasting to market a target company to investors, which you cannot do in the context of a US IPO. Many high-growth or relatively young companies do not have a proven sales record. It is therefore important to be able to present projections to potential investors in order to better market the company. The PIPE process also enables a company to gain some insight and determine which investors will be brought into the company through the de-SPACing transaction. ‘

Skadden worked for Alussa Energy in combination with FREYR, a Norway-based developer of next-generation clean battery cells, to be listed on the first Nordic deSPAC on the New York Stock Exchange.

The combined company will be renamed FREYR Battery and aims to accelerate the decarbonization of transportation and energy systems by delivering the cleanest, most affordable batteries in the world. After the combination, the pro forma equity value of the combined company would be approximately $ 1.4 billion.

The Skadden team in London was led by Danny Tricot and Denis Klimentchenko, while Wilson Sonsini partner Mark Baudler advised FREYR.

Skadden advised Kismet Acquisition One, a Nasdaq-listed SPAC, on its first $ 1.9 billion business combination with Nexters Global on its first deSPAC deal with a Russian company.

Nexters Global is the owner of the blockbuster mobile game Hero Wars and one of the top five independent game developers in Europe developing mobile, web and social games that are used by millions of players worldwide. Kismet Acquisition One is the first SPAC founded by Ivan Tavrin, TMT entrepreneur and managing director and founder of the Kismet Capital Group.

The Skadden team in London and Moscow was led by Pranav Trivedi and included corporate partner Denis Klimentchenko and Dmitri Kovalenko, London tax partner James Anderson, and a Palo Alto team corporate partner Gregg Noel and IP and technology partner Ken Kumayama. Latham & Watkins acted for Nexters on the transaction with an M&A and capital markets deal team led by partners David Stewart and Ryan Maierson.

Skadden’s Denis Klimentchenko noted a significant increase in the number of American SPACs looking for European destinations to list in the US.

‘European exchanges are picking up speed – Stockholm has changed the rules to attract SPACs and Amsterdam is more flexible. There were more requests from sponsors. We are at the beginning of a wave and there is increased interest and demand. ‘

“2020 was the year of the SPAC IPO and 2021 will be the year of the deSPACs,” concluded Klimentchenko.

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