find the latest legal job
Senior Associate - Competition, Policy & Regulatory
Category: Other | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Work with a well regarded Partner · Sydney CBD
View details
Commercial Litigation Senior Associate
Category: Litigation and Dispute Resolution | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Lawyers Weekly Australia Partner of the Year 2016, Insolvency
View details
MULTIPLEX Regional Legal Counsel (Vic) | 7 to 10 years + PQE
Category: Generalists - In House | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Career defining in-house role · Tier One international contractor
View details
Junior Lawyer - Personal Injury Law
Category: Personal Injury Law | Location: Parramatta & Western Suburbs Sydney NSW
· Highly specialized practice · Challenging role with great opportunities
View details
IR Advisor/Member Advocate
Category: Industrial Relations and Employment Law | Location: St Leonards NSW 2065
· Permanent (0.8-1.0 FTE) role in a developing team
View details
Bakers on $120m acquisition

Bakers on $120m acquisition

LAW FIRM Baker & McKenzie has advised on the Australian-listed financial group DKN Financial Group Ltd (DKN) on it acquisition of two new groups, valued at $120 million.Lonsdale Financial Group…

LAW FIRM Baker & McKenzie has advised on the Australian-listed financial group DKN Financial Group Ltd (DKN) on it acquisition of two new groups, valued at $120 million.

Lonsdale Financial Group Ltd (Lonsdale) and Wrap Account Ltd (Wrap) will both add to DKN’s position as a major player in the Australian financial services market, the Baker & McKenzie team said. The acquisition will give it access to Lonsdale’s network of financial planning practices and over 250 financial advisers across Australia, as well as Wrap’s portfolio administration service business.

According to the lead Bakers partner on the deal, Richard Lustig, the deal had a number of interesting aspects for the lawyers involved. First, he said, it involved a doubling of the size of DKN.

But also, he told Lawyers Weekly, it “took the best part of a year to orchestrate”. He said that from the pre-planning stages to the actual implementation stage, about half that time involved pre-acquisitions structure and half involved implementation.

“The deal essentially involved the purchase of a financial planning business, where there are about 100 financial planning practises throughout Australia. And a critical thing in any successful merger and acquisition matter is maintaining the support of the people whose underlying businesses are being transferred across to the purchasing entity,” Lustig said.

Lustig said the deal also involved an interplay between three of four different aspects. “From a DKN perspective it involved a scheme of arrangement takeover of the Lonsdale financial group. It also involved the purchase of [Wrap]. The inter-conditionality of those two deals is relatively unusual because it meant that DKN needed to get shareholder approval as well as Lonsdale.

“It is relatively unusual for the acquirer to need to get shareholder approval to complete the deal. What was interesting here was that you had two expert reports. One at the Lonsdale level saying the arrangement was reasonable, and the second was from the Wrap level saying it was reasonable. This involved orchestrating a simulations and multi-faceted aspects or intertwining.

The Lonsdale acquisition was affected by two inter-conditional schemes of arrangement, being a scheme relating to Lonsdale ordinary shares and a scheme for Lonsdale redeemable preference shares known as practice shares.

Lustig said: “So probably the most interesting feature around the transaction involved the creation of essentially a loyalty scheme whereby the holders of the financial planning practices were given an incentive to actively participate in the merged entity following the acquisition. So this involved some interesting structuring; a form of [DKN practice shares], a form of reward and loyalty system which operates for a two-year period following the completion of the deal. So in a sense I would regard that as one interesting or unusual aspect,” he said.

The consideration for the scheme involved the issue of DKN practice shares, which are converting shares designed to function as a loyalty arrangement, requiring ASX and shareholder approval, the firm said. Contractual arrangements were concluded with Zurich in respect of the simultaneous acquisition of Wrap, which was formerly owned by Zurich, and the marketing of Zurich products within the DKN network.

The Baker & McKenzie team advised on funding arrangements for the acquisition, which involved bank financing and a rights issue under the Corporations Act provisions, as well as dealing with counter offers for Lonsdale, mutual due diligence, two expert reports, shareholder approvals and a claim settlement.

Lustig said: “This has been an exciting and interesting project to work on over an extended period. I was fortunate to have the support of my talented and skilled colleagues who efficiently dealt with the challenges presented in this complex transaction. It has been a rewarding transaction for all concerned.”

Mallesons Stephen Jaques acted for Zurich in relation to the transaction, and Corrs Chambers Westgarth acted for Lonsdale.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Bakers on $120m acquisition
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Human body, illegal organ trafficking, ALHR
Sep 22 2017
Australia poised to combat illegal organ harvesting: ALHR
The Australian Lawyers for Human Rights are calling for changes to the law so that organ trafficking...
Online service, barristers, BarristerSELECT, Stephen Foley
Sep 22 2017
New online service leverages barristers’ clerks to aid briefing
A new online tool has been launched to help NSW solicitors find the most suitable barristers for the...
NSW District Court judge, Tim Gartelmann SC, next appointment,
Sep 22 2017
Silk replaces outgoing NSW District Court judge
A barrister has been named as the next appointment to the NSW District Court, following the retireme...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...