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US calls on McCulloughs’ diligence

MCCULLOUGH ROBERTSON had a week to complete the first phase of due diligence on the Australian subsidiaries of US-based firm Intergraph Corporation for a group of private equity investors in…

user iconLawyers Weekly 29 September 2006 Big Law
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MCCULLOUGH ROBERTSON had a week to complete the first phase of due diligence on the Australian subsidiaries of US-based firm Intergraph Corporation for a group of private equity investors in the company.

Hellman & Friedman LLC and Texas Pacific Group finalised their purchase of Intergraph for US$1.3 ($1.7) billion at the end of last month.

Intergraph is a global provider of spatial information management software and has a substantial number of Australian clients, many of them government agencies such as emergency services.

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McCulloughs were brought in on the deal by Simpson Thacher, the lead US law firm handling the transaction.

Reece Walker, senior associate in the firm’s corporate advisory group, alerted the purchasers to a number of issues, including the requirements of Australian employment and intellectual property law, Australian securities and government contractual requirements.

“We needed to ensure our clients had an appreciation for the key differences in the Australian legal environment and factor that into the commercial parameters,” he said.

“In employment law, [for instance], there are lot of potential liabilities that do not exist in the US.

“We had to analyse the contracts that exist, and there were some intellectual property issues. [Intergraph] is a software based company, so we had to work through some subtle differences in IP law between the US and Australia.”

He said their clients needed to ensure the change in ownership would occur smoothly, and guarantee the fulfilment of existing client contracts.

Partner and head of the intellectual property group at McCulloughs, Malcolm Bratney, conducted a detailed evaluation of outsourcing arrangements.

“In a matter like this, it is critical to identify any potential issues and bring them to the fore early,” he said. Outsourcing arrangements are often pretty detailed, but there are usually one or two things that can make or break a deal.”

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