Freehills advised Australian mining services, fertiliser, consumer products and chemicals group Orica Limited on its $900 million purchase of the European, Middle Eastern, African, Asian and Latin American operations of global explosives company Dyno Nobel.
Partner Neil Pathak, who led the Freehills acquisition team, said the transaction was unique in the sense that it involved an industrial company forming a consortium with financial player Macquarie Bank to bid for foreign assets. A Macquarie Bank-led consortium agreed to acquire 100 per cent of Dyno Nobel from Scandinavian-based venture capital firm Industri Kapital for $2.2 billion and then sell part to Orica for $900 million.
Pathak said the competitive auction process for the assets, which was run out of London, had been a challenge. “There were a number of other bidders so there was competitive tension there,” he said. “The deal was contracted in a certain way to allay concerns the vendors had that there might be regulatory [issues] that would hold up the the deal.” This led to the deal being structured as a sale of the entire business to the Macquarie Bank consortium, with an on-sale of assets to Orica.
Freehills is advising Orica on all aspects of the transaction including negotiations with the owners of Dyno Nobel, negotiations with Macquarie Bank, anti-trust issues, the proposed capital raisings to fund the acquisition and managing the advice of foreign lawyers in approximately 40 countries.
“There were other issues such as tax structuring and dealing with regulators around the world,” Pathak said. “There is still quite a bit of work to go. The deal was signed on September 19 and now it has to go through two stages of completions. The Macquarie Bank part of the transaction will probably be completed in late November and as Orica gets regulatory approval it will be progressively completing in each country.
The Freehills acquisition team includes partner Selina Lightfoot, senior associates Doug Smith, Ben MacDonald and Safwan Said and solicitors Stefanie Allen and Lindsay Mackay. Robert Nicholson is leading the Freehills capital raising team, which includes Tim McEwen, Andrew Booth and Deborah Beeck. Bob Baxt is providing the anti-trust/competition law advice. General counsel, mining services group Peter Watson, and general counsel of the company, Janice Van Reyk led Orica’s internal legal team.