DealMaker Q&A

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TTR DealMaker Q&A with Kreab corporate and financial communications Partner Pablo Zamorano

Pablo Zamorano is a partner within the corporate and financial communications departments of Kreab in Spain. He specialises in corporate and financial communication with experience in media and communication strategies (external and internal), as well as in steering committees training. Pablo has 15 years of experience in communication consulting, advising national and international companies from different activity sectors.

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TTR – How would you describe Spain’s transactional activity at the beginning of 2020? Do you find any differences with regards to 2019?

P. Z. – At Kreab we believe that the mid-market will continue to perform well in Spain in the coming years. This good behaviour will be encouraged both by the attractiveness of the Spanish companies -which have to increase their size to bridge the gap with the European average-, and also because there is a lot of liquidity in the market and financing facilities, both for private capital funds and industrial buyers.

On the other hand, the future of megadeals is always uncertain, as they depend on several factors in order to be closed. In any case, it is well known that there are large international funds with their sights set on Spain that are looking for large companies in which to invest their capital.

TTR – Within the Spanish M&A transaction market, who is the target of a communications consulting firm? What type of corporate transactions usually require the presence of a communications advisor?

P. Z. – As a communications and public affairs consultancy firm, Kreab’s targets are both companies that want to carry out any kind of financial transaction as well as private capital funds. Additionally, many law firms and investment banks are increasingly relying on us to offer an integrated advisory service to their clients. This is because communication has become a strategic factor when closing transactions, both from an external communication point of view -with shareholders, investors, journalists and the market in general- and from an internal communication point of view.

In general, the more complex an operation is and the greater the number of actors involved, the more important it is to use communication as a tool for all stakeholders to know, understand and value the rationale of the deal. Without a doubt, communication is a key element to improving a company’s reputation and perception, helping to send a signal to the market that the asset is for sale or that the sector is booming, thus attracting a greater number of buyers and creating an environment that should have a positive impact on the final price paid for the company. In today’s world, communication adds value to financial transactions.

TTR – Which elements of the communications advisory process do your clients in the M&A sphere value the most? Why?

P. Z. – One of the aspects that Kreab’s M&A clients value the most is our 360° view of how financial transactions are structured. On the one hand, we integrate communication in a global way and we adapt it to all stakeholders, developing not only external but also internal communication techniques (the internal audience is increasingly a key factor in the success of transactions), as well as managing institutional and regulatory issues. In addition, we coordinate with legal and financial advisors as an additional element of the team that contributes to the success of the transaction.

Another aspect that our clients highlight is our experience and knowledge, not only of communication issues but also of financial aspects, which enables us to offer unique, comprehensive and specialized advisory services, which are difficult to find in other communication consultancy firms in the market.

Finally, I would like to emphasize that we have an extensive network of contacts based on trust and professionalism with the key journalists who cover the sector, both nationally and internationally.

TTR – Would you say there is a growing demand for communications consulting services in M&A transactions? Why?

P. Z. – Every year, Kreab advises on an increasingly greater number of M&A transactions, making it the communications consultancy firm that has advised on the highest number of transactions in Spain in recent years. This is because we have clients who have trusted us for more than 15 years and, when they see the positive results of our work, they recommend us in the market. This has enabled us to build a steady portfolio of more than 60 financial communication clients, as well as other clients who hire us for specific projects.

Our vision is that the demand for specialized communication services will continue to grow steadily in a world that is increasingly interconnected and in need of conveying transparency and a sound business practice in a coordinated manner between the different actors and regions involved. In this sense, it is also important to highlight that Kreab has a network of 25 offices worldwide, with a strong presence in Latin America (Colombia, Chile, Ecuador, Peru, Bolivia, among others) and with specialized teams that offer this service on a global basis.

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Versión en español

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Pablo Zamorano es partner de comunicación corporativa y financiera de Kreab en España. Está especializado en comunicación corporativa y financiera con experiencia en relación con medios y establecimiento de estrategias proactivas de comunicación para clientes. Cuenta con casi 15 años de experiencia en consultoría de comunicación, asesorando a clientes nacionales y multinacionales de diversos sectores, también del Ibex35 (Telefónica, BBVA, etc.).

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TTR – ¿Cómo describiría la actividad del mercado transaccional español en el inicio de 2020? ¿Percibe diferencias con 2019?

P. Z. – Lo que creemos desde Kreab es que el mid-market continuará registrando un buen comportamiento en España en los próximos años animado tanto por el atractivo de las empresas, que tienen como tarea pendiente ganar tamaño para acercarse a la media europea, y también porque hay mucha liquidez en el mercado y facilidades de financiación, tanto para los fondos de private equity como para los compradores industriales.

Por otro lado, los megadeals siempre son una incógnita, ya que dependen de varios factores para poder cerrarse. En cualquier caso, es conocido públicamente que existen grandes fondos internacionales con la vista puesta en España que están buscando activos de gran tamaño para invertir su capital.

TTR – Dentro del mercado transaccional español, ¿cuál es el público objetivo de una consultoría de comunicación? ¿Qué tipo de operaciones corporativas suelen requerir la presencia de un asesor de comunicación?

P. Z. – El público objetivo de Kreab como consultora de comunicación y asuntos públicos son tanto compañías que quieran realizar cualquier tipo de operación financiera como los propios fondos de capital privado. Asimismo y cada vez más, muchas firmas de abogados y de banca de inversión confían en nosotros para poder ofrecer un servicio integrado de asesoramiento a sus clientes. Esto se debe a que la comunicación se ha convertido en un factor estratégico a la hora de cerrar operaciones, tanto desde un punto de vista de comunicación externa, con accionistas, inversores, periodistas y el mercado en general, como de comunicación interna.

Por lo general, mientras más compleja es una operación y a medida que existe un mayor número de actores involucrados, más importante es utilizar la comunicación como una herramienta para que todos los stakeholders conozcan, entiendan y valoren el sentido de la operación. Sin duda la comunicación es clave en la mejora de la reputación y la percepción de una empresa, ayudando a lanzar al mercado la señal de que el activo está en venta o que el sector está en auge, atrayendo de esta manera a un mayor número de compradores y generando un entorno que debería repercutir positivamente en el precio final pagado por la compañía. Hoy la comunicación aporta valor a las operaciones financieras.

TTR – ¿Qué elementos del asesoramiento en materia de comunicación valoran más vuestros clientes del mundo M&A? ¿Por qué?

P. Z. – Uno de los aspectos que más valoran los clientes de Kreab de M&A es nuestra visión 360º de cómo se estructuran las operaciones financieras. Por un lado, integramos la comunicación de una manera global y adaptada a todos los stakeholders, tocando no solo la comunicación externa sino también la interna (el público interno cada vez más es un factor clave en el éxito de las transacciones), así como la gestión de las cuestiones más institucionales y regulatorias. Además, nos coordinamos junto a asesores legales y financieros como una pieza más del equipo que contribuye al éxito de la transacción.

Otro aspecto que también destacan nuestros clientes es nuestra experiencia y conocimiento, no solo de temas de comunicación sino también de aspectos financieros, lo que nos permite ofrecer un asesoramiento global y especializado único, difícil de encontrar en otras consultoras de comunicación del mercado.

Por último, destacaría que gozamos de una amplia red de contactos basada en la confianza y la profesionalidad con los periodistas clave que cubren el sector, tanto a nivel nacional como internacional.

TTR – ¿Diría usted que existe una demanda creciente de consultorías de comunicación en operaciones de M&A? ¿Por qué?

P. Z. – En Kreab cada año asesoramos un mayor número de operaciones de M&A, lo que nos posiciona como la consultora de comunicación que más transacciones asesora en España durante los últimos años. Esto se debe a que tenemos clientes en nuestra casa que confían en nosotros desde hace más de 15 años y ellos, a su vez, al ver los resultados positivos de nuestro trabajo nos recomiendan en el mercado, lo que nos ha permitido construir una cartera fija de más de 60 clientes de comunicación financiera, así como otros clientes que nos contratan para proyectos puntuales.

Nuestra visión es que la demanda por servicios de comunicación especializados seguirá creciendo de forma sostenida en un mundo que se encuentra cada vez más interconectado y necesitado de transmitir transparencia y solidez de una manera coordinada entre los diferentes actores e incluso regiones que intervienen. En este sentido, también es importante destacar que Kreab cuenta con una red de 25 oficinas en todo el mundo, con una fuerte presencia en Latinoamérica (Colombia, Chile, Ecuador, Perú, Bolivia, entre otros) y con equipos especializados que ofrecen este servicio de manera global.

4Q19 Energy Sector Spotlight – Latin America

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LatAm Energy M&A Up Overall in 2019 Real Estate sector leads Spanish transactional market, although 17.07% falls until December 

  • Deal volume down in Argentina and Mexico YoY
  • Oil and gas transactions dominate regionally, despite 65% decline in Mexico
  • Solar transactions outpace oil and gas deals in Chile, notwithstanding overall decrease in renewable deals
  • Power sector transactions increase throughout the region, except in Brazil

Madrid, 31 January, 2020. Deal volume in the energy sector across Latin America is down 5% to the close of 4Q19, while aggregate transaction value increased 153% over the same 12 months last year according to Transactional Track Record data.

Volume and aggregate value of energy sector in LatAm. December 2018 to December 2019. Source: Transactional Track Record

Brazil leads by the sheer number of energy deals across the region with 129 transactions, followed by Chile, which registered the sharpest upswing in aggregate value with a 190% increase to USD 2.9bn.

Colombia ranks third by number of energy deals with 27 for the year, followed by Argentina with 25 and Peru with 15.

Mexico is in last place among the top six M&A markets in the region, registering a 65% decline in energy sector transactions with just 13 deals to the close of 4Q19.

Oil and gas transactions lead energy sector deal volume in the top six M&A markets, with the exception of Chile and Peru, where the number of transactions in the power sector outpaced extractives.  In the case of Colombia, the oil and gas and power sectors were at par with seven deals apiece for the year.

Conventional energy deals outpaced renewables in every market except Chile, where there were more solar transactions than oil and gas deals, despite a 33% drop in the number of solar energy transactions over 2018.  Investment in wind assets fell across the board, except in Colombia, where wind deals increased markedly over 2018.

Buyers based in the EU led inbound dealmaking in the energy sector for the year, with 53 transactions, followed by North American bidders, with 33 deals, ahead of buyers out of Asia, with 15 deals. The US led inbound energy investments in Brazil, Colombia and Mexico, the UK led inbound energy deals in Argentina, Colombia led energy investments in Peru and France dominated in Chile.

Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados tops the regional ranking with 14 transactions, while Machado, Meyer Sendacz e Opice Advogados leads by aggregate value on deals totaling just under USD 9bn.

Banco BTG Pactual led energy sector dealmaking regionally in 2019 with 11 transactions worth a combined USD 1.24bn. Banco Santander leads by aggregate value, its three deals worth USD 8.83bn in aggregate.

More information:

Oliver Hill
TTR – Transactional Track Record
http://www.ttrecord.com/es/sobre-nosotros/
oliver.hill@TTRecord.com 

TTR is a premium financial technology platform that delivers unrivalled transactional data and actionable market intelligence in real time, empowering professionals to seize opportunities and make more informed strategic decisions. TTR aggregates transactional data from thousands of sources, providing an indispensable resource of announced, completed and cancelled transactions covering every industry.

DealMaker Q&A

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TTR DealMaker Q&A with PPU Peru Partner Rafael Boisset

Rafael Boisset, Partner in Philippi Prietocarrizosa Ferrero DU & Uría Perú, is an expert in corporate matters as well as mergers and acquisitions of private and listed companies in various industries of economy, representing both sellers and buyers. He has advised significant clients by his active participation in the strategic planning of acquisitions and corporate restructuring, project finance, and banking and corporate financing through capital markets. He has experience representing investment banks as well as companies that raise funds from international capital markets.

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TTR – Firstly, Mr. Boisset, we would like you to share your opinion on the progress of the Peruvian market in 2019. 

R. B. – Both the number and value of deals reported proved to be a quiet active year in terms of M&A transactions, which turns to be interesting considering the slowdown of the Peruvian economy and the political crisis we faced during the year and particularly in the last quarter. Once again the energy sector has been the most relevant in terms of size and complexity but we also saw relevant deals in the manufacturing industry, such as the Intradevco Industrial sell to Alicorp.

TTR – As an advisor in M&A deals, what could you tell us about the investors that show interest in Peru-based companies? What are the main attractions of those companies? 

R. B. – I would say macroeconomic stability, low inflation, stable exchange rates, independency of the Central Bank, simplicity of its tax regime, and a deep potential growth of the middle class, which is an opportunity in several industries.

Despite the slowdown of the economy, Peru has proved to be a country, in which its macroeconomic fundamentals showed to be isolated from the political instability 

TTR – In 2019, there was an interesting increase in agribusiness deals in the country. What can you tell us about that upsurge? 

R. B. – Unlike other countries in the region, Peru’s large coast has some strategic keys for the agribusiness, such as predictable weather, access to ports for exportation, water supply and reasonable land prices and workforce costs. We have seen a consolidation of land and production of local investors in the last 10 to 15 years, that are now being acquired by bigger players that need such scale to invest. 

TTR – What other sectors could potentially have a noteworthy increase in their activity in the mid-term? Why? 

R. B. – It will of course depend on how the economy will move in the mid-term, but we expect that sectors related to the increase of the middle class be more active, such as education, retail, healthcare, and real estate. 

Two other sectors that may be relevant are mining and infrastructure. In mining, the slowdown of commodity prices creates the need for some companies to divest and the opportunity to others to invest. In infrastructure, we expect the criminal trials to end in the midterm allowing new investors to acquire assets that the current conditions do not offer the transparency and security that are needed. 

TTR – Lastly, what is your forecast for the next year?

R. B. – We believe it will be a very active year, probably even more active than 2019. Key sectors will be education, healthcare and manufacturing.

DealMaker Q&A

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TTR DealMaker Q&A with Allen & Overy Partner Ignacio Hornedo

Ignacio Hornedo is a partner within the corporate department at A&O Spain. His practice encompasses all aspects of corporate transactions including M&A, disposals, private equity, joint ventures, corporate reorganizations and commercial contracts. He regularly advises both listed and unlisted companies and acts for corporate purchasers, private equity bidders and financial advisors.

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TTR – How would you describe the M&A activity in Spain in 2019?

I. H. – It has been another strong year in terms of activity. While mega-deal volumes were slightly lower than the year before, we have experienced lots of activity in our key sectors such as private equity, energy, infrastructure and telecoms. PE houses continue to be fully-loaded and to seek investment opportunities, aiming at pre-empting processes to avoid the difficulties and uncertainties of an auction. Our starring PE practice has had another great year advising key players as EQT and ICG, supplemented by a very significant reach in the energy space: the renewables sector has shown real market heat with a lot of development projects now forming a sophisticated project-M&A market, where players are able to price the different stages of a project yet to be built. Foreign investors including German, French and Chinese energy players, as well as infrastructure funds, are looking for assets at development phases and they bring risk appetite and value-creation proposals to differentiate themselves.

TTR – How would you describe the relationship of the Spanish M&A market with its neighbouring countries?

I. H. – We compare more than well to our neighbour countries. Out of the Southern Europe jurisdictions, we are probably the most comparable one with the UK M&A style. We can confidently say that we are more flexible and simultaneoulsy more rigourous than our immediate neighbouring countries. In terms of trends, we do see now more interest in Portugal and we provide Iberian coverage to our international clients looking at particular assets there, specially in the energy and infrastructure sectors. 

TTR – What do you think about the performance of Private Equity and Venture Capital segments in 2019 in Spain?

I. H. – Private Equity houses are all over the place and the vast liquidity pushes a fierce competition also with more sector strategic investors. Transactions as the sale of BT España evidence that -for a while now- PE houses compete in equal terms with industrial players.  

TTR – Real Estate is again the most targeted sector in the year, why do you think is that?

I. H. – Assets have still benefitted from the post-crisis price adjustment and the usual suspects on REOs acquisitions are more and more sophisticated in their valuation mechanisms. We are now starting to see these key players turning their strategy in Spain to rotating their portfolios, with their investment teams turning sight to other jurisdictions. Certainly the next big thing in real estate is all the Madrid Nuevo Norte project, where the leading characters are positioning themselves towards investors’ interest in the short to mid term. 

TTR – What can we expect to happen in the Spanish M&A market in 2020?

I. H. – We expect 2020 to continue with strong levels of activity. While political uncertainties continue to be a top concern for any Investment Committee and the new government is yet to be assessed, the vast liquidity keeps pushing the market forward. Renewable assets continue to attract foreign investment interest. Large corporates who are key players in other energy sources are now deploying large amounts of capitals to build green energy platforms. This trend will continue to incentivise assets’ development activity, market consolidation for operating plants and more and more transactions. It is yet to be seen how the market absorbs the enormous interest of all kind of investors, some of which may face difficulties if projects in their initial phases do not reach the relevant milestones at the expected pace.

DealMaker Q&A

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TTR DealMaker Q&A com Maria Elisa Gualandi Verri, sócia do TozziniFreire Advogados

Membro do Comitê Executivo de TozziniFreire, corresponsável pela prática Societária e de Fusões e Aquisições do escritório e pela área de Investimento Social Corporativo, Maria Elisa cultivou sempre uma visão multidisciplinar do direito, destacando-se na área contratual – conhecimento que vem utilizando em aquisições e vendas de empresas. Também possui ampla experiência na coordenação de assessoria a empresas em geral, notadamente em assuntos contratuais e societários.

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TTR: Como você caracterizaria a atividade de M&A no mercado brasileiro até agora este ano?

A atividade de M&A veio em um crescente ao longo do ano, aproximando-se das expectativas que existiam com a chegada do novo governo. Além disso, incertezas econômicas e políticas vêm sendo superadas com um progressivo aquecimento. Conforme os números apresentados nos relatórios da TTR em 2019, o valor total de transações já é superior em relação ao ano passado e há boa expectativa para os próximos meses.

Elementos essenciais para o fortalecimento da confiança no país são as Reformas da Previdência e Tributária, que contribuirão de maneira significativa para aumentar a movimentação no mercado brasileiro. 

Outro fator que impulsionará a atividade de M&A nos próximos anos é a agenda de privatizações, concessões e parcerias público-privadas (PPPs), cenário no qual é possível acompanhar um crescimento já em 2019. 

TTR: Como o clima político atual está impactando a tomada de decisões em fusões e aquisições?

O primeiro ano de governo é um momento de transição e há muitos desafios políticos e econômicos, mas o país não perdeu seu papel relevante no panorama global e continua sendo um dos mercados emergentes mais promissores para os investidores estrangeiros. 

Vale destacar duas décadas de estabilidade política, com uma democracia estabelecida, com instituições sólidas e controle da inflação. Além disso, o atual governo está implementando reformas sobre as quais havia expectativa e que se fazem prementes para manutenção da estabilidade econômica. 

Existe também uma expectativa em relação ao crescimento no ambiente econômico que favorece um cenário de interesse para investidores estrangeiros, o que nos leva a apostar no aquecimento da atividade de M&A no Brasil. 

TTR: Qual o impacto da Lei de Liberdade Econômica na atividade de M&A no país?

A Lei da Liberdade Econômica busca desburocratizar a atividade empresarial e estimular o empreendedorismo e a inovação, o que naturalmente traz reflexos positivos para a atividade de M&A.

Regras mais claras sobre responsabilidade do sócio/acionista e da pessoa jurídica, a possibilidade de sociedades unipessoais, regras envolvendo desburocratização de documentos e procedimentos, estão na esteira de um movimento que aproxima o ambiente de negócios no Brasil ainda mais aos padrões internacionais.

TTR: Como a tendência crescente da responsabilidade social corporativa afeta as decisões de investimento?

Cada vez mais as empresas têm levado em consideração questões de responsabilidade social e compliance em suas decisões estratégicas. O crescente escrutínio da sociedade e do mercado tem colocado as empresas sob o holofote, tornando sua cadeia de valor ainda mais suscetível a riscos de imagem e financeiros, entre outros. 

Ao avaliar um investimento, já não é suficiente considerar apenas fatores de natureza econômica. Práticas de responsabilidade social corporativa, de posicionamento da empresa na sociedade e seu nível de compliance são hoje elementos valiosos na tomada de decisão. 

A conscientização nesse sentido é parte de um ciclo virtuoso que movimenta empresas que buscam investimento e desinvestimento, com engajamento em iniciativas que trazem mudanças concretas nas boas práticas empresariais e na sociedade. 

TTR: Como as necessidades de consultoria de investimentos socialmente diferentes diferem das necessárias para qualquer outra transação?

O investimento social de impacto veio para ficar e requer habilidades negociais, transacionais e legais similares àquelas aplicáveis a qualquer outro investimento. De qualquer modo, há de se ter o olhar apurado para o resultado final; ou seja, para o impacto que se visa gerar na sociedade.