Category: Czech Republic

PRK Partners has advised Veolia Energie CR (formerly Dalkia Ceska Republika, part of the Veolia Environment group) on its acquisition of Prazska Teplarenska LPZ a.s., a Prazska Teplarenska subsidiary operating, in particular, local heat supply networks on the left bank of the Vltava River in Prague. The sale price was reported to be EUR 71.3 million.

According to PRK Partners, “we have been supporting the client from the very beginning of the transaction; this included analyzing possible transaction structures, repeated due diligence, drafting and negotiating transaction documentation, and providing competition law advice.”

The Czech Office for the Protection of Competition announced the approval of the transaction on June 1, 2016. 

Dvorak Hager & Partners has advised the owners of BORCAD cz, a leading European producer of railway and medical technologies, on the sale of a majority stake in its medical division, BORCAD Medical, to the Linet Group. KPMG advised the buyers on the deal.

BORCAD Medical is a producer of high-end birthing beds, gynaecological chairs, dialysis, and transport chairs.

The Dvorak Hager & Partners transaction team was composed of Stanislav Servus, Lukas Zahradka, Jiri Smatlak, Dominika Vesela, and Vojtech Faltus, among others.

Schoenherr Prague has advised Aiga Eastern Europe Investments S.a r.l. (“AIGA”) on the sale of Wratislaw Palace, a historical heritage property in Prague, to TTP invest, uzavreny investicni fond, a.s. (“TTP invest”). The financial terms of the transaction were not disclosed. Liska & Sobolova advised the buyers on the deal.

AIGA is a real estate investment entity that develops and manages office and residential projects in the Czech Republic, Poland, and Romania. The company is also active in Spain and Peru where it provides real estate advisory and corporate finance services. TTP invest is a Czech closed-end investment fund focusing on real estate investments in Prague, Central Bohemia, and North Bohemia.

According to Schoenherr, “dating back to the 17th century, the Baroque Wratislaw Palace is an architectural highlight in central Prague, carrying the name of a Bohemian noble family. After undergoing extensive reconstruction and renovation, the palace is now an office building also housing several embassies.”

“Prague is well known for its historical buildings, and businesses are also drawn to heritage properties,” commented Vladimir Cizek, Local Partner in Schoenherr’s Czech corporate m&a practice, who led the firm’s team on the deal. “Wratislaw Palace is a part of Prague’s rich history and a cherished location for businesses and diplomatic missions alike.”

In addition to Cizek, the Schoenherr team consisted of Attorney Natalie Rosova and Associate Rudolf Bicek.

Liska & Sobolova did not reply to our inquiries on the deal. 

Weinhold Legal has advised the Bohemia Sekt wine producer in connection with the sale of its liquor business to Stock Plzen.

Weinhold Legal describes Bohemia Sekt as “one of the leading producers of sparkling and still wines in Central and Eastern Europe,” and Stock Plzen as “the market leader in the Czech Republic producing the finest traditional spirits and bitters.” The firm’s legal services “included, among others, advice on the transactional structure and negotiating contractual documentation governed by Czech law.”

The Weinhold Legal team was led by Partner Ondrej Havranek, who commented that “we are pleased to assist in such a prestigious transaction where both parties are market leaders with high reputations.” Havranek was supported by Weinhold Legal Attorneys-at-Law Dalibor Simecek and Vaclav Smetana, among others.

Weinhold Legal explained that it was unable to disclose the name of the law firm that represented Stock Plzen, “as the information has not been made public yet.”

Kocian Solc Balastik has advised Emerging Europe Properties Fund on the share-sale of WOTEG GWG-Group, owner of the Centro-Ostrava shopping park, to FOCUS Estate Fund — a newly incorporated fund based in Cyprus. The Rutland Jezek Law Office advised the buyers on the deal. The purchase price was not disclosed.

The Centro-Ostrava shopping center is located approximately 6 from Ostrava, the capital of the Moravia-Silesia region of the Czech Republic. It was built in 2011 and features approximately 7,700 square meters of retail space. Some of the current stores available to shoppers include Rossmann perfume shop, the Okay electrical appliance store, the Mountfield garden equipment supplier, and the JYSK furniture and home appliances store.

KSB was in charge of carrying out due diligence, structuring the transaction and drafting, negotiating, entering into, and implementing the contractual documentation.

Kinstellar, working with Milbank, has successfully advised Credit Suisse International, Jefferies, UBS, Bank of America and Societe Generale as joint lead arrangers and joint book-runners for the senior secured credit facilities in connection with Avast Software’s USD 1.4 billion acquisition of AVG Technologies. White & Case advised Avast on the debt financing and the underlying acquisition. Orrick advised AVG Technologies on the acquisition, which was structured as an all-cash tender offer for the outstanding ordinary shares of AVG, with the initial offer period closing on September 30.

Avast Software is a maker of highly-trusted security software, and AVG Technologies N.V. is a developer of business, mobile, and PC device security software applications. According to Kinstellar, “both companies are industry pioneers: founded in the Czech Republic in the late 1980s and early 1990s, they expanded internationally in the 2000s and will now combine complementary strengths to position Avast for continued growth in the security industry. Following the acquisition, Avast is now the largest provider of security software in the world outside China, with a combined customer base of 400 million users.”

According to the deal that was announced in June, Avast acquires all outstanding ordinary shares in AVG at USD 25 per share. The acquisition will allow Avast, which is headquartered in Prague and has offices in the USA, Germany, China, South Korea, and Taiwan, to better serve growing industry segments with innovative technology and realize additional value through current AVG product offerings. The combined company will have an expanded geographic platform and an increased ability to reach emerging growth channels through a more efficient organization.

The proceeds of the facilities, which included a USD 1.2 billion US dollar denominated term loan tranche, a ‎EUR 400 million Euro denominated term loan tranche, and a USD 85 million multi-currency revolving credit facility, were used to purchase shares tendered by stockholders of AVG Technologies and to refinance Avast Software’s and AVG Technologies’ existing credit facilities. 

Kinstellar advised the financing banks on all Czech law aspects of the financing. The firm’s team was led by Counsel Martina Brezinova and included Managing Associate Leo Javorek and Associate Dalibor Cerny.

The Milbank team was led by Partner Marc Hanrahan and included Associates Spencer Pepper, Gabrielle Paolini, and Emily Rutcofsky. Also providing advice were Partners Suhrud Mehta and Douglas Landy and Associates Alexandra Schofield, James Kong, and Javier Ramos.

The White & Case team advising on the transaction was led by Partner Ian Bagshaw and included London-based Partners Caroline Sherrell, Justin Wagstaff, and Lindsey Canning, Brussels-based Partner Mark Powell, New York-based Partner Chang-Do Gong, and Washington-based Partners Farhad Jalinous and Rebecca Farrington, with support from Local Partner Katarzyna Czapracka, Counsel Karalyn Mildorf, and Associates Nofa Khadduri, Barry O’Driscoll, Jarlath McGurran, Ash von Schwan, Suni Sreepada, Graham Silnicki, and Tamer Mahmoud.

The Orrick team advising AVG was led by Corporate Partner Peter Lamb and included Partners Richard Vernon Smith, Ed Batts, Jason Flaherty, Alex Okuliar, Douglas Lahnborg, Harry Clark, Zach Finley, and Eric Wall, and Of Counsels Charles Walker, Lynne Hirata, and Pat Zeigler.

Kocian Solc Balastik has obtained a successful result for the Preol biofuel company in invalid immediate employment termination case before the Czech Supreme Court. 

Preol was sued by a employee claiming that the immediate termination of his employment by the company — which KSB reports, followed “an especially gross breach of his obligations after the employee attempted to take company assets without permission” — was invalid. In his defense, the employee claimed that, although he did not have permission, he believed the assets were of no value to the employer since they were production waste, which – in certain circumstances – the company allows employees to have for their own needs.

Although the first-instance court dismissed the lawsuit, the employee appealed the decision and the Regional Court in Usti nad Labem (acting as the appellate court) decided in favor of the employee. At that point, Preol asked KSB to take over and represent it in the special remedy proceedings.

The case ended up before the Czech Supreme Court, which decided the case in favour of KSB’s client. The Court held that mutual trust and an employee’s reliability and honesty are of essential importance in an employer-employee relationship, which is why it considers a deliberate attack against the employer’s assets to be an especially gross breach of the employee’s obligations. The fact that the employer allows employees to take production waste subject to certain requirements (which the employee failed to meet), does not change anything in that respect.

The KSB team was led by Partner Pavel Dejl.

Slaughter and May has advised GE Capital International Holdings Limited (GECIHL) on its sale of approximately 24.5% of the share capital of Moneta Money Bank, a.s., which raised gross proceeds of approximately CZK 9.4 billion. Weil, Gotshal & Manges advised GECIHL on Czech matters, and Linklaters advised joint global bookrunners Citi, Goldman, and JP Morgan.

The sale, which was announced on September 29, 2016, was conducted by an accelerated book-building process. Following the sale, GECIHL held approximately 18.0% of the share capital of Moneta.

The Slaughter & May team consisted of Partner Andy Ryde and Associate Nick Johnston.

The Weil Gotshal team consisted of Partners Karel Drevinek, Karel Muzikar, and Roman Janecek, and Associates Pavel Prochazka, Pavel Grim, and Jiri Besser.

The Frankfurt-based Linklaters team was led by Partner Marco Carbonare, supported by Associate Charles Eypper. 

Image Source: moneta.cz

CMS has advised Komercni Banka, a subsidiary of the Societe Generale Group, on the agreement it recently completed with Worldline — a European payment and transactional services provider — to develop product and services for Czech and Slovakian merchants. Baker & McKenzie advised Worldline on the deal.

According to Baker & McKenzie, “the EUR 27 million transaction was announced on 30 September and will allow both companies to cooperate in the joint development, marketing and sale of state-of-the-art merchant acquiring and payment processing services and ancillary products to retailers, enabling the implementation of modern technologies and the spread of cashless payments in all types of outlets and among entrepreneurs across the Czech Republic and Slovakia, as well as expanding the acceptance of cards on the Internet.

Under the terms of the agreement, Worldline acquired, as a first stage, 80% of Cataps s.r.o., a 100% subsidiary of the Komercni Banka banking group, based on an enterprise value of EUR 34 million. Cataps was established in 2014 and has assumed activities of Komercni Banka in credit and debit card payment processing services (merchant acquiring). Worldline and Komercni Banka have also signed a 10 year commercial alliance for the development and the growth of these activities in the Czech Republic. 

In a Worldline press release, the company reports that it employs more than 7,300 people worldwide and generated 1.22 billion euros revenues in 2015. In that same press release, Marc-Henri Desportes, General Manager at Worldline, said: “Komercni Banka and Worldline have both been providing payment services and innovative solutions to the European market over several decades. At Worldline, we are now delighted to welcome this new alliance with Komercni Banka, a renowned market leader in the Czech Republic, which will bring the best assets of the two partners to the retailer community, adding our rich payment and digital retail product portfolio and scalable processing systems to the wide distribution network of Komercni Banka, in order to satisfy the fast growing demand of Czech merchants for electronic payments equipment and associated services.”

And Albert Le Dirac’h, Chief Executive Director of Komercni Banka, added: “The requirements of clients for services of merchant acquiring and for integration of the related information with their own business and financial data management systems have been rapidly advancing. In alliance with Worldline, the European leader in electronic payments, we will together be able to offer merchants the most advanced and innovative services and products in this area. The cooperation with Worldline brought already in August the first fruit to KB’s clients, MojeMobilni karta (MyMobile card) – a modern method of contactless payments via mobile phone using the Host Card Emulation technology.”

The CMS Prague team consisted of Partners Pavla Kreckova and Patrik Przyhoda and Associates Magda Nemcova and Barbora Dubanska.

The Baker & McKenzie team advising Worldline was led by Prague-based Partner Libor Basl, supported by Prague-based Associate David Reiterman.

Kocian Solc Balastik is reporting that, at the International Bar Association conference in Washington, firm Founding Partner Martin Solc has been elected President of the IBA — making him the first Central European ever elected to the global organization’s highest post. His new role will take effect on January 1, 2017. 

The IBA brings together 201 national bar associations, including the Czech Bar Association, and, directly or through membership of law firms, more than 100,000 individual members. Solc, who has been IBA Vice President since 2015 (as reported by CEE Legal Matters on February 25, 2015), will take over from the current president, US lawyer David Rivkin. Solc’s election was decided and announced by the IBA Council on Thursday, September 22, 2016, following a vote of bar associations and individual members.

Based in London, the IBA is the largest global organization of lawyers. It was founded in 1947 by a group of 37 national bar associations shortly after the founding of the United Nations and intended by its founders to be — according to KSB — “in a kind of analogy, a UN for the legal profession.” The IBA annually organizes more than 60 conferences, with the annual conference regularly attended by more than 5,000 lawyers. This year’s conference in Washington was opened by a speech of the president of the International Monetary Fund, Christine Lagarde, and speakers included former Chairman of the Federal Reserve Ben Bernanke, former FBI Director Robert Mueller, and former Secretary of State Colin Powell.

“I very much appreciate the confidence in me that the IBA Council has expressed by its choice,” said Solc of his election. “I consider my election as president of the organization to be a recognition of my more than twenty five years of work for the IBA as well as confirmation that Czech and Central European advocacy is seen as an active part of the global profession.”

According to an announcement released by KSB, Solc intends, in his position as President, and in addition to promoting the idea of the rule of law, “to implement certain changes in the functioning of the organization, for example, increasing the availability of conferences and seminars to a broader audience through online access.” The IBA, according to Solc, should also “form a working group to focus on security issues and data managed by lawyers with the aim of establishing global standards in this regard.”

“I heartily congratulate Martin on behalf of myself and also on behalf of the Czech Bar Association, in respect of this historic success,” commented Martin Vychopen, Chairman of the Board of Directors of the Czech Bar Association. “No representative of Czech advocacy has ever held such a high post in our field. Martin, within his current position in the IBA, has not forgotten where he came from, and I think that thanks to him, Czech lawyers internationally also have a very good reputation. I believe that he will succeed in his post, leaving behind an indelible positive footprint.”