Flurry of capital markets and M&A deals for Naschitz Brandes Amir
It’s been an extremely busy COVID summer for the Naschitz Brandes Amir (NBA) capital markets and M&A cross-border deal teams.
During August and September alone, NBA worked on capital markets and M&A deals for the three largest Israeli public companies – representing Check Point in its acquisition of Odo Security, Wix in its mega USD 575 million 144A convert offering and the global investment banks in NICE’s upsized UDS 460 million 144A convert offering, which we also referenced last week.
NBA has been prolific in the M&A field, acting in three M&A deals for the largest Israeli-based private equity firm – FIMI Private Equity – the USD 420 million sale of Rivulis Irrigation to Singapore-based Temasek and the acquisitions of controlling equity interests in each of Rimoni Industries and the Eliakim Ben Ari Group.
During the same August and September, NBA also represented the initial purchasers in Nova Measuring Instruments’ upsized USD 200 million 144A convert offering, unicorn-client Gong in its mega financing round, Atlanta-based Frontier in its acquisition of Odoro and Femi Medical in its acquisition by G Square, as well as settled Gilat Satellite’s aborted public merger with Comtech.
Indeed, busy times, and not surprising to once again find NBA ranked #2 in EMEA in the latest league table published by Mergermarket for the first three quarters of 2020 – and was recently shortlisted for M&A Law Firm of the Year.
We caught up with Tuvia Geffen, Head of NBA’s Capital Markets:
What factors have helped Naschitz get these across the finishing line?
To be honest, the main factor that contributed to our success was the fact that due to COVID none of our team members disappeared this summer for weeks of exotic vacations in resorts without WiFi, so for a change we were fully staffed and everyone was available to contribute throughout the summer…
But, seriously, I think it comes down to the incredible commitment of each member of our cross-border M&A practice team (led by Sharon Amir) and cross-border capital markets team, working diligently and professionally in these uncertain times and under complex circumstances.
Combining that amazing commitment level with the professionalism and expertise of our team members, the vast experience in cross-border deals and the full-service firm culture, are the main reasons we believe NBA has been so successful in attracting leading Israeli and global players, whether multinationals, public and private companies and financial institutions and global investment banks, to engage our firm for their key and milestone transactions.
Given the current climate, what have been the main challenges in getting these matters completed?
Like all leading players in these markets it took us a while to get accustomed to the idea that deals can get done without shaking hands in person, looking people in the eyes (without intermediate screens) or flying from city to city. But once the understanding that COVID was, unfortunately, here to stay for a while, clients got back in late April-May to the drawing boards, restarted pending deals and began pursuing new ones.
What we have learned in the last few months was that deals can definitely get done in the current climate, but there are new deal nuances that need to be adopted. A decade ago people learned how to do public offerings without everyone sitting physically at the printers, and now people are learning how to replace the physical conference rooms with the virtual conference rooms offered by Zoom, Teams, BlueJeans and others. It takes a while to get used to it, but it works.
Another challenge we faced was the fact that deal timelines have become shorter and shorter in the COVID era, which required a change in the mindset and adjustment of deal staffing to meet timeline expectations.
Unclear if it’s because people have more time when subtracting all the time that used to be “lost” on work related travel (both flights and regular commutes to the office), or an effort to address the risk of what COVID will bring next week, but there is no question that the time from org meeting to deal launch has become shorter than ever, and all deals – whether M&A or capital markets, public or private – are on expedited timelines. I do not remember any deal we worked on recently that was not executed on an expedited, urgent timeline.
What do you think the outlook look like for other offerings over the next 6 months or so and which sectors are you seeing as hot in Israel?
When thinking about the outlook, the first thing that comes to mind is President Trump. One of the main reasons for the hectic summer, particularly for capital markets, was the interest of issuers and underwriters to take advantage of market conditions and move forward quickly while the “window” remains open, and before the US elections’ uncertainty affects the global capital markets activity.
Taking advantage of that “window” enabled us to receive issuer and bank mandates to work on three consecutive Rule 144A 0% convertible note offerings in six weeks, raising more than USD 1.2 billion for three leading Israeli NASDAQ companies – Wix, NICE and Nova.
I believe that the uncertainty surrounding the upcoming U.S. elections may put a temporary pause on the level of capital markets activity. Another affecting factor in the upcoming months may be that many leading Israeli technology and life science companies have already taken advantage of the public equity and convert market to raise funds in recent months, and will likely not need to access those markets again in the near future.
As to M&A activity, we are continuing to experience a heavy pipeline of mid-size and small M&A deals (both cross-border and domestic) and we expect (hope) that continues at a similar pace. As to mega cross-border deals, we believe those are likely to continue at a slower pace, at least until the vaccine arrives or the world gets used to the “new normal” and buyers get comfortable to pursue billion dollar cross-border deals with zoom-only diligence.
