As a trainee in the corporate and M&A department, I assisted on Visa Inc.’s $18.375bn (£14.23bn) acquisition of Visa Europe, an association owned and operated by around 3,000 European financial institutions. Prior to the deal, Europe was the only continent in which Visa Inc (headquartered in the USA) did not control the global Visa business. The purpose of the deal was to consolidate Visa into a single global entity. Macfarlanes advised Visa Inc together with New York law firm Wachtell, Lipton, Rosen & Katz.
Acting on a deal for a purchaser, your most important job as a trainee is typically to assist in the due diligence exercise: that is, scrutinising every aspect of the target company from a legal perspective to ensure that your client knows precisely what it is buying and the associated legal risks. In a deal of this size, with so many different jurisdictions, this is an extremely challenging exercise, and interesting legal issues were uncovered and analysed in relation to many aspects of Visa Europe’s business.
As a consequence, the due diligence exercise involved not just the corporate team, but many other departments in the firm. By way of example, the employment team grappled with the fact that under French employment law, the deal required the prior consent of employee representatives (known as a works council) which had implications for the deal’s timetable. Meanwhile, the commercial team was tasked with analysing Visa Europe’s key contracts to determine whether the acquisition would impact existing legal and commercial relationships.
In the corporate and M&A department, you are responsible not just for conducting due diligence on the target company’s corporate structure (in this case, for instance, analysing the effect of the deal on the highly complex membership and operational structure of Visa Europe), but also for combining all of the other departments’ work to create a single due diligence report for the client. To do this effectively, you need to develop a working understanding of all the different specialist areas quickly, and although this is challenging, gaining direct exposure to what the rest of the firm does is tremendously useful.
Working on a deal as an M&A trainee is also uniquely dynamic and interactive. As the coordinator of the due diligence report, you are in constant communication not just with the more senior members of your team in M&A, but also with:
• The other side’s M&A team (with whom you have an on-going dialogue of questions and answers, and who provide you with access to the relevant documentation about the target company).
• Partners and associates in departments across the firm (both in compiling the due diligence report, and since you act as the bridge between them and the other side’s lawyers).
• Foreign counsel with whom you are working such as Wachtell (which, courtesy of the time difference between the US and the UK, necessitated more than a few late finishes!).
• The client, who of course must be updated regularly on your latest findings.
As a trainee, this level of autonomy is a great thrill (occasionally bordering on scary), but is invaluable for your development as a lawyer, and the support of your more senior team members is always there for you when you need it!
Due diligence is, of course, only one of the many aspects of the transaction that the firm advises on. For instance, how the deal is actually structured — particularly one as large and complex as the Visa deal — is crucial. Although this is commonly assumed to be the preserve of partners, even as a trainee I was asked to prepare first drafts of briefing notes that would be used to analyse the potential structures and associated legal issues.
I also regularly attended conference calls on various aspects of the deal, and visited Visa Europe’s offices to inspect their company books in person. The corporate and M&A trainee is also guaranteed to be involved in drafting a number of the (many!) documents which actually effect the deal, and in ensuring that the signing of the deal itself runs smoothly (no easy matter after limited amounts of sleep, and when the clients’ minds have already moved firmly on to the popping of champagne corks!).
Acting on big M&A deals such as the Visa deal is undoubtedly demanding, immersive and — yes — tiring! But on the flip side, there is a real buzz to playing an integral part in such an intensive and challenging project, and when the ink has dried on the final signature, you can put your feet up, look back and feel a real sense of pride and achievement.
Alex Evans is a newly qualified solicitor in Macfarlanes’ litigation team. He will be speaking at ‘Commercial Awareness Question Time: Inside the acquisition of Visa Europe — with Macfarlanes’ on Wednesday 21 June. Apply to attend here.