Odyssey’s client is a subsidiary of a large global infrastructure group

Originally a NSW business that has been establishing a national presence, the company was looking to grow its Victorian business through the merger of its existing Victorian based business with another similar, and to some extent, competing business. The client had identified the target business and had held preliminary discussions with its management, and then appointed Odyssey to progress and negotiate a satisfactory deal

Odyssey role

Odyssey acted as lead manager on the project, encompassing

• The development of a framework for the deal that ultimately led to a merger of our client’s Victorian business with the target – with the target’s shareholders retaining a 50% shareholding in the new combined entity
• A detailed Heads of Agreement (HoA)was prepared encompassing all aspects of the proposed deal, including consideration to be paid, key terms of shareholders agreement, remuneration arrangements for management, and a number of other key arrangements that underpinned the commercial rationale for the merger
• Odyssey’s role following HoA was to progress the deal through a two-way due diligence process, establishing a detailed mechanism for ensuring that both parties delivered equivalent net assets to the new merged entity, and the project management of the deal through the legal documentation stage

Odyssey value-add

Odyssey’s deal expertise enabled the client to identify early on the range of issues that needed to be dealt with on this merger – merger deals are typically more complicated than acquisitions. The client benefited from a third-party representative through the negotiations, which enabled often difficult discussions to be had without our client being involved, therefore reducing the risk of the future business partners “falling-out”

With management of the target entity being important to our clients’ Victorian strategy, negotiating a deal that was acceptable to target management, whilst providing a sufficient level of control for our client was a real challenge in the deal.  Some of the issues that arose took time to deal with and whilst more protracted than expected, the deal was completed in 8 months from Odyssey’s appointment and both parties have started the joint venture on a sound basis and satisfied that the terms were fair