Marco Pagni: Alliance Boots
3 September 2007
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9 April 2007
Alliance Boots is looking to finalise a formal panel and group legal counsel Marco Pagni has laid down strict selection criteria. By Caroline Binham
Wanted: successful and high-profile biz WLTM lawyers for discreet r’ship with a view to long-term commitment and perhaps more. Serious applicants only please.
Alliance Boots group legal counsel Marco Pagni is looking for a lasting partnership. After 2006’s marriage between his legacy company Alliance Unichem and high street pharmacy giant Boots, Pagni has been looking to consolidate a panel of around five law firms for some time.
Those plans, however, were understandably shelved when, in March 2007, just eight months after completing its union, Alliance Boots became the subject of an £11.1bn management buyout (MBO) backed by US private equity house Kohlberg Kravis Roberts (KKR), subsequently making it the first FTSE100 company to be taken private.
Slaughter and May helped Alliance Boots through the MBO, with Frances Murphy as lead partner. There was little surprise when Slaughters got the nod from Pagni: pre-merger it had been the go-to counsel of both Boots and Alliance-Unichem and Murphy had cultivated a longstanding relationship with former Boots chairman Sir Nigel Rudd, who is also chairman at Pilkington, another historic Slaughters client.
“It was obvious with whom the board would feel more comfortable,” says Pagni of his decision to instruct Slaughters. Allen & Overy (A&O) would have been the long shot, with a Slaughters conflict gifting the magic circle firm the lead role advising Alliance-Unichem on the merger. A&O remains Pagni’s antitrust firm of choice, however.
With the MBO led by the now chairman Stefano Pessina complete, Pagni has more time to concentrate on his legal function, which is currently 15 lawyers strong in the UK, with the team set to grow by at least two lawyers. He is searching for a dedicated head of M&A to oversee the expansion that the newly privatised company is plotting.
But Pagni’s main priority for the coming months will be instigating a formal panel of legal advisers from the dozens of firms that have flooded his inbox since he first revealed his panel plans in the pages of The Lawyer (23 July).
“It’s trite to say I’m looking for a partnership, but I want to get to the stage where we’re not sold services, but solutions to problems,” he explains. “Firms have to participate in the risk sharing as well as the benefit sharing. You can’t be charged like a taxi metre.
“I want firms that will take the time to invest in the company and understand how it’s growing and how they can give tailored business advice.”
Although Slaughters and A&O are not shoo-ins for the panel, Pagni admits that the firms have more than proved themselves over the past two years. “But I don’t want just magic circle firms on the panel,” he adds. “I need different firms with different cost structures.”
As a substantial amount of the privatised company’s investments will be overseas, Pagni will be looking for firms with established overseas networks. “It’s not efficient for us to be reinventing the wheel in each country we go to,” he explains.
The affable Northern Irishman took an unusual route in-house. Pagni qualified originally as a barrister and practised for a time at 3 Paper Buildings as an insolvency expert. Then technology company Texas Instruments came knocking and he had to weigh up the allure of a lifetime of insolvency law against a responsibility-laden position based in Nice as European counsel: polyglot Pagni (who chats to Pessina in Italian) did not take too much time to decide and has not looked back since.
“It’s a less obvious move for a barrister,” he admits. “As an in-house counsel you have the whole commercial stage on which to operate. I like having the ability to combine the discipline and rigour of legal reasoning with applying it to business, administrative and organisational issues.”
There have certainly been plenty of those in the last two years. From a lawyering perspective, Pagni found the merger more difficult than the MBO, particularly on competition issues. Ultimately, the Office of Fair Trading did not refer the merger to the Competition Commission due to Boots having divested 96 stores.
“I think the UK competition authorities showed commendable pragmatism in the decision reached. They balanced the commercial interests of the companies with the public interest,” says Pagni, before adding: “I know you think I would say that, but that’s what I honestly believe.”
With Alliance Boots in a bullish mood over its future, prospective panel firms will need to be confident of giving equally robust advice. Any suitor hoping to woo Alliance Boots will have to prove commitment and flair. Up for it?
Group legal counsel and chief administrative officer
|Title:||Group legal counsel and chief administrative officer|
|Assets under management:||£14.6bn|
|Reporting to:||Executive chairman|
|Number of employees:||81,943|
|Main law firms:||Allen & Overy, Baker & McKenzie, DLA Piper, Mundays, Shoosmiths, Slaughter and May|
|Kevin Crossett’s CV:||Education:|
Oxford University, Keble College, MA Law, BCL Law
1988: Pupillage, 3 Paper Buildings
1989-93: European counsel, Texas Instruments
1993-97: General counsel, Europe, McDonald’s
1997-98: General counsel, Asia-Pacific, Middle East and Africa, McDonald’s
1998-2001: Vice-president and international general counsel, McDonald’s
2001-2003: Vice-president, international development partner, brands, McDonald’s
2003-07: General counsel, Alliance Unichem/ Alliance Boots
2007-present: Group legal counsel, Alliance Boots