Ashurst associate Hayley Gow had just returned from a secondment at investment bank Rothschild & Co when she was selected as lead associate on long-standing client AVEVA’s US$5bn acquisition of OSIsoft.
The deal catapulted the tech firm into having a market capitalisation of around £10bn and becoming a FTSE 50 company. It was an undeniably transformative deal for AVEVA.
Gow joined Ashurst as a trainee in 2013 following a vacation scheme and qualified in March 2015. She was familiar with the client, having advised on its combination with Schneider Electric in 2017 as a junior associate. “Since then, I’ve also helped them with ad hoc corporate governance matters”, she says. “It was good to work with them again on another transformational transaction.”
Gow’s focus is on advising listed companies and their private company subsidiaries, which involves public and private M&A, as well as capital market transactions for issuers and corporate advisory work. “I like to be involved in a mix of things and the variety means I can be working on some large transactions with big teams, along with smaller, quicker deals at the same time. Both have bits that keep me interested”, she explains. She works closely with head of UK corporate and global chair Karen Davies, who led this deal, and partners Tom Mercer and James Fletcher, with whom she is currently advising Morrisons on its competing takeover approaches.
The AVEVA transaction, which included a circa US$2.8bn rights issue, required the co-ordination of a multi-jurisdictional team from Ashurst and a combination of high-end M&A and equity capital markets (ECM) expertise.
The fact that the deal coincided with the start of the pandemic and Gow’s return from secondment made it “quite the reintroduction back to Ashurst”, she recalls. “As an auction process we didn’t know how it would play out, but we had a very tight timetable initially and the deal needed to get done quite quickly. We advised on the rights issue as well as assisting with the M&A aspects, so it was a huge project and a great opportunity to get stuck back in.”
While getting used to using Zoom and Teams instead of working face-to-face was initially a learning curve, Gow believes the restrictions of the pandemic, ultimately made the team more efficient. “Remote working in many ways made us even more collaborative than we could sometimes be – it was much easier to have the entire team involved, jump on a call, and there were less siloed conversations than typically would take place if people were on different workstreams. Everyone also made a real effort to stay close and connected, we would have weekly catch ups to ensure everyone stayed in the loop – I am not sure this would happen so often in person, but it definitely seems to be something that has stuck around”, she says.
Led by Davies, alongside a multi-jurisdictional team spanning the US, Europe and Asia. Key roles were also undertaken by corporate partner Stuart Rubin, finance partner Tim Rennie, and incentives consultant Nicholas Stretch.
“Running this huge transaction across so many areas of the firm remotely was very unusual obviously. We were still getting used to using Zoom and Teams, so as we were pushing to get the deal over the line and establish our new patterns of working – learning how to maintain contact across the various workstreams of the transaction and understanding the best way to keep everyone on track and on the same page”, Gow explains. “The target was based in the US, so working remotely was definitely a benefit in terms of working with other jurisdictions. We also had a few team members trapped on visits overseas, so there were many timescales to juggle on the deal which added an extra complexity to transaction management.”
The acquisition was a class 1 transaction under the Listing Rules and a prospectus was required in relation to the rights issue. The team leveraged its public company markets experience to produce a combined circular and simplified prospectus. At the time of publication of the prospectus, there were only a limited number of simplified prospectuses used in the market. Complex OSIsoft financial information needed to be included in the document, and Ashurst advised AVEVA on the Listing Rule requirements as well as co-ordinating the three accounting firms involved in the production of financial information.
“This was the first simplified prospectus the firm had worked on, but it also needed to be combined with a circular for a general meeting and compliant with the US securities laws to allow certain sales into the US. We therefore spent some time working with Numis, the sponsor, and our US securities colleagues establishing what needed to be included in the document and building our framework”, Gow says. “At the time there were not that many other external examples we could draw upon. Once we were comfortable, we also had to explain the various regulatory rules to the target so they could understand why we needed so much information from them. It involved, amongst other intricacies, some very complicated IFRS conversions of the target’s accounts, which was interesting to explain to a private US business.”
Ashurst supported the sponsor with correspondence with the Financial Conduct Authority on potential related party implications given the complex funding structure with AVEVA’s largest shareholder Schneider Electric and co-ordinated a complicated settlement process involving multiple banks. Ashurst also sought overseas counsel advice to ensure the rights issue and rump placing could be offered in adherence to international securities laws.
Employee equity awards were critical to bringing OSIsoft onside. This involved careful structuring and planning. In particular, the deal involved a special share award for OSIsoft employees, worth US$60m, to be granted over the next four years and the issue of consideration shares worth approximately £0.5bn, based on the current AVEVA share price, to a company majority owned by OSIsoft’s founder, Dr J. Patrick Kennedy, who was appointed Chairman Emeritus of AVEVA on completion of the deal. The team worked closely with US counsel to advise on the US securities and tax issues which impacted the grant of awards under this transaction.
The successful co-ordination of a c.US$2.8bn rights issue was also key. It was essential that it was completed in an accelerated time frame for the deal to proceed as it was being run as a competitive auction process. This was the largest announced rights issue in the UK and one of the largest across Europe in 2020.
Gow says the deal wasn’t necessarily hugely different from other large transactions she’d worked on, but it stood out as pivotal for AVEVA. “It was another hugely strategic move for the company whilst the Schneider deal is still relatively fresh in everyone’s mind. It’s a real privilege to assist a company in those sorts of matters. For AVEVA, the deals have played an important role in reinforcing their position as a global leader in engineering and industrial software, accelerating the digital transformation of the industrial world and promoting sustainability.”
The acquisition enabled AVEVA to accelerate digital transformation in the industrial sector, promote sustainability, and stay ahead of the global big data and analytics market, which is projected to be worth US$274bn by 2022.
Moreover, Gow says the deal was “invaluable in enhancing my connection with the client”. It was also her first deal as a senior associate. “I took on more responsibility of managing the team, checking in with the junior associates to ensure workloads were being managed appropriately and – particularly in the context of this being our first fully remote deal – ensuring everyone’s wellbeing, as much as possible during a lockdown”, she says
Since Aveva closed, Gow has been advising Equitix in relation to its co-investment with KKR on the £2bn takeover of John Laing Group alongside Jason Radford – it has been a great deal to be involved in and had a mix of public M&A considerations alongside the co-investment and restructuring steps for the ongoing group.
The AVEVA deal has equipped her a mass of experience, but not least of all the unexpected learning provided by the pandemic. “Without seeing one another in the office, it is much harder to judge people’s workloads and if they are busy on other matters”, Gow says. “Taking the time to properly check in on people is key. Also, when things are busy, making sure people don’t feel isolated or too side-lined (especially when working on long transaction documents like a prospectus) – feeling part of a team is super important to maintain wellbeing.”
About Hayley Gow
2015-present: Associate and senior associate, Ashurst
2013-2015: Trainee solicitor, Ashurst
Who’s Who: the Ashurst corporate team
The Ashurst team was led by head of UK corporate and chair-elect Karen Davies. She was supported by a multi-jurisdictional team spanning the US, Europe and Asia. Key roles were undertaken by corporate partner Stuart Rubin, finance partner Tim Rennie, and incentives consultant Nicholas Stretch.