Associate Megan MacDonald joined Debevoise & Plimpton as a trainee in 2016 and qualified into the firm’s competition and antitrust team in 2018. Two years later she was lead associate on one of the largest deals ever struck by a UK technology company.
Debevoise acted for Aveva Group in obtaining merger control approval globally for its US$5bn acquisition of OSIsoft, executing it at a time of significant market uncertainty.
“This was one of the first deals with a significant number of filings where I took a lead associate role”, MacDonald explains. “I had previously led on smaller transactions or been the more junior associate on larger deals. So that, combined with the high profile, value and pressure of this deal, certainly made it stand out for me.”
Most of MacDonald’s practice involves coordinating and obtaining merger clearance for complex investigations before the European Commission, UK Competition and Markets Authority (CMA) and other competition authorities worldwide.
“The deals I work on are pretty varied, in that very few have been in the same industry or area which keeps each day interesting. I have particularly enjoyed the transactions I have been involved in in the fields of technology, as it’s constantly changing and often requires a high degree of client contact to understand exactly what the particular business does, and natural resources because I enjoy understanding the processes required to create the by- and end-products and find past decisional practice in these areas pretty easy to follow”, she says.
“I also have experience advising clients on behavioural matters, including investigations of alleged abuses of dominance and EU state aid matters. At the start of the pandemic, when M&A activity was pretty limited, I also worked on an arbitration with various competition angles, including abuse of dominance claims, which was fascinating and allowed me to refresh the arbitration knowledge I gained during my training contract.”
The Aveva-OSIsoft deal
Cambridge-based Aveva is publicly listed, a constituent of the FTSE 100 index and one of the UK’s oldest technology companies, having been spun out of Cambridge University in the 1960s. It is a global leader in engineering and industrial software, driving digital transformation across the entire asset and operations life cycle of capital-intensive industries. The company’s engineering, planning and operations, asset performance, and monitoring and control solutions deliver proven results to over 16,000 customers across the globe.
OSIsoft is a pioneer and global leader in real-time industrial operational data software and services. Its PI System is the system of record for data capture, storage, analysis and sharing of real-time industrial sensor-based data across all operations, enabling customers to connect disparate sources of time-series data in an efficient and cost-effective manner.
Aveva, while listed and based in the UK, is majority-owned by France’s Schneider Electric, a long-term client of the firm for whom Debevoise has acted on many previous occasions, including on one of its early major software deals: the US$2bn takeover of Spanish industrial software business Telvent GIT SA in 2011.
The transaction itself was highly complex and depended, upon other things, on approval from the shareholders of Aveva and a parallel £2.8bn rights issue to partially fund the acquisition.
At the same time, the merger control element of the deal was crucial. The transaction was conditional on merger control approval in the US, in Europe, Austria, Cyprus, Germany and Serbia, as well as globally in Brazil, Colombia, Russia and Saudi Arabia. It was also subject to approval by the Committee on Foreign Investment in the US (CFIUS).
All of those moving parts needed coordinating from a process, timing and substantive perspective to ensure the deal could close as expeditiously as possible. Led by London partner Timothy McIver, the deal demanded effective collaboration, including the coordination of antitrust teams from London, Moscow, New York and Washington, with the London team primarily responsible for managing local counsel globally.
“The Debevoise antitrust and competition team is relatively small in London, although this has not been a barrier to the quality or volume of work that we handle, so I get to work very closely with Tim McIver who runs the team”, explains MacDonald.
“The wider group across Europe and the US is also very well connected, meaning I often work with other partners in the team, including Michael Schaper, with whom I worked most recently on two deals involving the Carlyle Group and Syniverse, Ted Hassi, working on Clayton, Dubilier & Rice’s $6bn acquisition of two packaging companies, Multi-Color Corporation and Fort Dearborn, and Erica Weisgerber.”
If the deal had not closed because of regulatory concerns, there would have been a delay in Aveva’s achieving its strategic objectives and the potential for a significant impact on its reputation. Aveva had also agreed to pay the sellers a termination fee if that was the outcome.
Meanwhile, in the background, the businesses were having to deal with the impact of the pandemic. It was still relatively early in the crisis, so the business and external counsel were all climbing a steep learning curve with remote working, while the antitrust authorities themselves were also both working remotely. In many cases, they had imposed restrictions on their normal operations – in some cases closing entirely, in others extending or suspending the normal review deadlines.
That meant, despite the number of filings, the parties were faced with an aggressive and uncertain timeline for the transaction, making project management skills vital. Effectively working with all the individual local firms and communicating their work back to the parties and the various advisor groups, including the various banks involved, would have been a significant organisational undertaking in normal times. Happening as it did between August 2020 and mid-January 2021 (the date of the final competition clearance) was an unprecedented challenge.
The approval process was also complex and demanding. Neither the European Commission nor the UK CMA had reviewed a transaction before that concerned the industrial operational data software that was the subject of the transaction, and nor were there any relevant national precedents. At the same time, the parties operate at the cutting-edge of the digitalisation of industry, with the advent of the Industrial Internet of Things having transformed the competitive landscape with new open-source applications and cloud services challenging traditional suppliers.
As MacDonald highlights, the varied jurisdictions involved required close and constant coordination. This was made easier by the fact that Debevoise’s antitrust practice is fully integrated. The London office coordinated with colleagues in New York, Washington, Frankfurt and Moscow to provide the clients with globally strategic advice. Where Debevoise does not have offices, it has a network of firms in all major jurisdictions as well as relationships with local firms elsewhere to respond immediately to client demands. This was key to ensuring the transaction ran smoothly from an antitrust perspective, and Debevoise’s existing relationships with local counsel assisted the parties in getting timely and unconditional clearance.
Since acting on this matter, Debevoise has advised Schneider Electric on several complex transactions, also involving obtaining merger control approvals across various jurisdictions. Those included the acquisition of an 80% controlling stake in Operation Technology Inc/ ETAP Automation, the leading software platform for electrical power systems modelling and simulation, which required multiple merger control and foreign investment approvals. And the acquisition of a strategic 30% stake in Uplight, the technology partner of energy providers transitioning to clean energy, which was recently given clearance by the European Commission.
“I learned a great deal about both Schneider Electric and AVEVA because of this deal, including the background to that relationship and both parties’ broader businesses. The knowledge I gained on this deal has also been invaluable in subsequent transactions I have worked on involving Schneider Electric, one of Debevoise’s longstanding clients”, MacDonald says.
“As I also had to learn exactly what the target did, as is the case in all transactions, I was able to spend a great deal of time talking to the business about how OSIsoft’s product – the ‘PI System’ – fits into the overall architecture of automation and control systems, and how that ‘stack’ has been analysed previously by competition authorities globally. Having been involved in a number of deals subsequently involving the industrial software market, the knowledge I gained by putting the time in on this deal has been very valuable indeed.”
While the pandemic posed numerous challenges, MacDonald found that working from home with everyone on Zoom and Teams helped bring the various teams closer and may actually have improved communication. “This was very much an international transaction, with the corporate work being split between the US and UK, and the merger control aspects spanning between South America and Asia, working from home created more flexibility and meant the teams were able to jump on calls at a moment’s notice where required.”
She says the antitrust and competition team got into the habit of catching up over Zoom on a daily basis, mimicking the usual morning meeting in the office, which ensured everyone stayed on top of progress and provided some much-needed social interaction for those living alone.
“As a junior associate, I had not met many of the antitrust team based in the US and, while the pandemic was terrible in many ways, it has certainly made me feel more connected and get to know my US colleagues in a way I wouldn’t have been able to without physically travelling there.”
About Megan MacDonald
2018-present: Associate, Debevoise & Plimpton
2016-2018: Trainee solicitor, Debevoise & Plimpton
Who’s Who: the Debevoise & Plimpton team
Partner: Timothy McIver
Associates: Megan MacDonald, Anne-Mette Heemsoth, Kayleigh Anderson
International Counsel: Anna Maximenko
Counsel: Kyra Bromley
Partner: Ted Hassi