Lovells wins record deal for Terra Firma

Lovells is celebrating after advising Guy Hands’ investment vehicle Terra Firma on Germany’s biggest ever private equity deal.

As first revealed on last Wednesday (18 May), the firm’s German office advised Terra Firma on its purchase, through portfolio company Deutsche Annington, of leading German private housing company Viterra from E.ON for approximately €7bn (£4.82bn).

The deal is a coup for Lovells because although the City firm has advised Terra Firma on a number of other deals, this is the first successful deal on which the two have worked together.

Terra Firma, which historically has instructed Linklaters in Germany, was first introduced to Lovells through the firm’s Berlin office. But since the original introduction, the head of Terra Firma in Germany, Matthias Moser, left for US private equity house Fortress.

Lovells German-based private equity partner Oliver Felsenstein, who led the team advising Terra Firma, said: “When Moser left Terra Firma in early 2004, Lovells’ relationship with the private equity firm was on the verge of collapsing, but I happened to know one of its in-house lawyers.”

Last year, Lovells advised Terra Firma on two German deals on which the private equity house was pipped at the post. The first was GAGFAH, which was sold to Fortress, and the second ThyssenKrupp Immobilien, which went to Morgan Stanley Real Estate Funds. Meanwhile, in the UK, Lovells advised Terra Firma on its unsuccessful bid for NTL Masts.

The acquisition exceeds the value of Hands’ previous investments, including the £1.9bn he spent buying the Le Meridien hotel group from Compass in 2000.

Terra Firma competed against Fortress and a consortium of Cerberus and Goldman Sachs’ Whitehall fund to win Viterra.