Clifford Chance advised both sides when CVC Capital Partners and Goldman Sachs Capital Partners sold German car parts manufacturer Empe Holding to Alpinvest Partners. Separate Clifford Chance teams advised sellers CVC and Goldman Sachs, and Alpinvest’s financiers HypoVereinsbank (HVB).
Clifford Chance Frankfurt partner Christopher Kellet, who led the team advising CVC and Goldman Sachs, defended the dual role.
“There are two completely different deals going on,” he said. “The buyer’s acting as borrower and the bank’s acting as lender on one deal, and the other deal is the buyer acting versus the seller… We had normal Chinese walls and the sellers and the banks were quite happy with it.”
Although German conflict rules are stricter than the UK’s, effective Chinese walls are easier for German firms to implement because they have geographically separate offices.
Munich-based Clifford Chance associate Andreas Feuerstein advised HVB, which provided the debt finance for Alpinvest. Kellet’s Frankfurt-based team comprised partner David Elshorst, who advised on real estate and environmental issues, and associates Thorsten Stuecklin and Rodric Pagel.
One of the other lawyers involved in the deal commented: “German conflict rules are fairly strict, but there’s a smaller pool of law firms that can do the job adequately, so parties are forced to find constructive solutions.”
In German auctions such as this one, with numerous bidders and banks involved, frequently teams from one law firm have advised two separate bidders, but it is unusual to see the same law firm on opposite sides of the transaction. The ethics of this dual role have provoked much debate among German private equity lawyers.
Milbank Tweed Hadley & McCloy partner Crayton Bell had a secondary role, checking that the transaction complied with Goldman Sachs’ standards. Milbank has a close relationship with Goldman Sachs and has advised it on many of its German private equity deals.
Linklaters advised Alpinvest, which was rebranded recently. It was formerly known as NIB Capital Private Equity. The firm was first instructed by the private equity house’s German investment manager two years ago and has advised on most of its German deals since. Linklaters advised NIB on its first foray into the German automotive parts industry, when it acquired Carcoustics.
Corporate lawyers Andreas Füchsel, Christine Oppenhoff and Ulrich Wolff and banking partner Marc Trinkaus led the Linklaters team.