On October 30, 2017, CEE Legal Matters reported that South African investment fund Coast2Coast had acquired Polish soup and pate manufacturer Profi — one of several recent CEE investments. Coast2Coast's Regional Counsel CEE Anna Wawrzynczak agreed to answer our questions about the recent acquisitions.
CEELM: CEELM has reported on Coast2Coast’s acquisitions of Bezgluten and Stella Pack as reported by CEE Legal Matters on November 17, 2017 and, Krosno S.A. as reported by CEE Legal Matters on October 10, 2016, and Unitop Group as reported on November 23, 2017. In those matters, Gessel, White & Case, Dentons, Deloitte Legal, and SSW advised Coast2Coast as external counsel. Why did you choose to have a different law firm advising you on each deal? What external counsel selection system do you have at Coast2Coast and why did you select CMS for the Profi acquisition?
A.W: I would say that the reason for that was rather of practical nature. First of all, Coast2Coast entered the Polish market as early as 2016 and as a new player on the capital market we wanted to work with a selection of local legal services providers so that in the future we could stick to a panel of trusted legal advisers on a regular basis. Second of all, working on an acquisition requires the involvement of many lawyers, especially during the due diligence phase. It would have been too burdensome to involve the same team on several deals.
If it comes to the selection of our legal advisors, we act according to our internal tender policy. The request for proposals is sent to a few legal firms and the legal counsel is chosen based, among other things, on quality, credentials, and fee quote criteria. We assess the counsels’ track record in advising on transactions of a comparable nature, and evaluate our past cooperation, the commercial and cultural approach, and firm's flexibility. The legal market is not as big as it seems. After being on this market for quite a long time, I know that reputation and client recommendations are crucial.
If it comes to CMS, it’s a very reputable and well-respected law firm with a presence and leading position in CEE in M&A and financing. We were extremely satisfied with their legal assistance on Profi.
CEELM: Did any of the companies acquired by Bounty Brands have their own in-house legal teams? What happened to those teams post-acquisition?
A.W: Each Bounty Brands portfolio company either has its own in-house lawyers who have deep knowledge about the company’s legal affairs or cooperate with selected external legal advisors on a regular basis. Being responsible for CEE legal issues, I maintain close relations with both, as cooperation is the key to success.
CEELM: What other responsibilities does your role entail other than acquisitions in CEE?
A.W: In 2017, the major focus was put on acquisitions. I literally joined the Coast2Coast team in the middle of the action. I was involved in all aspects of each transaction as a part of the deal team. This allowed me to gain sufficient knowledge about the targets, their structure and organization, people and business risk, etc. Now I can leverage on this.
Working on transactions is extremely exciting, but I also appreciate working on other legal matters, such as post-closing requirements, corporate restructuring, HR issues, contracts, reporting, compliance obligations, and many more. I manage and supervise other lawyers, who support me on all topics. My scope of duties is very broad. Priorities shift based on business needs and deadlines. Working on a wide range of legal issues and being in touch with the business is intellectually challenging. Setting priorities is crucial, as is the ability to see things from a business perspective, and strategize and anticipate risks for the company.
CEELM: Now that Profi is owned by Coast2Coast’s Bounty Brands, will its structure change?
A.W: The Profi group consists of four legal entities and our plan is to simplify it by merging all entities into one.
CEELM: CMS Partner Marek Sawicki has stated that, “looking at the European market we can clearly see that a significant part of the transactions involve family offices, often as joint investments with private equity funds." From your experience, what are the peculiarities of acquiring family businesses.
A.W.: Buying a family business requires a lot of sense and respect for the seller, who often built it from scratch, feels responsible for its future and the future of its employees, and who went through the ups and downs of business cycles and who know the company better than the investor. In the case of Profi we were approaching a strong, award-winning Polish brand, one of the leading food producers in Poland.
I would say the biggest challenge involved with this transaction was making sure that all the sellers felt satisfied with the agreed terms of the transaction. We are extremely happy to be able to work with the Profi team and actively participate in the process of increasing the company’s market value.