On February 26, 2018, CEE Legal Matters reported that Timex Card had sold 51 % of its shares to UTA GmbH. Agnieszka Slowiak, Chief Legal Counsel at Timex Card, spoke with us about the deal.
CEELM: We’re not quite clear on the full nature of the deal, including Timex Card’s ownership pre-and-post sale. Can you break it down for us?
A.S: The transaction in question was a so-called “share deal." It was structured as an acquisition of shares, in which UTA GmbH acquired a 51% stake in its distributor, Timex Card sp. z o.o., from its sole shareholder. As a result UTA GmbH became a majority shareholder. Additionally, under the Timex Card acquisition agreement, UTA GmbH has an option to purchase shares held by the minority shareholder (the seller in the share deal), who in turn has an option to sell its shares to UTA GmbH.
CEELM: Union Tank Eckstein (UTA) retained external counsel for assistance. Why did the sellers choose not to?
A.S: Neither the seller nor the company refrained totally from external advisors. However, of course, the directions of the deal were set, decisions made, and the transaction managed internally. Total refraining from external advisors would not be possible particularly due to the multi-jurisdictional character of the transaction. It is enough to say that Timex Card is present not only in Poland but also in Lithuania, Latvia, Estonia and Ukraine, so we had to deal with five different legal jurisdictions, four of which were foreign, including one from outside the European Union. Additionally, the parties to the transaction were from another two distinct legal jurisdictions. Even for this reason only, it was necessary to involve foreign lawyers.
Apart from the wide territorial scope, the scale of Timex Card’s activity and the determination to keep the project's time schedule also made it necessary to organize additional support with workload capabilities. Not without reason the buyer involved law firms with big teams of lawyers. We decided to cooperate with Russell Bedford in Warsaw, and I am more than happy with that choice. Not only because they are experienced legal professionals but also because I find them to be a very dedicated and efficient team, always available.
The good organization of the project and cooperation with external advisors when necessary were the keys to achieving our goals.
CEELM: What were the biggest challenges you encountered in the sale?
A.S: One of the most challenging parts of the deal were the negotiations with the internal specialists of the buyer. I must admit that I was impressed by their extensive knowledge and experience in such transactions. They were challenging opponents to cross swords with, but thanks to this the successful completion of the transaction gives me only more satisfaction.
Also the multi–jurisdictional character of the transaction I already mentioned before was a demanding part of the deal. The difficulty -- and thus also a risk -- in such cases arises from the diversity of legal structures and their consequences in each legal system. The careful clarification by the lawyers, understanding and then adaptation to the whole transaction conducted in another legal jurisdiction, is always an important part of each project with international aspects. This always requires great attention. Therefore, despite several years of experience, I still find deals concerning multi-jurisdictional cooperation challenging.
Not less demanding was the preparation of the company itself for sale and taking it across the whole transaction. Due to the fact that the company did not have an in-house lawyer it required my total and direct involvement in the company’s affairs on a daily basis, consisting, among other things, in internal legal advisory, project coordination, supporting the management board and the employees in this extraordinary process, and a multiplicity of other tasks that had to be undertaken as legal project manager. Such efforts, however, brought results, and we achieved the intended goal by closing the transaction with no damage to the company's normal business operations, which was of great importance to the management board and the company's shareholder.
CEELM: What was the most difficult moment in the negotiations with the buyer?
A.S: When the opposing interests and expectations of a buyer and a seller clash it is always difficult to point out just one most difficult moment in the negotiations. They were provided strictly on the merits, so many of the standpoints that appeared on both sides touched essential substantive matters and thus generated further issues that required intense discussion. It was even more difficult considering that apart from closing the deal we also had to create conditions to ensure further cooperation between the parties within the company Timex Card.
CEELM: Will the new ownership structure of Timex Card influence your role in the company in any way?
A.S: I think it is still too early to answer this question. It remains open. For now I can say that I am proud to have been chosen to advise on this complex transaction and to manage its legal aspects. The deal has been successfully completed and the company business remains safe. This is the most important thing for now I need to know as a legal professional and as the person responsible for the transaction.
