Mergermarket League: Top Italian 2017 individual legal advisers
This is a review of 2017’s most prolific Italian individual legal advisers.
Pietro Zanoni, Partner at NCTM, who was Italy’s most prolific legal adviser in 2017, comments on the opportunities and activity expected in the coming 12 months:
Do you expect M&A activity to be stronger or weaker in your region in 2018 compared to last year?
Thanks to a strong pipeline and based on the enthusiasm showed by clients, I am optimistic and expect an acceleration of M&A and private equity activity in 2018 – at least for the first half of the year. Actually, NCTM’s overall pipeline shows an increase in the average size of the buyouts, rather than in the number of deals. This bullish outlook might be explained by a number of factors, including: aggressiveness of domestic and foreign investors in pursuing targets in all sectors (especially the industrial manufacturing sector), stability of interest rates and lucrative transaction multiples for sellers.
Will Brexit have a significant impact on M&A this year?
Despite the market uncertainty following Britain’s decision to leave the European Union, I have not yet identified the material impact of ‘Brexit’ on M&A levels in Italy. This, however, does not mean that eventually the withdrawal of the United Kingdom will not have implications for M&A and ECM transactions across Europe, including Italy. It is just too early to say what these implications will be on any area of law. A lot, of course, depends on the outcome of the negotiations between London and Brussels, and the fact that the EU leaders agreed to move onto the second phase of the talks does not shed much light on the situation.
Actually, the hard part comes now. For sure, once the withdrawal procedure has come to an end, investors will not be able to count on most of the European laws and regulations that have facilitated certain M&A transactions across the English Channel. For instance, cross-border mergers between Italian and UK companies – which are now permitted under the EU Merger Directive – may become impossible. But I do not think that even a ‘hard Brexit’ will cause insurmountable difficulties on M&A activity. Moreover, if one of the effects of ‘Brexit’ is that many financial investors relocate in the European Union, the flow of inbound investments now coming from Britain will drop.
Based on your pipeline, where are the bidders coming from and where are the companies in your region looking to buy?
From what I have been seeing in my pipeline, most of the foreign investors are coming from the United States, other EU countries, Switzerland and China (including Hong Kong). Italian companies are mainly looking for potential targets for strategic growth in the EU, US or in emerging markets. Iran is expected to be more and more important as a region to invest for Italian companies.
What kind of cross-sector deals can be expected this year?
In August 2017, the Italian Parliament passed a new law (law no. 124/2017) which, among other things, has removed many of the previous restrictions on the ownership and management of pharmacies in Italy. Thanks to this reform, companies are now allowed to own one or more pharmacies (including the relevant authorisations), up to 20% of the pharmacies located within the same region. Clearly, the new law opens the door to private investors willing to establish pharmacy retail chains in Italy. This might cause retail chains to integrate horizontally or distributors to integrate vertically in this sector.
Do you expect PE activity to accelerate in your region? Do you expect more IPOs this year than last?
During1Q18, I would expect to still see more exits. IPOs are flourishing in the Italian market. 2017 has been one of the best years ever in terms of the number of companies listed, and 2018 is expected to be an even stronger year than 2017, anticipating approximately 50 IPOs. The market has greatly benefited from the introduction of so-called PIR investment plans, aimed at boosting inflows into SMEs by providing tax incentives for investments in Italian stocks and bonds.
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Global Deal Criteria: Deals considered for the rankings have been announced in 2017, where either the bidder, target, vendor is based in the ranking’s geography. All data is based on transactions over USD 5m and which are available on Mergermarket’s M&A deals database. Deals with undisclosed deal values are included where the target’s turnover exceeds USD 10m. Deals where the stake acquired is less than 30%, or 10% in Asia-Pacific, will only be included if the value is greater than USD 100m.