To become of the French market leaders in Digital Services and Solutions, since 2016, Open has
acquired specialists: Lateos (an integrator of e-commerce and marketplace solutions), Kynapse
(Digital Transformation Consultancy specialized in DataScience and IA), MCO Finance (publisher
of Xloan, a credit and crowd-funding software suite) and La Netscouade (a Digital Communication
Agency).
For Guy Mamou-Mani and Frédéric Sebag, Co-Presidents of Open: "The acquisition of IZBERG is fully in line with Open's strategic direction over the last three years and our intention to strengthen the digital section of our end-to-end offering. Its usage billing model is fully in line with the development of Open's Business Model. Marketplaces are now indispensable economic models in business transformation, so we are delighted to be able to include this technological know-how among our range of expertise and offer our customers this opportunity for innovation."
Interview with Fabien Courvoisier at Solegal
When devising documentation for such an acquisition, what three points must you consider?
First of all, the lawyer must be practical, i.e. anticipate as far as possible the implementation of the provisions contained in the agreement (e.g., provisions regarding the price, earn-out, or indemnification).
Moreover, it is essential to know as much as possible about your client and the way they usually operate in such a transaction, to perfectly answer their needs and draft legal documentation that will put them in the best possible situation to negotiate and identify the issues that are not worth fighting about.
Finally, in this type of acquisition, where there are different sellers (entrepreneurs, investment funds and business angels), it is necessary to bear in mind that each seller has its own expectations, which make the negotiations more complex. The lawyer must, therefore, try to understand the other sides’ situation in order to anticipate as much as possible all kinds of problems that may arise in the course of negotiations. And keep in mind that all M&A negotiations require a number of compromises.
When negotiating on such a deal, what should the clients consider?
The clients should consider the main terms and conditions that primarily led them to engage discussions. Reminding them this is helpful when negotiations on details inevitably arise.
In addition, clients need to be transparent with their legal advisers on what they are willing to negotiate. This will allow the legal adviser to better interact with his/her counterpart.
What challenges arose? How did you navigate them?
The first challenge in this transaction was the very tight schedule. Timing in business operations is key, and entrepreneurs, which often take quickly significant decisions, expect their legal advisers to follow their pace. In this acquisition, we were able to deliver a first draft of the master agreement within 24hrs, after being instructed by our client.
Moreover, our team had to adapt significantly and quickly to the changes we faced in this transaction: there were several times substantial changes of the main terms and conditions of the deal, which impacted the structure of the transaction and the corresponding legal documentation.
Finally, as usual in these kinds of operations, we had a lot of hurdles to overcome, and had tough negotiations with all parties until the last minute.
