KLA-Koury Lopes Advogados advised SKion Water.
Faxon Química is a Brazilian firm that develops and produces chemicals for use in effluent and industrial water treatment. Its products are recognised nationally for their quality and excellence, offering alternatives in the field of water revitalisation.
SKion Water, itself a subsidiary of German entrepreneur Susanne Klatten’s investment company SKion GmbH, provides reliable and efficient water and wastewater treatment solutions. Its services also include the development and implementation of innovative new water technologies. The acquisition will allow SKion Water to grow its portfolio of solutions and further expand its operations in Brazil and wider Latin America.
Lawyer Monthly had the pleasure to speak with Tássia Warken da Rosa at Dutra Gestão Empresarial to give us some further insight into this transaction:
Can you tell us more about your team and their roles during this transaction?
Here at Dutra Gestão Empresarial, we are specialised both in assisting M&A transactions and mainly in assisting companies in preparing to persue an M&A transaction, from a business planning and management perspective. Our purpose is to inspire and drive the creation of virtuous businesses. In order to do that, we lead the strategic planning and participate in corporate governance structuring, financing and capital structuring.
We have been working with Faxon since 2018 until we agreed the company was ready to take this next step, which led to concluding the transaction with Paques and the Skion group. Throughout the project we engaged with several teammates from different fields and they all contributed to our final result.
We are part of Método Dutra, a work method that includes fellow firms in legal and accounting, among other fields. The Dutra Law Firm team, led by Dr Jonatan Werb, provided legal advice on the transaction, and Dutra Accounting, led by Sinara de Mello, advised as well. Our founder, Vinicius Dutra, also participated in negotiations. Because we have a very comprehensive team, we were able to provide complete assistance to Faxon in all steps of preparation and negotiations while also continuing to advise on post-merger integration.
How were their skills and experience ideally suited to the task?
The process of preparing a company to engage in an M&A transaction, when it is intended to bring tremendous growth opportunities to both parties, is often comprehensive in scope. We are not talking about just finding an investor and negotiating and signing an agreement, even if that is a large and very important part of the process.
Here at Dutra, when we talk about preparing a company to make a virtuous transaction, we mean bringing in a whole team of experts from finance to legal, technology, communication, strategy, and so on. We work with the company to improve its business model and market positioning, to reach another level in control and governance, to be more efficient and to deliver better results. We prepare the ground so that the seeds that are thrown into it will bear fruit stronger and faster.
We are part of Método Dutra, a work method that includes fellow firms in legal and accounting, among other fields.
The multidisciplinary skills and diverse experience of the team are key to develop this kind of project. Dozens of professionals, lawyers, accountants and business advisors joined forces to help the owner of the business to plan, then to execute the plan, and to make some of the biggest decisions in a founder’s life: when to pursue an M&A deal, who to partner with and how to make that happen the best way possible.
How did you work with KLA Advogados to ensure satisfactory completion of the acquisition for all parties concerned?
An M&A advisor is of great importance for both sides of the deal, in that they are able to leave everyone feeling satisfied long after day one. Before turning to a new chapter of the business owners’ lives by completing an M&A transaction, both parties need to be certain about what they are getting into. Surprises are no good and without proper advice there will be many of them. An industry executive is most likely not used to signing M&A deals on a daily basis, and they are not straightforward.
On the other hand, an M&A advisor understands deeply not only what is said and negotiated, but more importantly knows those essential things that may not have been mentioned. An M&A may be more complex than a marriage, both to get in and out, so you really want to understand the implications of each and every decision made along the deal. There is so much extra synergy and so many benefits that may be collected from an M&A when two good advisors step in.
We were very glad to interact again with KLA in this transaction and were happy to deliver our clients a smooth negotiation and competition of the deal. When both advisors defend their client’s interests with zeal and rationality, admiration and mutual respect are built.
Did you encounter any challenges during the course of this transaction?
Every transaction presents a different context. There are expectations to be met on both sides that are particular to each person, each company and each specific business. So even if we are already used to a client or an industry, one of the virtues of a good advisor is being open to identifying and addressing these particular situations.
[ymal]
Once the advisory is performed with empathy, deep technical knowledge, ethics and respect, the challenges do not become problems, but only puzzles to be solved. At the end of the day, in an M&A deal, the parties that are on different sides of the table throughout the negotiation become one side soon afterwards, so a challenge for the other party is a challenge for our client as well. The key is to always pursue a deal that is truly good for everyone.
How did you overcome these challenges?
With empathy, deep technical knowledge, ethics and respect. Having a pro-solution attitude is the way to solve any challenge
What is most important to keep in mind during stake purchases of this sort?
There are so many things to keep in mind at each step of a transaction. You should start by understanding your market and having a comprehensive view of your business from an outside perspective, not just as an owner. If you plan to sell a stake in your business, start to look at it as a purchaser would.
You also need to gain a certain amount of knowledge about how M&A deals actually work to get your expectations levelled, and you should look for both fellow business owners who have done a similar deal, but also a good M&A advisor that you find trustworthy. Remember that your fellow owner’s experience might be a good benchmark, but that might have been a different deal in a completely dissimilar context than the ones you might face. You need someone you can trust on your side, and who knows what he/she is doing. If you have those things in mind, you will probably become aware of all the others – and they will be many.
