Transactions
& Case Studies

June 2015


£1.0 billion

Initial Public Offering
Exclusive Financial Advisor to Sophos Group plc (and Funds Advised by Apax Partners LLP) on their £405 million Initial Public Offering, giving Sophos Group plc a market capitalisation of £1.0 billion

On June 26, 2015, Sophos Group plc (“Sophos”), a global provider of cloud-enabled end-user and network security solutions focused on the small and mid-market segment, announced the successful pricing of its initial public offering when it listed on the London Stock Exchange at 225 pence per share. After the greenshoe option was exercised, a total of £405 million proceeds were raised, giving Sophos a market capitalisation of £1.0 billion upon listing. This transaction represented the largest UK software IPO in history at that time. Moelis & Company was mandated by Sophos to act as its exclusive financial advisor in connection with the IPO.

Moelis & Company led Sophos through the entire transaction, providing critical advice on matters such as syndicate structure, positioning and pricing. Due to the relative lack of software security companies listed in Europe at the time, Sophos was considered a scarce asset in that region. As a result, Moelis & Company’s advice to list in London, rather than the U.S., allowed Sophos to achieve a premium valuation from European investors. This resulted in an extremely high-quality order book, which was aligned with Sophos’ interests for the future.

Sophos performed strongly in the public markets following the IPO. Given the ongoing momentum in the share price, funds advised by Apax Partners LLP decided to reduce their holding in Sophos via a £159 million accelerated bookbuild offering, completed on December 1, 2015. Moelis & Company was the exclusive financial advisor to the funds advised by Apax Partners LLP on this transaction as well.

April 2015


£1.0 billion

Restructuring
Exclusive Financial Advisor to the Ad Hoc Committee of Senior Secured Debtholders in Connection with the £1.0 billion Restructuring of Towergate Insurance

On April 7, 2015, Towergate Insurance Limited (“Towergate” or collectively with its subsidiaries the “Group”), the United Kingdom’s largest independently owned general insurance intermediary, announced the completion of its balance sheet restructuring.

Since the Group was formed in 1997, it had grown principally by acquisitions, having purchased over 300 businesses. In 2011, private equity company Advent International acquired a significant equity stake alongside the Group’s founder, Peter Cullum, investing over £200 million with a view to accelerating Towergate’s consolidation strategy. However, a number of commercial, operational and financial issues created an unsustainable situation for the company’s capital structure in 2014; Towergate needed to find a way to restructure negotiations with a disparate group of stakeholders (with competing objectives) while maintaining operational stability.

In November, 2014, Moelis & Company was appointed by a group of the Senior Secured Creditors (SSC) who held roughly 70% of the senior secured debt. Moelis & Company worked with the company and the SSC Ad Hoc Committee (group of 11 key institutions between Europe and the US) to design the Senior-Secured Only solution that formed the basis of the consensual restructuring deal agreed with the Senior Unsecured Creditors. Moelis & Company played a critical role in re-shaping the process in favour of the SSC Ad Hoc Committee, a central group that eventually had the maximum negotiating leverage and drove the transaction.

Moelis & Company achieved a par plus solution for SSC within two months of the Firm’s appointment when debt was trading at 80 pence to the pound. The restructuring significantly delevered the company, reducing total debt by approximately 60% through the effective equitisation of £360 million of debt claims and the provision of £300 million equity contribution. The SSC also fully underwrote new £75 million Super Senior Notes providing Towergate additional liquidity.

The transaction was effected through a ‘dual-track’ UK Scheme of Arrangement with both the SSCs and Senior Unsecured Notes overwhelmingly approving the transaction with 98% and 99% respectively voting in favour.

March 2015


$3.5 billion

Acquisition of Economic Zones World FZE from Port and Free Zone World FZE
Financial Advisor to DP World Limited on its $3.5 billion Acquisition of Economic Zones World

In March, 2015, DP World Limited (“DP World”) successfully completed its acquisition of Economic Zones World FZE (“EZW”) from Port and Free Zones World FZE (“PFZW”) for a total cash consideration of $2.6 billion (subject to certain adjustments), in addition to the assumption of net debt ($859 million as of June 30, 2014). Moelis & Company served as financial advisor to DP World and led all aspects of the transaction from inception to closing.

This transaction was consistent with DP World’s strategy of providing port-centric integrated logistics solutions at key gateway locations. DP World is one of the leading marine terminal operators in the world and the Jebel Ali port is its flagship port in the Middle East. EZW’s primary business unit, the Jebel Ali Free Zone FZE (“JAFZ”), is a 57 square kilometer modern commercial and industrial logistics park that is located adjacent to Jebel Ali port and serves as an integral component of the supply chain for DP World’s customers at Jebel Ali port.

Moelis & Company designed a tailored due diligence and negotiations process for DP World, in order to maintain confidentiality and limit press leaks. As the acquisition constituted a Related Party and Class 1 transaction for the purposes of UK Listing Rules, Moelis & Company conducted a comprehensive evaluation of EZW to develop a view on valuation, draft a shareholder circular and obtain the support of DP World’s independent directors. Moelis & Company was also intimately engaged in key negotiations with the seller and was instrumental in achieving a successful outcome for its client.

DP World’s acquisition was the largest M&A deal involving a Middle Eastern target in 2014-2015 and had compelling strategic, operational and financial benefits for DP World. It created the leading port and free zone in the Middle East, enhanced DP World’s competitive advantage by strengthening Jebel Ali port’s integrated product offering and provided an opportunity to control and improve investment levels at JAFZ. The acquisition was also expected to enhance earnings by more than 15 percent and generate greater than a 7 percent return on capital employed in the first full financial year following completion.

February 2015


$1.2 billion

Sale of EMPAQUE to Crown Holdings, Inc.
Exclusive Financial Advisor to Heineken N.V. on the $1.2 billion sale of its Mexican packaging business, EMPAQUE, to Crown Holdings

On February 18, 2015, Heineken N.V. (“Heineken”) completed the sale of its Mexican packaging business EMPAQUE – a leading Mexican manufacturer of aluminum cans and ends, bottle caps and glass bottles – to Crown Holdings Inc. (“Crown”). Moelis & Company acted as exclusive financial advisor to Heineken in the multifaceted, cross-border transaction.

The successful execution of this complex and competitive sale involved a dual-track that allowed Heineken to maintain the option of a “sale of parts” or a “sale of whole” process. In addition, Moelis & Company helped negotiate a strategic, long-term supply contract between the client and the buyer that fulfilled the needs of multiple stakeholders within the Heineken organization. Divesting the EMPAQUE packaging operations ultimately allowed Heineken to focus its resources fully on brewing, marketing and selling its world class portfolio of beer brands in Mexico, and provided additional financial flexibility to invest in its core operations.

Moelis & Company helped Heineken achieve a premium valuation multiple relative to comparable metal and glass packaging transactions globally. Following the divestment, EMPAQUE remains a key strategic supplier to Cuauhtémoc Moctezuma, Heineken’s wholly owned subsidiary in Mexico, through long-term supply contracts.

October 2014


£2.3 billion

Restructuring
Financial Advisor to Angelo Gordon and Co-ordinator of Junior Noteholders in connection with the £2.3 billion Restructuring of Punch Taverns

On October 8, 2014, Punch Taverns plc (“Punch”), the second largest leased pub operator in the UK, successfully completed its restructuring of the Punch A and Punch B securitizations. Significant changes in the commercial environment coupled with an over-levered capital structure drove Punch to initiate a review of its capital structure, ultimately resulting in a comprehensive financial restructuring which created a more robust and sustainable debt structure. The restructuring plan was agreed to by 17 different note tranches and shareholders and achieved strong support from all stakeholders throughout the process, with over 75% voting in approval at each of the meetings. Moelis & Company acted as exclusive financial advisor to Angelo Gordon, the single largest creditor across both Punch securitizations, coordinated the Junior Noteholder group, and played a pivotal role by developing the debt-for-equity proposal which was eventually implemented as part of the restructuring. The transaction represents one of the most high-profile European whole-business securitization restructurings in 2014.

October 2014


$4.2 billion Pre-negotiated Chapter 11 Reorganization; $570 million debt financing; $600 million equity financing

Pre-negotiated Chapter 11 Reorganization, debt financing and equity financing
Financial Advisor to Momentive Performance Materials on its $4.2 billion Pre-negotiated Chapter 11 Reorganization

On October 24, 2014, Momentive Performance Materials (“MPM”), one of the world’s largest producers of silicones, silicone derivatives and quartz products, successfully emerged from Chapter 11 Bankruptcy protection. Moelis & Company acted as financial advisor to MPM and was instrumental in initiating, evaluating and negotiating the transaction. Over the course of an intensive multi-party due diligence period, Moelis & Company evaluated and assisted in the development of the pro forma business plan, negotiated a fully committed equity rights offering and assisted in securing $570 million in DIP financing as well as exit financing at favorable terms. On April 13, 2014,
MPM entered into a Restructuring Support Agreement with holders of $1.3 billion of Second Lien Notes, the fulcrum security, under a pre-negotiated plan, and on September 10, 2014, MPM’s Plan of Reorganization was confirmed. Key terms included a $600 million fully committed rights offering, which was backstopped by approximately 90% of the holders of the Second Lien Notes, along with a 100% recovery to the holders of First Lien Senior Notes and Replacement Notes, trade creditors and other general unsecured creditors.

Moelis & Company played a pivotal role as lead witness in the landmark Bankruptcy Court decision on cram down interest rates based on the Supreme Court’s Till decision, providing expert testimony regarding the appropriate rate for the Replacement Notes. The Court largely found in favor of MPM, saving the estate hundreds of millions of dollars while providing long-term financing to fund its business operations and future growth.