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Deal Expanded: Interview with Savoric & Partners on 2020 DOTY for Croatia

Deal Expanded: Interview with Savoric & Partners on 2020 DOTY for Croatia

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Savoric & Partners’ Boris Savoric and Lovro Gasparac Talk About The Deal of the Year in Croatia.

CEELM: First, congratulations on winning the Deal of the Year Award in Croatia!

Gasparac: Thank you, it is a great honor to receive this award and see that our work on this deal was recognized by the judges!

CEELM: Can you describe the deal for us and Savoric’s role in making it happen?

Savoric: The Stillfront Group, a global group of gaming studios, acquired Nanobit, a game development studio based in Zagreb, for a total of USD 148 million. The transaction consists of two phases. In the first of them, 78% of Nanobit’s shares (excluding treasury shares) were acquired by Stillfront for a consideration of approximately USD 100 million, payable partially in cash and partially in Stillfront shares. The remaining 22% of Nanobit’s shares (excluding treasury shares) will be acquired in 2023 for a consideration of up to USD 48 million, also consisting of cash and Stillfront shares.

Gasparac: Our firm worked on this deal as the sellers’ Croatian counsel. In addition to taking the lead with respect to all Croatian law matters related to the transaction, we provided the sellers and the target’s team with support in all stages of the transaction and coordinated a number of preparatory activities to set up the required structure prior to the transaction, leading up to its successful completion.

CEELM: How did you land the mandate and what do you believe it was about Savoric & Partners that got it for you?

Gasparac: We had the pleasure of working with the Nanobit team and the founders on several previous transactions. A few years ago, they recognized the excellent track record and reputation our firm has on the Croatian M&A market and decided to engage us as legal advisors on a potential transaction. We established a good relationship with the client over a couple of years and lived up to the trust they placed in us on previous assignments, so I believe we made it easy for them to go with our firm once again, on this important transaction. It was a real pleasure to team up with Nanobit again, on this deal.

CEELM: What was the most difficult part of this deal and how did you/your team circumvent it?

Savoric: One of the main challenges of this deal was the cross-border nature of the transaction and the fact that the consideration partially consisted of Stillfront shares listed in Sweden. Therefore, for us as the sellers’ counsel, it was important to ensure that all the relevant factors, across a number of jurisdictions, are taken into account, to protect the sellers’ interests and set up adequate mechanisms ensuring that they receive the relevant parts of the consideration simultaneously with the share transfer.

Gasparac: In addition, within the transaction, several key employees also sold their shares to the purchaser. A number of preparatory actions needed to take place to set up the required structure prior to the transaction, which presented a challenge considering the ambitious timeline within which the transaction had to be executed.

The timeline was generally one of the main challenges in the transaction since it was driven by the purchaser’s disclosure requirements, so we had very little flexibility on the timing side. Considering that the transaction included several simultaneous workstreams (e.g. negotiating the SPA, the Shareholders’ Agreement, arranging W&I insurance, etc.), all teams needed to work hard to make everything happen within the planned timeline.

All challenges were circumvented thanks to the dedication and attention to detail of all teams involved in the transaction, including the sellers and the target’s team, as well as Latham & Watkins, the seller’s English counsel. Everyone was focused on getting the deal across the line as swiftly as possible and was always ready to go the extra mile to make sure that we put in place a structure that would allow all parties in the transaction to achieve their main objectives.

CEELM: In contrast, what, from your perspective, went particularly smoothly and what do you believe contributed to it?

Gasparac: I would say that the entire transaction, in general, went rather smoothly, especially when it mattered the most, around signing and closing. As previously mentioned, we believe that the effort put in by both the sellers’ and purchaser’s teams and advisors contributed greatly to that, as everyone was determined to make the transaction happen as smoothly as possible.

CEELM: Looking back at the whole process, would you do anything differently if you had a second go at it?

Gasparac: Nothing comes to mind at this moment, we are very happy with the way that the entire transaction went, and we believe the client is satisfied as well. As in every deal, there are always moments when the timing gets a little bit tight and the transaction gets somewhat tense, but this is always the case, and I am afraid it is unlikely to change anytime soon.

CEELM: In your view, what is the significance of this deal for the Croatian market? Why do you believe the judges voted for this deal over the others?

Gasparac: The first thing that sets this transaction apart from most other transactions on the Croatian market is its value of around HRK 1 billion in total, which is quite significant for the local market. In addition, as one of the largest Croatian deals in recent years, it put Croatian gaming and IT companies on the map and demonstrated that there are excellent investment opportunities available for reputable international companies such as Stillfront.

Savoric: In addition to that, the cross-border nature of the transaction, with various work streams across several jurisdictions taken care of by different teams, added another layer of complexity to it, making it a very significant deal on the market.

CEELM: Can we look forward to future similar deals (size/industry/target/etc)? Why/why not?

Gasparac: I believe we absolutely can. The Croatian M&A market is very active at the moment, especially in the IT industry, and our team worked on several other important deals advising founders/sellers of IT companies within a few months after the completion of this transaction. It is evident that there is an entire generation of Croatian high-growth IT companies attracting the interest of foreign investors, so it seems very likely that the trend of high-profile transactions in the IT industry will continue in the coming years.

This Article was originally published in Issue 8.7 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Croatian Knowledge Partner

Čipčić-Bragadin Mesić & Associates is one of the leading law firms in Croatia that serve companies, credit & financial institutions and public entities. We have been recommended and recognized as the legal experts and service leaders by many leading international legal guides for more than 15 consecutive years. With roots dating from 1928. we now probably have more tradition, experience and market presence than almost any other law firm in Croatia. We work closely with the leading international law firms and consultants so we’re able to manage complex, cross-border projects and deals seamlessly and successfully. Around 85% of our clients are international enterprises doing business in Croatia. List of our clients include some of the world-renowned companies such as Amazon Europe Core, China Machinery Engineering Corporation, Tate & Lyle, Nafta a.s., Unilever Croatia, Unilever Hungary, Lenovo, Innoenergy CE, Flixmobility, Flixbus CEE South, Okoenergie Group, CTC Holding, Bunge Limited, Chipita, Rolls-Royce, Canvas Holidays, Vacalianselect, Redgate Software, Red gate Investment, Yahoo!, Aston Martin Lagonda, Domino Printing UK, Domino Printing Sciences, Goldman Sachs, Deutsche Bank, Barclays Bank, HSBC, State Street Bank, Citigroup Global Markets, Credit Suisse, Bank of America Merill Lynch, Standard Chartered, Och-Ziff Capital Management, Amundi Asset Management, Altima International, Red Arc Global Investments, SMBC Nikko Capital Partners, Royal Bank of Scotland, Morgan Stanley International, J.P. Morgan group, Allianz Global Investors, Schroders, Macquarie Bank, Digital Finance International, Winton Capital Management, Citibank, Invesco Asset Management Österreich, Croatian Pension Investment Company, Unicredit Bank AG etc. We enjoy learning about our clients’ businesses and want to understand them completely so we can provide the best possible and complete service.

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