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Saturday, January 28, 2023
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Latham, A&O, CMS advise on Karnov´s €160m carved-out acquisition of Thomson Reuters and Wolters Kluwer Legal businesses

Latham & Watkins has advised Karnov Group on its acquisition of carved-out legal information-based businesses of Thomson Reuters in Spain and Wolters Kluwer in Spain, France and Portugal for €160 million, with the sellers counselled by Allen & Overy and CMS Spain

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Karnov Group AB has received clearance from the Spanish Antitrust Authority and, thereby, will complete the acquisition of carved-out legal information-based businesses of both Thomson Reuters in Spain and Wolters Kluwer in Spain, France and Portugal. Completion of the acquisition is expected to take place on 30 November 2022, whereafter, the companies will be consolidated into Karnov’s consolidated financial statements. With respect to the Spanish Market, Karnov has made certain market commitments to the Spanish Antitrust Authority for three years from the closing of the acquisition.

Karnov acquires the entire share capital and voting rights of Wolters Kluwer France S.A.S , Wolters Kluwer Legal & Regulatory España, S.A. and Editorial Aranzadi S.A.U. (Thomson Reuters Spain) and certain subsidiaries and the transfer of certain IP rights for a cash consideration of approximately €160 million on a cash- and debt-free basis. As previously communicated on 9 December 2021, Karnov has agreed on the terms and secured a new bridge loan facility from Nordea Danmark, Filial of Nordea Bank Abp, Finland, in order to finance the transaction.

The acquisition transforms Karnov from one of the leaders in the Nordic markets for legal information services to a European player with a strong market presence in Spain and France, as the Acquired Entities entail some of the very well-known brands within the segments of legal information & reference, workflow & analytics, and training spaces in Spain and France.

Together, the Acquired Entities create a strong player in Spain and France with preliminary unaudited pro forma revenues of approximately €123.2 million combined with an EBITDA of approximately €16.7 million, equivalent to approximately SEK 1,250 million and SEK 170.0 million, respectively, corresponding to an EBITDA margin of 13.6 per cent, for the financial year 2021.

The cross-border, multidisciplinary Latham team that advised Karnov was led by Corporate partners Ignacio Pallarés in Madrid and Alexander Benedetti, and Jean-Luc Juhan in Paris, with Madrid associates Carmen Esteban and Marta Portuondo and Paris associates Roman Nairi, Rim Benzakour and Alex Park. Advice was also provided on Antitrust matters by Madrid partner José María Jiménez-Laiglesia, with associate Carlos Betoret; on Employment matters by Madrid partner Naiara Rodríguez-Escudero, with Madrid associate Guillermo Ruiz de Salazar; on Compliance matters by Madrid associate Leticia Sitges, with Paris associate Agathe Flandre; and on Finance matters by Madrid associate Aitor Errasti. Bruun & Hjejle also advised Karnov on Corporate and M&A matters with partners Andreas Nielsen and Mogens Ebeling.

Allen & Overy advised Thomson Reuters and Wolters Kluwer with a team formed by partner Bosco de Checa, together with associates Alejandra Puig, Enrique Thomas de Carranza y Casilda de las Cuevas.

On the other hand, CMS Spain has advised Thomson Reuters on the pre-competition analysis of the sale of its legal publishing business in Spain (Aranzadi) with the Spanish and French businesses of Wolters Kluwer, as well as on the authorisation procedure before the CNMC for the sale of those businesses, working in the latter phase as advisors to both sellers, Thomson Reuters and Wolters Kluwer. The firm has been working for Thomson Reuters in the negotiations between the two companies since September 2020, providing comprehensive advice on all competition law aspects of the transaction and, in particular, anticipating potential competition issues arising from the combination of these two businesses prior to the final selection of the buyer.

In December 2021, the Swedish group Karnov was selected by the sellers as the buyer and from that moment, the CMS Albiñana & Suárez de Lezo team continued advising not only Thomson Reuters but also Wolters Kluwer, which decided to select the Competition team, led by Carlos Vérgez, as an advisor in the pre-notification and formal notification process before the CNMC (together with the buyer’s advisors). The procedure before the CNMC involved a complex and in-depth investigation, with two market tests and a duration of almost 11 months. It should be noted that this is one of the most relevant transactions in recent years in the field of competition law due to its complexity and the fact that it combines two major players in the market for the provision of legal information services and legal solutions. After this complex and intense procedure, the CNMC authorised the transaction in the first phase with commitments.

Following the approval of the CNMC, the Scandinavian group Karnov, listed on Nasdaq and headquartered in Stockholm (Sweden), will be able to complete the acquisition of the legal information businesses of Thomson Reuters in Spain and Wolters Kluwer in Spain, France and Portugal. The acquisition is expected to close before the end of the year.

Carlos Vérgez, Aida Oviedo y Eduardo Crespo.
 

The CMS Albiñana & Suárez de Lezo advisory team was formed by Carlos Vérgez, Aida Oviedo and Eduardo Crespo. The team also counted on the support of CMS UK partner Brian Sher.

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