Rob J. van Schaik, PartnerIndependent Capital PartnersBV, Amsterdamwww.independentcapital.nlvanschaik@independentcapital.nl+31(0)20 575 2760

Dirk Leermakers, Managing PartnerLoyens Winandy, Luxembourgwww.loyenswinandy.comdirk.leermakers@loyens.com+352 466 230 222

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Rob van Schaik at Independent CapitalPartners, AmsterdamAccording to Rob van Schaik, a partner at IndependentCapital Partners BV in Amsterdam, the M&A deal-making environment in Benelux is very exciting.

“There are a lot of deals going on,” he says. “The highlevels of debt financing seen recently in Europe (up to 9xEBITDA) are not expected to continue and the currentnervousness of capital markets is making the actualclosing of deals a bit more strenuous. The current debtmarkets will have a significant impact on the top tiertransactions, involving high levels of finance. Impact willbe much less for strategic investors/companies as well asfor mid-sized transactions, both used to lower gearing.

That said, we do expect deal activity to continue and itis generally felt that a well-balanced and properlystructured transaction will still be backed by sufficientleverage.

“In general Benelux companies seem to beundervalued given the huge appetite from foreigninvestors. Most transactions currently involve a non-native bidder, an exception being the current acquisitionof ICI by AKZO Nobel.

“In terms of deal size,key markets in theBenelux region includefinancial services (ABN-AMRO Bank), chemicals( A k z o - I C I ) ,pharmaceuticals (Akzo-Organon) and media(Endemol, VNU,W o l t e r s K l u w e r ,ReedElsevier, SBS-ProSiebenSat1) to namea few.

“We recently closed theacquisition of TVproduction company

D&D Media by Palamon Capital Partners - a transactionaimed at procuring significant growth by additionalBenelux and cross-border acquisitions in the comingmonths. The D&D Palamon transaction is an example ofan industry (the European content production sector)with room for consolidation and hence an attractiveplay for value growth for an investor who understandsthese market dynamics. The significance for us is that tobe seen in such a transaction will undoubtedly createadditional business in the same and related mediasectors - one of the industries we focus on.

“At Independent Capital Partners, we boastindependence compared to the various interests ourcolleagues from the corporate finance departments ofbanks are confronted with. Our deal experience andknowledge of certain sectors, especially in the mediasector, is superior to that of smaller M&A boutiques.

“Looking ahead, M&A activity in Benelux will beshaped by a continuation of transactions based onconsolidation factors and shareholder pressure for listedcompanies and is dependent upon developments in thedebt markets.”

Dirk Leermakers atLoyens Winandy,LuxembourgDirk Leermakers ismanaging partner atLoyens Winandy inLuxembourg. He says theM&A deal-makingenvironment in Beneluxis thriving and isincreasingly becoming aprivate equity affair.

“I would tend to saythat deal/investmentactivity in Benelux,especially in

Benelux ReviewAccording to unquote” Private Equity Barometer Q1 2007 PreliminaryData, published by Incisive Media, the Benelux region performedparticularly well in the first three months of the year recording 21deals, a 162% rise on the previous quarter. And in Q2, there has beenmedia coverage relating to high-profile deals including the publicoffer for Stork made by Candover as well as competing offers for ABNAMRO by Barclays and by the Consortium of RBS, Santander andFortis. ACQ asks industry experts for their take on the evolvinglandscape of Benelux M&A. Morag Dickson reports.

Rob van Schaik Dirk Leermakers

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Luxembourg, fairly reflects what is going on in otherglobal markets,” comments the managing partner.“Luxembourg is usually an intermediate jurisdiction in atransaction involving other countries, so what happenselsewhere affects Luxembourg practice. Apart from that,the activity of Luxembourg funds continues to prosper,with the introduction of a new product - the SpecializedInvestment Fund. This comes as part of a series oflegislative changes that have made available a series ofnew ‘products’ over the past three years includingsecuritization vehicles, SICARs and new types of holdingcompanies.

“Loyens Winandy is part of the independent Beneluxlaw firm Loyens & Loeff. Our independence and theequal size of our corporate and tax practices provide uswith an edge, especially in the Luxembourg market. Wemainly act for purchasers in M&A transactions andborrowers in financing transactions, and have recentlybeen involved in deals of all sizes and durations, rangingfrom 20m to several billions.

“In the next 12 months, M&A momentum in Beneluxregion will probably continue apace at a rateapproximating 15%-20% by conservative estimates.Luxembourg practice in its current form is relativelyimmune to sudden short-lived crises in other parts of theworld,” concludes Leermakers.

Roel ter Steeg at Mazars BerenschotCorporate Finance, AmsterdamRoel ter Steeg is a partner at Mazars BerenschotCorporate Finance in Amsterdam. He feels the M&Adeal-making environment in the Benelux is still positive,despite negative signals from the debt markets.

“The recent squeeze on the debt market has had moreimpact on high-profile deals (e.g. Maxeda, Endemol)than on mid-market transactions,” explains ter Steeg.“Still, the number of high-profile deals in theNetherlands, like ABN AMRO and Stork, can easily beexpanded upon with deals like CVC’s and BC Partners’

bid for Univar, Cyrte’stake-private of Endemol,Goldman Sachs andMediacinco, and Akzoacquiring ICI.

“So far in 2007 thereseems to be more high-profile divestments thanhigh-profile acquisitionswith regard to Beneluxparties. Deal volumes andM&A activity levels in themid market remain highand are in line with dealactivity in otherEuropean countries, theUS and Asia due to the

increase in cross-border deals. Strategic buyers fromEurope, the US and Asia remain active in other regions.

“The most obvious difference is between US and UKprivate equity firms in comparison to those on thecontinent. This is the result of a more restricted debtmarket for large buy-outs, which is mainly the playingfield of US and UK PE firms.

“The UK continues to dominate Europe’s M&A market.Following the UK, other countries like Germany, Italy,Spain and France command a substantial slice, althoughthe Benelux M&A market is by far the most open andactive. Many Dutch companies have a distinct focus onand track record in cross-border deals.

“At Mazars Berenschot Corporate Finance, we focusstrongly on six core sectors: business services; ICT;building & construction; industry; medtech; andtelecoms & media. We are a no-nonsense M&Aboutique, with a solid track record in complex corporatefinance situations and a reputation for decisive andresult-driven transactions led by seasoned investmentbankers and M&A advisers. Our sector knowledge isenhanced by our network of associate partners - formerchairmen or members of the executive boards of largecorporations in our core sectors.

“Recent transactions include the divestment of a callcentre division of USG People, the acquisition of BimoBouw by construction group Van Wijnen, the carve-outof Nolan, Norton & Co out of Atos Origin, and Sylis’acquisition of Profinity.

“Looking ahead, we expect a high level of M&Aactivity in the Benelux since general economicconditions still seem very favourable. Companies in theBenelux continue to report high profits and are positiveabout the outlook for the coming year. At the momentthis seems to be of more importance than theuncertainties in the securities markets and the squeezeon debt available for acquisitions. We are confident thatthe dynamics in the M&A market will remain veryinteresting for the next year.”

J e a n - F r a n ç o i sFindling at Noble &S c h e i d e c k e r ,LuxembourgJean-Francois Findling isone of four Partners atNoble & Scheidecker inLuxembourg. Besides thetraditional local andAnglo-Saxons law firms,this independent lawfirm has emerged as oneof the main new playersand now ranks amongthe top ten law firms inthe country. As a partner

Roel ter Steeg, PartnerMazars BerenschotCorporate Finance,Amsterdamwww.mbcf.nlroel.ter.steeg@mbcf.nl+31 6 21234 156

Jean-François Findling,PartnerNoble & Scheidecker,Luxembourgwww.mnks.comfindling@mnks.com+352 26 48 42 35 21

Olga BodisovaHouthoff Buruma NVwww.houthoff.como.bodisova@houthoff.com+31 20 6056441

Marc Kleyr, ManagingPartner Kleyr Collarini GrassoAvocats à la Cour,Luxembourg www.kckg.comkleyr.m@kckg.com+352 22 73 30 30

Pierre HarigaMarshwww.marsh.comPierre.Hariga@marsh.com+32 2 674 97 89

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“Looking ahead, we expect a high level of M&A activity in the Benelux

since general economic conditions still seem very favourable.

Companies in the Benelux continue to report high profits and are positive

about the outlook for the coming year.”

Roel ter Steeg

Roel ter Steeg Jean-François Findling

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in the business with experience in the fields of corporatelaw, private equity and structuring, Findling has a goodoverview of both domestic and cross-border M&Atransactions.

Describing M&A within Luxembourg's local market,Findling says it has been characterised by a lot of activityespecially in the banking sector. “We have been involvedin several deals involving the regrouping of retail andprivate banks, signalling continuing consolidation in thebanking sector. We also acted on a deal in the food sector.Extraneous to this, there have also been a number ofdeals in the real-estate sector but it's a mixed bag really.

“In terms of cross-border activity, levels remain high,with Noble & Scheidecker winning more appointmentsthan ever before. These transactions are generallyworked through Luxembourg SPVs abroad. This isnotably fuelling real-estate deals in Poland andGermany. There is an ever increasing number of dealsstructured through Luxembourg holding companies dueto the favourable legislative regime. We processed adeal involving a US target that was structured through aLuxembourg holding company, for example, and a fund,which is to remain nameless, currently disposing ofcompany in its Luxembourg structure.

“What makes the advisory proposition at Noble &Scheidecker so attractive in Luxembourg is our teamdynamic. We are less compartmentalised and allow ourlawyers to exercise their financial, corporate,employment and IPIT competencies across the dealprocess. It is an approach that we have worked hard tocultivate and clients are pleased with the kind ofadvisory we can leverage in this way.

“This year, there's been more business than usual, evenin the summer months.

Indeed, the market remains remarkably confident.There hasn't been any significant pressure for PE firms torealise their investments. A reduction in deal volume mayhappen in the coming years due to the consolidation ofPE funds and the enterprise value of larger targets, butwe are still largely positive about the coming months.”

Samia Rabia atW i l d g e n ,LuxembourgSamia Rabia is a partnerat Wildgen inL u x e m b o u r g .She says that despitesoundings from certaincommentators, Wildgenremains broadlyenthusiastic about M&Agrowth in the Beneluxregion.

“Although there mayhave been a downturn in

private equity volume in 2006 across Europe as a whole,the first quarter of 2007 more than made up for thiswhen the trend of previous years was re-established.

“Deal/investment activity in the Benelux differs fromglobal markets in certain notable ways. In Luxembourg,the fund industry is going from strength to strength. InJune 2007, the fund industry in Luxembourg had netAUM worth an estimated €2.047bn.

“Second, Luxembourg remains a popular jurisdictionthrough which many investors structure their dealsallowing them to benefit from many of the taxadvantages that Luxembourg still has to offer. Forexample, a low corporate tax rate at under 30% andthe lowest VAT rate in the EU. The latter has provedespecially attractive to non-EU companies that provideservices to customers in the EU. Big players likeAmazon, Skype and AOL have chosen to makeLuxembourg their home.

“Many private equity firms are still taking advantageof the Luxembourg SOPARFI (société de participationfinancière) when structuring their investments. This is acompany fully subject to corporation tax (unlike theHolding 1929) that can benefit from the EU Parent-Subsidiary Directive and from those double-tax treatiesthat Luxembourg has bilaterally concluded.

“In terms of key markets, there is a much greateremphasis on merchandise trading in the Netherlandsand Belgium. In Luxembourg, the financial sector willcontinue to grow together with the traditional steelindustry (accounting for approximately 29% of allLuxembourg’s exports, excluding services). There isstrong belief that the three Benelux countries cancapitalise on their central location in Europe andcontinue to nurture new growth areas whilst continuingto promote their traditional base.

“Wildgen has been involved as Luxembourg counsel ina number of cross-jurisdiction acquisitions focusingparticularly on the purchase of real estate. Theseacquisitions were structured through Luxembourg interalia to take advantage of the flexible legal environmentand fiscal opportunities that Luxembourg presents. TheLuxembourg SOPARFI’s would act either directly as thecompanies that purchased the real estate or as holdingcompanies for those companies that purchased the realestate in a foreign jurisdiction.

“Wildgen has also played a key role in the well-documented Arcelor/Mittal acquisition in which weshould continue to be involved for the foreseeable future.

“From our own experience, we see no reason to bepessimistic about the future. Our own files certainlyshow no sign of stagnation or slowdown. We believethat Luxembourg’s economy will continue to grow asEurope’s number one investment fund centre given theconcentration of specialist service providers and thewide range of investment products available.” ACQ

Samia Rabia, PartnerWildgen, Luxembourgwww.wildgen.lusamia.rabia@wildgen.lu+352 40 49 60 1

Gudo Doeve PricewaterhouseCoopersBelastingadviseurs NV,Amsterdam www.pwc.nlgudo.doeve@nl.pwc.com+31 20 568 4166

Jean Pierre van LeeuweSimmons & Simmons Trentewww.simmons-simmons.comjeanpierre.vanleeuwe@simmons-simmons.com+31 10 404 2513

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“Although there may have been a downturn in private equity volume in

2006 across Europe as a whole, the first quarter of 2007 more than made

up for this when the trend of previous years was re-established.”

Samia Rabia

Samia Rabia

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