Despite some reversals and the stress of a turbulent merger, Saira Zaki finds CMS Cameron McKenna’s corporate practice holding its own
CMS Cameron McKenna has had its fair share of bad press. In the past two years alone the firm has been slammed for claims of harassment, low profitability, partner losses and the bruising integration of McKenna & Co and Cameron Markby Hewitt, following its 1997 merger.
And yet as one rival points out: “The quality of the partners is better than the brand.” And an analysis of the firm’s corporate practice shows the firm is at least holding it own, particularly on cross-border M&A work.
Indeed, Camerons is one of the few mid-ranking corporate teams that is more impressive on international than domestic work. This valuable trait is backed up by the firm’s sector profile in energy and biotech work, not to mention the strength of its well-known real estate team and its low profile but active private equity practice.
During the past few years the firm has had its fair share of chunky deals helping to contribute to record gains announced last month, with average partner profits rising 24% to £421,000.
The firm’s headline work includes advising National Group on its £6.1bn acquisition of Niagara Mohawk Holdings and advising ABN Amro Bank on its £1.9bn acquisition of Michigan National.
Unsurprisingly, energy giant National Grid is the firm’s biggest client in corporate. If there is one thing Camerons did get right it was to build up in the sector and with some considerable success. The firm is also well known for its healthcare and biotech practice. A sector analysis of the firm shows Camerons has also built a reputation in other areas such as leisure.
It was Camerons that beat off strong competition to advise Nomura on its £1.1bn bid for Meridien Hotels – the largest hotel auction in history and a benchmark instruction for the firm. Camerons also acted for Enterprise Inns, closing two deals for the client worth £524m in the first half of this year.
Sean Watson is the corporate partner in charge of Enterprise Inns and he is widely regarded in the market as one of the firm’s star partners.
Empirical evidence backs up market perception. Watson tops the individual tables for M&A deals at the firm by value during the last 12 months, according to Mergermarket.com. He advised on three deals worth £6.6bn – including the National Grid deal. Partners Gary Green and Louise Wallace follow Watson in second and third place respectively, while Green advised on seven deals, the highest number of any partner in the group.
But although Camerons has a small list of blue chip clients for which it acts as primary adviser, there is a massive gap between Camerons’ profile as lead counsel to Ftse 100/250 companies when compared with the so-called ‘club of eight’ City law firms.
Other major clients include Lloyds TSB, Investec Group and National Australia Bank, but the firm is not principal corporate adviser to any of these businesses.
Camerons’ head of corporate, Guy Billington, admits that the firm has much scope to raise its profile as a player in quality domestic M&A work. Still, the firm performed better than many rivals in the European league tables this first half of the year, beating Simmons & Simmons, Eversheds, Gouldens and Rowe & Maw, with 24 ranked deals worth £3.5bn. And although Macfarlanes beat Camerons, coming seventh with deals worth £20bn, Camerons closed five more deals.
The reason for Camerons’ strong deal flow is more down to its broad church private equity practice, which is well placed to cross-sell both the firm’s property practice for mature buy-out work and biotech experience on early stage funding, than its mainstream corporate finance department.
The private equity practice, headed by Andrew Sheach, consists of seven partners and 18 other fee earners and advises a range of houses including Elderstreet Capital Partners, Dresdner Kleinwort Benson Private Equity, Legal & General Ventures and Bridgepoint Capital.
The team rarely appears on top quartile buy-out work, but ranked deals average around £100m. MBOs the firm has worked on the last two years include the sale of Golden Wonder Holdings for £156.5m and the £165m take-private of The Ambishus Pub Company. And in the last 12 months the private equity practice has picked up a number of new clients too. More recently these have included ABN Amro Private Equity Europe and Cazenove Private Equity.
Other new Camerons clients in the last year include Billiton, Choice Hotels and Bristol & West. The firm is also now advising Consignia, GeneMedix and TransXenoGen on corporate work.
Clients have been impressed by the firm’s international connections – the seven-member CMS network has brought a capability to advise in Germany, France, Austria and Switzerland, among others.
It was this network that persuaded Nomura to go with the firm on the Meridien deal. The legal work spanned 22 jurisdictions and involved every single European CMS member. Integration of the alliance, however, is still a long way off. Billington says the firm has a “five-year plan”, although insiders believe the firm aims for sooner than that. The alliance has yet to secure a presence in Italy or Spain.
