R. Shermer & Company
Trustee and Monitoring Services

Post Office Box 294199
Lewisville, Texas 75029
Telephone: 214 668 0294

E-mail: dshermer@rshermer.com

R. Shermer & Company specializes in providing services for companies undergoing transitions  through mergers, acquisitions, and divestitures.  Members of our professional staff have more than twenty years experience in performing the roles of Interim Monitor, Monitor and Held Separate Trustee - having served this role in a number of regulatory agency-mandated transactions in both the United States and Europe.  Our approach is based on a proven methodology that has been successful with some of the largest industrial companies in the world, one that truly involves those most effected in the transition - the employees and their leadership.  These appointments have included:
  • Monitor of the divestiture of all assets associated with a medical device used in conjunction with dialysis treatments, including intellectual property, patents, and customer lists.  Through a Transition Services and a Product Supply Agreement, the buyer has a multi-year window to establish its own manufacturing capabilities.
  • Monitor the forced divestiture of a global cancer fighting microsphere product and all associated intellectual property, business information, customer lists, and pricing information
  • Trustee for a Held Separate Business consisting of a portfolio of marketing, refining and distribution assets, monitoring the divestiture of 65 retail units.
  • Monitored the compliance of a major healthcare organization regarding the company’s interaction with more than 300 customers to assure that barriers to entry for new competitors were eliminated.
  • Monitored the maintenance, divestiture and transition of 68 convenience stores, as the result of the merger of two major energy companies.
  • Completed four separate monitoring engagements involving the forced divestiture of hundreds of medical clinics, monitoring the transition of patients, protocols, physicians, physical assets, employees, and information systems, assuring that the clinics were maintained and viable. 
  • Trustee for a group of "crown jewel" assets, monitoring operational and financial performance to assure competitiveness is maintained.
  • Trustee for a global industrial products business being divested, monitoring the transition of physical assets, customers, suppliers, and intellectual property to the acquirer.
  • Interim Monitor performing a fact finding role during the period in which the purchase agreement and transition services agreements were being drafted.
  • Monitor for the mandated divestiture of a pharmaceutical data services provider that had been acquired approximately four years earlier.  The business line’s primary product was used by health care professionals to provide patients with advice on drugs, both prescription and over the counter.
  • As a result of major healthcare merger, assured that a divested Ambulatory Surgery Center was well maintained and received appropriate support services during the transition of ownership.
  • Monitor for the forced divestiture of a medical practice that had been acquired by and integrated into a large, regional healthcare system.

Trends

Although 2019 was a strong year for worldwide merger and acquisition activity, year-end results did not surpass the levels achieved in 2018.  The value of 2019 transactions was slightly lower than that recorded the previous year, a decrease of .5 percent from $4.11 trillion to $4.09 trillion.  None the less, 2019 still ranked as the third strongest year for global M&A since 1980.  The 2019 results were largely driven by the 34 megadeals1 announced in the United States in 2019, such as Bristol-Myers Squibb Co’s $96.8 billion acquisition of Celgene Corp, the largest deal of 2019.  This represented the highest mega deal count since 2015 and the second highest of all time.  The U.S., which remained the top location for merger deals, saw deal activity rise by 6%, whereas deal activity fell by 25% in Europe and 14% in the Asia-Pacific region.  By industry, healthcare led the way, with more than $500 billion worth of deal activity, followed by the tech and the energy and power sectors.

Pre-merger notifications filed under Hart-Scott-Rodino with the Department of Justice and the Federal Trade Commission during fiscal year 2019 showed a slight decrease from 2018 levels, dropping from 2111 filings to 2089, an decrease of approximately one percent.  During the year, the Commission brought 21 merger enforcement challenges: ten in which it issued final consent orders after a public comment period; nine in which the transaction was abandoned or restructured as a result of antitrust concerns raised during the investigation; and two in which the Commission initiated administrative or federal court litigation.  During the year, the Antitrust Division challenged 17 merger transactions. The Division resolved eight of these cases by filing a complaint and proposed settlement simultaneously in U.S. district court and brought suit to enjoin three transactions.  Of the remaining six challenges, the parties abandoned the transaction in five cases; in the other one the parties addressed and resolved the Division’s concerns.  The strategic level of many of these transactions is underscored by the fact that more than 36 percent of the reported transactions involving the two agencies were valued at more than $500 million.  Additionally, more than 47 percent of the acquiring entities had annal sales  of more than one billion dollars. 

With strong overall M&A activity anticipated for 2020, the mergers that are consummated will continue to be extremely large and strategic.  Many of these mergers will be focused on combining global firms within one industry, as has been taking place in pharmaceuticals, healthcare and energy.  The strategic nature of these mergers or acquisitions will lead to more megadeals, many of which will face structural remedies imposed by regulators.  In 2020, the size and complexity of these deals will result in continued close scrutiny.



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