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Trustee and Monitoring Services
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.
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Trends
The year 2021 was a strong one for worldwide merger and acquisition activity with year-end results significantly surpassing the levels achieved in recent years. The value of 2021 transactions was nearly 40 percent higher than the previous year, coming in at $5.85 trillion. The 2021 results were somewhat driven by pent up demand from 2020 due to the pandemic and featured a number of megadeals. Technology was particularly active with Microsoft, Amazon and Alphabet all going on buying sprees. Logistics also experienced major consolidation with the US$30 billion acquisition of KCS by Canadian National Railway, as did communication with the US$26 billion acquisition of Shaw Communication by Rogers Communication.
Pre-merger notifications filed under Hart-Scott-Rodino with the Department of Justice and the Federal Trade Commission during fiscal year 2020, the most recent year with available data, showed a decrease from 2019 levels, dropping from 2089 filings to 1637, a decrease of approximately 21 percent. During the year, the Commission brought 28 merger enforcement challenges, the highest number of FTC merger enforcement actions in a single year since fiscal year 2001. Ten of these matters resulted in a final consent order requiring divestitures, and another eleven were abandoned or restructured as a result of antitrust concerns uncovered during investigations. The Commission also initiated litigation to block or undo seven acquisitions, halting unlawful mergers in numerous sectors of the economy, including consumer goods and services, pharmaceuticals, healthcare, high tech and industrial goods, and energy.
During the year, the Antitrust Division challenged 15 merger transactions. The Division resolved seven 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 eight challenges, the parties abandoned the transaction in four cases; in the ones remaining 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 49 percent of the reported transactions involving the two agencies were valued at more than $500 million. Additionally, more than 48 percent of the acquiring entities had annal sales of more than one billion dollars.
With strong overall M&A activity anticipated for 2022, 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 2022, the size and complexity of these deals will result in continued close scrutiny.
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