Corporate: 2022 Year in Review

As we come to the end of another busy year that has again presented us all with some unexpected challenges, our National Corporate team reflects on significant achievements, developments and industry trends and looks forward to what the year ahead may have in store.

“The rationale for consolidation and aggregation of businesses through M&A activity continues into 2023 but is now driven by the need for efficiencies of scale and costs management.  Changes to the business environment will create more opportunities for companies with an eye on opportunities.  A key factor in maximising the returns form these opportunities will be effective assessment and management of risk, including through being aware of, and complying with, an increasingly complex regulatory regime.”

James Dickson – Practice Team leader

“As we look back at 2022 and forward to 2023, companies face the headwinds of the end of unrealistically cheap money, a tight labour market and higher costs.  Rising interest rates and prices will keep pressure on consumers and demand for non-essential items.  Can the economy be managed to rein in inflation whilst not sinking into recession? Past history suggests this is difficult to achieve.  Clients who will succeed in the year ahead must plan for these challenges and be ready to take opportunities as they arise.”

James Macdonald – Practice Team Leader

Industry insights 

In 2022, we saw substantial regulatory change to corporate organisations, spanning across a variety of industries. Rising interest rates and higher prices began to have a significant impact, with consumer discretionary products seeing softening in demand in the second half of the year.  The economy remains on a knife edge with the fight to reduce inflation, higher energy prices and global conflict remaining major issues.

Added to these macro issues, cyber attacks continue to rise in frequency and severity.  The Optus and Medibank breaches have prompted the Commonwealth Government to act and significantly higher penalties for such breaches are on the way. A company’s very existence may now be in the hands of its firewalls, IT systems and staff and the retention of data- once seen as the holy grail for AI to mine, may turn out to be a significant liability.

A further concern for many companies this year was increasing ESG regulation, and how they would meet the associated obligations. In March, the ACCC listed environmental claims and sustainability, including greenwashing, as one of their 2022-23 priorities. This was followed by ASIC’s  Chair – Joe Longo – discussing the rising scrutiny on greenwashing claims at the AICD Australian Governance Summit. The ACCC Deputy Chair – Delia Rickard – emphasised that enforcement action would be taken where consumers are misled or deceived by ‘green’ claims at the Sydney Morning Herald Sustainability Summit. Greenwashing, in particular, was evidently on a number of regulators’ – and by extension, companies’ – radars. To minimise the risk of further scrutiny, we encouraged businesses to use clear and concise language, be able to evidence any claims they make and ultimately, be transparent with their consumers.

In addition to greenwashing, the ACCC also targeted deceptive advertising and market practices in the digital economy. The regulator specifically focused on accuracy of statements influencing purchase decisions, the approach to displaying prices on websites and the substantiation of factual claims. Airbnb had proceedings brought against them in the Federal Court for allegedly misleading consumers about their accommodation pricing. Similarly, Samsung was fined $14 million by the Federal Court for misleading consumers about the capability of the Samsung Galaxy smartphone being submerged in pool or seawater. Finally, online clothing retailer Tiger Mist paid penalties after they allegedly mislead consumers on their rights to return faulty items.  We see this focus on ensuring consumer safety in the digital economy continuing into 2023, as these decisions serve as an important reminder about the truth in advertising.

It was bad news for foreign investors in July, as Treasurer Jim Chalmers announced changes to foreign investment fees for those acquiring assets in Australia. These changes will form an estimated $455 million in Foreign Investment Review Board (FIRB) fees alone over the next four years. Despite the increase in fees, foreign investment is still encouraged by the Australian Government – whilst we do not foresee this impacting heavily on larger transactions, we are yet to see how this fee adjustment will effect small and mid-sized deals.

One of the most anticipated decisions this year was that of Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278, which saw claims of legal professional privilege being used by multidisciplinary practices to shield documents from being produced under ATO audits. This decision was factually complex, and showed that it does not matter how confidential the information included within communications are, if another equally important purpose is raised outside the scope of legal advice, it will not be privileged. Accordingly, we encourage companies to review their engagement documentation and ensure it is clear and well-structured, especially if they deal with MDPs.

We saw the long-awaited Corporations Amendment (Meetings and Documents) Bill 2021 (Corporations Amendment Bill) passed by the Senate in early February, which enables companies and registered schemes to use technology to conduct virtual and/or hybrid meetings and distribute meeting-related materials, and electronically sign documents under section 127 of the Corporations Act 2001 (Cth). These changes to the Act apply to documents sent and meetings held on or after 1 April 2022 (when the temporary relief measures expire) and documents executed on or after the day after Royal Assent.

In 2022, we saw Director IDs come into effect, which ensures each individual director has a unique and registered identification with the Australian Business Registry Services (ABRS). The introduction of mandatory IDs are a result of the ATO seeking to minimise fraudulent identities, encourage further accountability, and mitigate any director involvement in unlawful activities. The enforcement of the mandatory IDs will be managed by ASIC.  Directors were required to obtain Director ID numbers by 30 November and a short term reprieve was announced at the 11^th hour on 30 November 2022, giving an extra 14 days for directors to apply for their ID number to avoid being penalised.

In 2023, we expect to see companies in the life sciences industry affected as the ‘Code of Best Practice for Reporting by Life Science Companies’ – written by ASC, AusBiotech and other key industry participants – is updated. With one of the larger concerns for life sciences companies centring around their continuous disclosure obligations, this update will promote informed and engaged investors and ultimately assist the Board of Directors in managing any non-compliance risk.

Team movements

The team celebrated the promotion of Ella Price (Associate, Adelaide) in January and the admission of Francesca Lombardo (Lawyer, Sydney) in May 2022.

We welcomed George Halikiotis (Principal) and Wendy Gao (Lawyer) in our Sydney office, Grace Hooper (Lawyer) in our Brisbane office and Spike Woods (Lawyer) in our Melbourne office.

Significant matters

Throughout the year, we continued to represent and advise our clients across various industries in a number of transactions, including the following most recent deals:

People’s Choice Credit Union
Advising People’s Choice Credit Union on its merger with Heritage Bank, with the new organisation to become the biggest mutual bank in Australia.

Friesian
Advised Friesian on the acquisition of the farm milk collection business of Peter Stoitse Transport which sees McColl’s significantly increase its fleet of farm milk collection vehicles and drivers.

Epiroc
Advised Epiroc on its acquisition of an Australian-based global provider of digital geological imaging solutions to mining companies, Geoscan and its acquisition of Remote Control Technologies, a leading global provider of automation, information and protection system solutions in the mining industry.

Rover Coaches
Acted for the Lewis family on the sale of Rover Coaches to the Buslines Group in New South Wales.

Duxton Group
Advised the hotels and hospitality arm of investment manager, Duxton, on the acquisition of an independent craft brewer, Little Bang Brewing, from its founders in a cash and scip deal as a part of the expansion of Duxton Pubs’ rapidly growing portfolio.

AMSL Innovations Pty Ltd
Advised AMSL Innovations Pty Ltd on its Series B equity funding round, as the company continues to develop its “Vertiia” electric vertical take-off and landing aircraft.

Normet Group Oy
Advised Normet Group Oy on its acquisition of a leading Australian manufacturer and supplier of ground support products for the mining and civil industries, Garock Pty Ltd.

Carlisle Health
Advised long-standing client, Carlisle Health Pty Ltd on its recent acquisition of the Bundaberg Radiology Group, comprising multiple radiology businesses located in Queensland and New South Wales.

Cowes Bay Group
Advised the Cowes Bay Group generally on the acquisition of substantially all the business and assets of Armstrong Flooring Pty Ltd, a manufacturer and distributor of resilient flooring products in Australia and New Zealand, as part of a court-supervised auction and Chapter 11 bankruptcy proceeding relating to Armstrong Flooring Pty Ltd’s US parent.

Log Creek Pty Ltd
Advised Log Creek Pty Ltd, the majority shareholder of Infrastructure Capital Holdings Pty Ltd (ICH), on the sale of 100% of the shares in ICH to a wholly owned subsidiary of London Stock Exchange listed Foresight Group Holdings Limited.

Corporate Carbon Group
Advised Corporate Carbon Group Pty Ltd and its wholly owned subsidiary, AspiraDAC Pty Ltd, on securing funding from Stripe Inc. for Australia’s first commercial solar-powered direct air capture (DAC) project. We have also advised Corporate Carbon Group on the acquisition of several pastoral properties where financing has in part been secured on future issues of ACCUs – a first for financing in the Australian market.

Bendigo and Adelaide Bank
Advised Bendigo and Adelaide Bank Limited (ASX: BEN) on its entering into a sale and purchase agreement with Australia and New Zealand Banking Group Limited (ASX: ANZ), pursuant to which BEN will acquire ANZ’s margin lending portfolio, which has a portfolio value of approximately $715 million with approximately 11,900 customer facilities.

Duffy’s City Buses
Advised the Duffy family on the sale of their Bundaberg bus transportation business in Queensland known as Duffy’s City Buses to Kinetic.

Recognition

This year, we have achieved outstanding recognition – both for the team and our individuals – across our national corporate practice team. We are grateful for our clients and colleagues and are looking forward to another successful year in 2023.

The Legal 500 Asia Pacific

In the 2022 edition of The Legal 500 Asia Pacific, Piper Alderman was recognised across 12 areas of law including Corporate and M&A. Our partners were highlighted as recommended lawyers for this category, including Lis Boyce, James Dickson and James Macdonald.

The Best Lawyers in Australia

In the 2023 edition of The Best Lawyers in Australia, 52 of Piper Alderman’s lawyers are recognised across 42 legal areas including the following partners in our corporate team:

• Lis Boyce – Life Sciences Practice
• Michael Coker – Corporate/Governance Practice / Mergers & Acquisition Law
• James Dickson – Commercial Law / Corporate Law / Mergers and Acquisitions Law
• Peter Dwyer – Commercial Law
• Greg English – Commercial Law
• Will Fennell – Tax Law
• Sebastian Greene – Corporate Law
• James Macdonald – Commercial Law / Corporate / Governance Practice / Mergers and Acquisitions Law / Venture Capital Law
• Wally McDonald – Corporate Law / Government Practice / Mergers and Acquisitions Law
• Andrew Rankin – Commercial Law / Competition Law / Corporate Law / Corporate/Governance Practice / Mergers and Acquisitions Law
• Hugh Scales – Corporate Law
• Simon Venus – Agriculture and Rural Affairs / Commercial Law / Corporate Law / Mergers and Acquisitions Law
• Mark Williamson – Corporate Law / Equity Capital Markets Law / Mergers and Acquisitions Law / Private Equity Law / Venture Capital Law
• Bahar Agar – Mergers and Acquisitions Law – Ones to Watch
• James Hill – Commercial Law – Ones to Watch
• Liberty Privopoulos – Commercial Law – Ones to Watch
• Adela Sajevic – Commercial Law – Ones to Watch

We were also delighted to receive some very kind feedback from clients and contacts during the research process for the legal directories, including:

“Very commercial and pragmatic. More like advisers with a legal lens than pure lawyers.” (Legal 500 Asia-Pacific, 2022)

“Knowledgeable and hands-on.” (Legal 500 Asia-Pacific, 2022)

“Big enough to have deep niche expertise but small enough to provide personal service.” (Legal 500 Asia-Pacific, 2022)

“Very extensive experience in the Resources sector and has a deep understanding of the critical issues. This is especially important with the legal construction of joint venture agreements and ensuring one’s interests are protected.” (Legal 500 Asia-Pacific, 2022)

“Reliable and efficient. They are well versed in the area and often come up with inventive and intelligent solutions. They are timely with all advice and often complete work before the required time.” (Legal 500 Asia-Pacific, 2022)

“Intelligent, personable and reliable. They go above and beyond to service their client’s needs.”(Legal 500 Asia-Pacific, 2022)

Business Development

The Corporate team produced and published a number of timely insights while partaking in a multitude of client and industry facing events, sponsorships, and partnerships. Our team was also involved in producing some memorable content for clients and have a fantastic line-up of content for 2023 in the works.

Throughout the year, the team delivered a number of webinars for our clients including Getting the deal done: Professional skills in M & A; How to IPO in a volatile market and Crisis Management – When it hits the fan… responding to a crisis (available now on-demand) and delivered in-person roundtables on continuous disclosure obligations.

Corporate partners Lis Boyce and Andrew Rankin also joined with Joshua Annese, Andrea Beatty and Craig Subocz to co-author the Australian chapter of Lexology’s Getting the Deal Through – Data Protection and Privacy, 2023 edition.