Interview with Mirosław Fiałek published on 7 December 2022 at Legal Business Polska www.legalbusiness.pl (originally in Polish).
Almost 50 projects worth more than PLN 4 billion. We talk about MFW Fiałek's intensive year with its managing partner Mirosław Fiałek
Advising the Norwegian fund Orkla on its acquisition of the Da Grasso pizzeria chain, representing Tar Heel Capital in its investment in SmakMak, working on a major merger of language schools or representing the South African fund Vantage Capital on its investment in educational institutions. The last few months have been very busy for MFW Fiałek. How does a boutique law firm acquire such significant projects? Is this the last flurry of transactions before the onset of the economic downturn? These are only some of the topics we discuss with MFW Fiałek’s managing partner Mirosław Fiałek.
MFW Fiałek has recently closed a series of significant M&A transactions. Has it been the last period of prosperity before the recession? Or maybe the economic crisis will result in many acquisitions and thus interesting projects?
Indeed, the most recent months have been quite intense. However, we are not slowing down and will soon be able to announce more closed transactions. December is a good time for looking back at the year going by. 2021 was very busy for us, but we already know that our statistics for 2022 will be record-breaking. Since January we have worked on almost 50 projects with a total value of more than PLN 4 billion. Almost half of these transactions will be worth more than PLN 100 million.
2022 has been exceptional for us in terms of winning new clients and new projects. We find the significantly larger share of cross-border projects to be of particular importance. An increasing proportion of our clients are foreign private equity funds and international strategic investors investing in Poland.
Our current workload is heavy and we will close 2022 with excellent dynamics. However, we are slowly beginning to hear the investors' predictions of the lurking slowdown. One reason for this may be that the Polish private equity funds find raising new funds for investments increasingly difficult. This is likely to affect their activity next year and the year after. On the other hand, it may be a good time for the strategic investors with long-term perspective and, at the same time, better knowledge of the market segment in which they operate. Therefore - provided they are able to finance their acquisitions - they may be able to successfully close mergers and acquisitions with the rising inflation or economic downturn easier than the financial investors.
The most recent transactions on which MFW Fiałek has advised are not only interesting but also high-value projects, incuding with an international aspect i.e. the best-suited transactions for large Polish or network law firms. Why did clients choose you, a Polish boutique law firm?
We are a specialised transactional law firm, which means that we focus on transactional projects. We work with a large part of the Polish private equity market and with transactional advisors. Our transactional team is often larger than the team with the same specialism in a Polish office of a medium-sized international law firm. We have a high level of competence and very broad transactional experience. We work like the network law firms that often represent our transactional counterparties. We attach a lot of importance to the quality of documents, standard form precedents, team training and the standards of our work. We also emphasise punctuality, skilful project management and goal orientation. However, we differ in the details that our clients largely appreciate. An example of such a difference is our law firm’s simple structure allowing our clients to contact me and the other team members quickly and directly which in turn ensures the smooth execution of their transactions. Our clients value us for our high responsiveness, effective communication and pragmatic approach. We work intensely and efficiently, which is why we are happy that the clients who come back to us are companies such as Orkla or Culligan, and we have a stable relationship with the funds operating in Poland. We can hear their comments and suggestions and, if necessary, we make the appropriate changes on an ongoing basis.
We believe that our success is driven by the internal development of our law firm. Our advantages are our developed internal standards and our experienced and highly competent team. A team that is also simply cool and well-integrated, which translates into excellent client relationships and successful transactions.
How does a local Polish boutique law firm win large and international clients?
The fact that we advise large and international clients is of course a result of numerous factors. Undoubtedly one of the most important of them is that I have been involved in M&A for more than 20 years, so my contact network is extensive. Client and peer recommendations are very important; satisfied clients recommend us to others. Interestingly, we very often receive recommendations from Polish entrepreneurs who sold their companies with our involvement. We appreciate it when clients come back to us with further instructions, we have closed at least several transactions for many of them. It also happens that the other party to the transaction, having witnessed our work on a particular project, after some time turns to us for advice on their next transaction.
With every project we successfully close we become increasingly recognised as the major transactional advisors. Working on large transactions has strengthened our market position. Clients also note that we are recognised in rankings or legal competitions e.g. recently by The European Lawyer Awards in the category of European Specialist Law Firm of The Year, the Polish Private Equity and Venture Capital Association, Chambers Europe or IFLR1000.
Yet another important factor in attracting new clients, including the large and international ones, is our proactive attitude. We undertake numerous business development activities and are involved in connecting potential investors with companies. We try to help our clients in identifying interesting targets. We want to be not only a legal advisor, but above all a business partner to our clients. All these activities and recommendations from foreign law firms make us increasingly often the choice of large and international clients.
What in your opinion are the largest obstacles to the fast and effective closing of the M&A transactions? By obstacles we mean both regulatory and business issues.
Many factors influence the smooth and successful closing of a given transaction. In our experience the regulations do not make it difficult to close an acquisition or sale of a company. Of course, if a problem arises in the course of a transaction and it must be investigated and a solution needs to be found then all the extra work takes time and can affect the timing. However, this kind of extra work can be foreseen and arranged accordingly. A bigger problem, on the other hand, is the volatility of the market and valuations and the overall environmental instability. Geographical location and geopolitical uncertainty can also present challenges.
Each M&A transaction offers an opportunity for growth, but also poses a major risk for its participants. It is therefore crucial that it is properly thought out and planned. Obstacles arise when the target is not duly prepared for the transaction, appropriate financial information or internal documentation is missing or when a timetable is not available. The involvement of the experienced legal advisers enables appropriate solutions to be found and the transaction to be successfully closed. On the other hand, when legal advisers do not have the necessary transactional experience, it is usually a source of trouble.
It happens that our role as an adviser is to help our clients understand the entire transactional process. It is then important to demonstrate the importance of organisation, timing or the target being ready for the transaction. We explain in such events what the consequences of not being properly organised may be. Sometimes it is necessary to understand that if a transaction is not successfully closed within a certain timeframe, it may not be closed at all or will have to be closed in another time and with a different investor. Thanks to our competence and experience, we are able to quickly identify any potential difficulties and support our clients in closing their transactions as favourably as possible.