The world’s largest law firm, DLA Piper, which employs 4,200 attorneys in 77 offices in 31 countries, has been working discreetly in Israel for several years. Sources inform "Globes" that the firm has been active in Israel for about four years and that it has been involved in and represented some of the largest recent deals conducted by Israeli companies.
The firm provided consulting to Menora Mivtachim in its acquisition of VBG’s income-producing real estate portfolio, which includes four office buildings in Germany, valued at €84.9 million. It has represented Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) in what is estimated to be a multimillion dollar project to finance the construction of a 30-story dormitory building for Pace University in Manhattan. It has represented Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) in a joint venture with Harbor Group for the acquisition of a commercial center in Las Vegas at a cost of $27.9 million, and also represented Migdal in a joint venture with Harbor Group to acquire the CNN building in Washington for $107 million.
Other deals handled by this huge firm include representing Fortissimo Capital in the acquisition of Starhome from Comverse Technology Inc. (Nasdaq: CMVT), at a value of $80 million. It also represented LycoRed in the acquisition of the Ukrainian company, Vitan (manufacturer of raw materials used in the food industry), as well as Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) in its acquisition of a fabrication facility in Japan from Micron Technology for $140 million, to name but a few.
Adv. Jeremy Lustman, a partner in the firm heads its Israel Practice. He moved to Israel in 2009, has been operating quietly for a number of years, and is now for the first time discussing some of their work in the field.
The situation in Israel does not prevent deals from being made
After four years operating in Israel, what made you decide to open up about your activities in the country to "Globes?
He said, “Four years ago, I was an entrepreneur who moved to Israel and came to get a feel for the new, foreign territory from a business perspective. Up until only a few months ago, foreign law firms had to be extremely careful about how they publicized their activities in Israel, in deference to the local bar rules. Once the Minister of Finance signed an order last summer that sets out guidelines for activity of foreign firms in Israel, it provided a good and natural opportunity for us to discuss our Israel Practice more publicly. Over the past three and a half years, we have been fortunate to have built a large and broad client base, and today we are one of the go-to foreign firms for over 80 local clients, including among the most well-regarded and largest companies in Israel."
He continued, “We are significantly expanding our activity in the Israeli market, and the opportunities here have attracted a growing number of senior partners in the firm throughout the world to visit and explore how the Israel market can connect to their respective practices. For the past few years, I, together with my partner from London, Paul Jayson, have been working to establish and strengthen our relationship with a growing number of Israeli partners. We have been doing this through on the ground relationship building, day-in and day-out, by delivering the highest level of service one project at a time, and by creating or otherwise getting involved in some focused substantive programming, including sponsoring a few select conferences and seminars. We also created a signature breakfast series that meets once every two months or so, which provides a very effective forum for senior partners from our offices around the world to present on topics of interest to the Israeli market and to meet existing and prospective new relationships in Israel.”
Why does a global law firm even need a practice in Israel?
“A law firm like ours needs to be everywhere where companies are engaged in a significant amount of business activity. We believe Israel is an attractive investment target for foreign organizations that we serve abroad. Additionally, Israel is clearly a country with tremendous development potential for partnerships with other markets, as most of the economy here is outbound-focused globally. Israel’s location in the Middle East, on a strategic axis, also makes it an attractive platform to explore opportunities in any part of the world."
“Among our clients in Israel are organizations and companies that have been looking in recent years for new markets in which to invest their capital. As an important example, a growing number of institutional bodies in Israel (particularly insurance companies and pension funds) have become serial investors in foreign real estate (until now, primarily in the US and to some degree, in Europe)."
“In addition, many projects here have some element that requires our guidance, whether a real estate deal in a different country, or an international M&A transaction, which often has foreign law components. We are frequently called on to assist with these issues, either by the companies involved in the project or by their local attorneys or investors, given our knowledge and capabilities within many global markets. My physical presence has also helped us dramatically as clients know I am available to meet with them whenever they need to address their needs abroad."
You are not concerned that the economic situation in Israel may deteriorate?
“The economy around the entire world over the past five years has seen a sharp downward trend in business activity. At the same time, Israel has fared relatively well when compared to other locations and a huge number of companies here are doing business abroad, which creates demand for high-level legal services. One of our distinct advantages is our ability to provide this wide range of capabilities whenever and wherever in the world Israeli companies require our guidance." What about the unstable security situation?
“My impression is that Israelis have learned to live with the complex security situation without letting it substantially impact on business activity. Obviously, if a political resolution is reached, the business sector and general public will thrive, but it is hard to suggest that the current situation is stalling or preventing business, and in some ways, the opposite is true. Because the situation here is often more precarious, Israelis are making the most of each and every moment and always looking to push forward, with their business dealings being no exception."
“In recent years, we have seen a growing number of foreign companies that have decided to acquire Israeli companies or trade with them. In fact, a growing number of foreign funds now operate in Israel and believe in the country’s strength and the many opportunities which exist here. Even during the fighting in the south, there was no major change in business activity given how much is done outside of the country.”
As a Jew, were your motivations to come to Israel also Zionist or was it purely business?
“I feel privileged that I was able to merge my personal interest in exploring the opportunity of living in Israel with my family, with the business objectives of our firm. We identified this market as one where we could potentially conduct a significant amount of business for Israeli companies globally, but operate in a modest way without heavy overhead. The confluence of these opportunities, coupled with the global financial crisis heavily felt in the US a few years back provided a unique and appropriate window for me to test the market on behalf of the firm. At the same time, my family was very excited at the prospect of creating a life for ourselves in Israel given its centrality in our Jewish lives."
"We have been living in Israel for three and a half years now, in the Modi'in area, and we feel very fortunate to be here.”
We enjoy excellent cooperation with all the offices
In his business and legal activity, Lustman has to date worked with 40 different DLA Piper offices in 25 different legal territories, on behalf of Israeli clients. As part of his work, Lustman spends about a third of his time on trips abroad, primarily in the US and more recently in London as well. He just took his first trip to Australia a few months ago (where DLA Piper has five offices) to further explore Australia-Israel opportunities (meeting potential investors and partners who are eager to expand bilateral opportunities and investments between the two countries).
On what areas does your activity in Israel focus?
“We work in three main areas: firstly international real estate, mainly investments in real estate abroad (primarily in the US and Europe), representing large Israeli insurance companies and pension funds. In 2012, we represented Israeli institutional bodies in eight US real estate deals with a total acquisition value of S900 million. Secondly, international M&A - representing a growing number of Israeli companies in their company acquisitions abroad. We offer a significant advantage in this realm, because we have the right sophisticated expertise, but also a true global reach that very few here can offer. We are a bridge not only to the US and Europe, but also to Asia Pacific, Australia, Latin America, and Africa as well, all of which are countries and regions for which many Israeli companies and investors see strong potential investment opportunities or collaborations."
"Thirdly, we are very active in the daily business activities of large established business organizations and mid-stage venture-backed high tech companies in their daily commercial activities throughout the world, including the protection of intellectual property rights, international tax issues, guidance on various commercial agreements, and even local labor law issues for executives around the world."
“You could say that we were very opportunistic in coming into this market. We are here for our clients in Israel whenever and wherever in the world they require our assistance. Due to the combination of our large global breadth, the many areas of expertise offered by our colleagues around the world, and my physical presence on the ground, we truly offer a real global one-stop shop for companies, investors and their local service providers who require the highest level of quality and service overseas.” How were you received by the Israeli firms?
“The truth is that we have always been sensitive about knowing our place vis-à-vis local firms and have always tried to bend over backwards to not infringe on their space. Initially, I had some concerns about the size of the market and the competitive landscape. However, we quickly learned and discovered that there was room for everybody, and we enjoy full and positive cooperation with a number of the top local firms here with whom we work closely and in a very collaborative fashion. We are grateful for the reception we have received here from local firms and look forward to finding additional ways to mutually enhance each other’s practices."
What are your business plans for the near future?
“In the coming years, we will continue to expand our activities and relationships in this market, with the goal of attracting a growing number of Israeli companies, investors and entrepreneurs interested in either establishing a presence or conducting business activities in multiple foreign markets around the world.”
Published by Globes [online], Israel business news - www.globes-online.com - on February 7, 2013
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