Lee & Ko acted as legal advisors for the Carlyle Group in connection with their successful acquisition of TYCO Fire & Security Services Korea Co., Ltd. (“TYCO Korea”) in May 2014 from TYCO INTERNATIONAL plc., the world’s number 1 fire & security specialist business, and in accordance provided expert legal advice to ensure the successful completion of the relevant acquisition financing. The acquisition included the TYCO Korea subsidiaries that mainly handle TYCO Korea’s domestic security services business, specifically, Caps Co., Ltd., CAPSTEC.CO., LTD. and ADT Security Co., Ltd. The aggregate value of this acquisition deal was approximately USD 2 billion and was rightfully considered one of the Carlyle Group’s most successful acquisitions in years within the Korean M&A market. In this regard, commensurate with the amount of financing involved, the deal entailed the implementation of a particularly complex acquisition financing structure, which included the integration of various finance structure components, such as senior and subordinated lending arrangements and the issuance of mezzanine bonds. As the largest dollar-amount deal for a PE buyout since 2008, the acquisition attracted considerable attention in the market.
In connection with this deal, Lee & Ko’s tax team also was retained to undertake a pre-sale analysis of all potential tax issues, including examining the risks associated with claiming benefits under a tax treaty and providing pre-sale restructuring advice resulting in a formation of a new Korean business structure for Tyco Group with respect to assets that were not covered by the deal.