Former Morrison & Foerster (MoFo) partner, Ruomu Li, has been appointed partner within Cooley’s mergers & acquisitions (M&A) and private equity (PE) business in Shanghai, according to an announcement by the firm last month. Li’s appointment took effect from December 15, 2022, and her advisory focus centers on those firms engaged in the technology and life science industries.
Li was most recently a partner within the M&A, PE investments and buyouts practices at MoFo in Shanghai. Prior to this, she served as counsel at Fenwick & West between 2014 and 2019, based in the US. Recent flagship transactions involving her participation include the $930 million privatisation of US-listed Chinese firm, eHi Car Services; and the $1.4 billion merger of Nasdaq-listed special purpose acquisition company (Spac), Silver Crest Acquisition Corporation, with the exclusive operator of Tim Hortons coffee shops in China, TH International Limited. Li also represented Tencent in its $2.7 billion sale of its portfolio company, Mobike, to Meituan.
Following her recent appointment, Cooley’s Shanghai headcount comprises 13 M&A and PE lawyers, including three partners, a spokesperson for the company confirmed.
Meanwhile, US-headquartered MoFo announced last week the appointment of Steven Tran within its PE and M&A practice, in Singapore.
Taking effect from January 1, Tran’s appointment sees him join the more-than-50 dedicated PE/M&A lawyers that MoFo employs in Asia. From his base in Singapore where the firm counts 10 partners and 25 lawyers, Tran will work closely with the wider Asia team across Hong Kong, China and Tokyo, a spokesperson for MoFo told FA.
Globally, MoFo has added 20 private equity partners since 2019 through lateral hiring and promotions. The firm declined to comment on whether Tran’s appointment could be considered a replacement for Li, adding only that his appointment “further strengthens and deepens the firm’s Asia and global private equity offerings.”
Tran’s previous experience includes partner roles at Kirkland & Ellis and, most recently, Mayer Brown.
Notable transactions involving his advisory expertise include Tricor Group’s restructuring of its Vietnam and Thailand operations, and its acquisitions of Richful Deyong, Madison Pacific Group, and a Japanese business services company; and LimeTree Capital’s disposal of its portfolio of real estate assets in Sri Lanka, Cambodia, and Palau; as well as other deals involving regional and global sovereign wealth and private equity funds.
Regulatory rhetoric
Speaking on the M&A trends likely to continue into the new year, Li highlighted the challenging regulatory environment in China.
“Enhanced anti-monopoly and anti-trust reviews by the global regulatory bodies threaten to slow down deal making, especially for large companies…. To avoid regulatory risk, investors may focus on targets in Southeast Asia,” she told FinanceAsia.
In the life sciences sector, Li expects both licensing-in and licensing-out deals for pharmaceutical firms to remain active. However, following several record years of fundraising by life science companies, she thinks investors are becoming more cautious when it comes to valuation, and more selective on targets. “Consolidation of underfunded companies will likely drive more M&A deals in the life sciences space,” she explained.
Besides life sciences, the clean energy sector will drive deal activity given the increased focus on environmental sustainability regionally and globally, Li explained.
IPO the best option
The PE space has faced a number of major headwinds in recent months, including rising interest rates and macroeconomic uncertainty, all of which have impacted general partner (GP) fundraising capabilities, leading to a fall in deal volumes in 2022.
Li believes that these headwinds are likely to persist in 2023. “In the meantime, undervalued public companies will become attractive targets to take-private, especially for the PE funds with a lot of dry power to deploy,” she said.
Indeed, notwithstanding the ongoing headwinds faced by businesses the region the MoFo team remains optimistic about the outlook for the region’s capital markets in 2023:
“While the macroeconomic, geopolitical and regional issues which caused activity in the public markets in Asia to slow down last year are likely to persist in 2023, there have been early signs of a potential improvement in the IPO market in Hong Kong, with indications that some of the planned mega IPOs will be completed on the Hong Kong Stock Exchange in 2023,” the firm’s spokesperson said.
Li believes that, despite weak capital market activity last year, in the coming months IPO will prove the most attractive exit option for investors.
“The [US] Public Company Accounting Oversight Board (PCAOB)’s completion of on-site inspections of registered public accounting firms headquartered in Mainland China and Hong Kong in December 2022 brings back to the table the prospect of US IPOs for certain Chinese companies,” she said.
The MoFo team concurred. “[This has] abated some of the anxiety and risk held by investors of mass de-listings facing around 170 notable Chinese companies, [therefore] there will likely be renewed interest in US IPOs by Chinese headquartered companies this year,” the spokesperson told FA.
In the context of her sector-specialism, Li shared, “Hong Kong IPOs remain attractive to pre-revenue life sciences companies and technology companies. Semiconductor companies will likely prefer listing in mainland China for higher valuation.”
