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Services Available
We have assembled a team of experienced regulatory and transactional lawyers with extensive knowledge in FDI transactions that implicate national security. Our team approach enables us to guide our clients efficiently through the web of U.S. national security approvals and filings. These regulatory and government contract issues, if not addressed at the outset of a transaction, can become deal-breakers, expose transactions to legal challenges and increased costs, and may frustrate the ability of the acquiring firm or the investor to obtain the full benefit of the transaction. Kaye Scholer is uniquely qualified to help identify and address the particular issues involving FDI in the national security sector.
National Security
Kaye Scholer’s national security practice, which includes former Pentagon and Defense Security Service staff, is recognized by the U.S. government, several foreign governments, and the defense industry as one of the most experienced in the United States. Since the early 1980s, our lawyers have helped craft mitigation plans to facilitate foreign investment in U.S. companies performing classified contracts. Indeed, during this time, a majority of the plans to mitigate foreign ownership, control or influence (“FOCI”) were developed with the assistance of Kaye Scholer lawyers, including some of the most innovative FOCI mitigation approaches accepted by the U.S. government. Kaye Scholer lawyers also helped secure the first Secretarial waiver of the statutory prohibition against contracting with foreign government-controlled corporations on contracts requiring access to highly classified information.
Exon-Florio/FINSA
Under the Exon-Florio Amendment to the Defense Production Act, as amended most recently by the Foreign Investment and National Security Act of 2007 (“FINSA”), the multi-agency Committee on Foreign Investment in the United States (“CFIUS”) is authorized to investigate foreign mergers, takeovers and acquisitions that may affect U.S. national security. Since Exon-Florio was enacted, Kaye Scholer has guided more than 200 transactions through the CFIUS process, and is acknowledged as the leader in cases involving the aerospace and defense industry. In 2007 alone, we served either as lead counsel or as advisors to the buyers or sellers in 30 CFIUS reviews, more than 20 percent of all cases filed.
Corporate
A leading adviser to public and private companies, and strategic and financial investors, Kaye Scholer’s corporate practice involves all aspects of cross-border merger, acquisition and divestiture transactions, joint ventures, teaming agreements and other strategic alliances. We advise on transactions ranging from small add-on acquisitions to those involving billions of dollars. The corporate lawyers in our National Security Group work with their national security, export control and government contract colleagues, as well as specialists in intellectual property, antitrust, tax, labor, white collar, and environmental practices, to provide an integrated and efficient approach to FDI transactions involving national security issues and to coordinate the specialized expertise required to develop efficient transaction structures, perform diligence on the target and its business, and mitigate post-transaction risks. We work with clients to understand and achieve their business goals in compliance with applicable government regulations. Recognized in Chambers USA: America’s Leading Lawyers for Business (2008) as a firm that clients turn to “when transactions are especially complicated or have international elements,” Kaye Scholer clearly understands the unique perspective of our international clients and, in particular, those engaging in transactions with national security implications.
ITAR/Export Controls
U.S. companies that manufacture or export defense technologies must comply with the International Traffic in Arms Regulations (“ITAR”), administered by the U.S. Department of State, or, for commercial products with military applications, with the Export Administration Regulations, administered by the U.S. Department of Commerce. In recent years, the U.S. government has magnified its focus on these regulations. By working with our clients to identify compliance issues and disclose and resolve infractions, we seek to ensure continuity of business operations following acquisition, consistent with the requirements of U.S. law. We represent clients in internal and government investigations, in diligence and acquisition planning, voluntary disclosures, export compliance programs, registration issues and commodity jurisdiction determinations. We also assist clients in complying with trade sanctions and anti-boycott regulations, and in securing licenses, as well as approvals of agreements to facilitate technology transfers.
Government Contracts
We represent clients with respect to federal, state and local government contract matters, including the preparation of bids, the negotiation of contracts and teaming agreements, the prosecution and defense of bid protests and claims, the defense of government audits and investigations (including criminal and civil claims), and suspension and debarment actions. We advise clients on disclosure requirements of the Truth in Negotiations Act and similar statutes, cost accounting requirements, ethical standards, compliance with government certifications and specifications, and internal investigations, as well as employment disputes, audits by the Office of Federal Contract Compliance Programs (“OFCCP”), and federal pension laws and regulations. In FDI transactions, we perform diligence on these matters as well as review contract files, assist in analysis of risks on issues related to set-aside programs, and obtain novations of contracts post-closing.
Representative Clients
- Detica Group plc
- EADS NV
- Ericsson Inc.
- Finmeccanica SpA
- GKN plc
- Meggitt PLC
- Nortel Government Solutions Incorporated
- QinetiQ Group plc
- Rolls Royce plc
- Saab Holdings U.S., Inc.
- Selex Sensors & Airborne Systems (U.S.) Inc.
- Spirit AeroSystems Holdings, Inc.
- Ultra Electronics Holdings plc
- VT Group plc
Representative Matters
- Spirit AeroSystems Holdings, Inc.
Spirit AeroSystems, the world’s largest supplier of commercial airplane assemblies and components, called on Kaye Scholer when it decided to issue common shares for its $1.65 billion initial public offering. Our corporate lawyers advised Onex Corporation on its initial acquisition of Spirit, advised Spirit on its subsequent IPO, and continue to represent Spirit on its transactions.
Finmeccanica, the main Italian industrial group operating globally in the aerospace, defense and security sectors, regularly retains Kaye Scholer to assist with U.S. national security regulatory approvals required for acquisitions, including in relation to its recently announced proposed acquisition of DRS Technologies.
- Ultra Electronics Holdings plc
When one of the world’s leading aerospace and defense electronics companies looks to make strategic FDI acquisitions in the United States, they trust Kaye Scholer to assure successful completion of their acquisitions. Kaye Scholer has advised on more than 10 transactions for Ultra Electronics.
We have represented Meggitt in its many mergers and acquisitions of companies involved with U.S. national security, including its $1.8 billion acquisition of K&F Industries Holdings, Inc.
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