BARBADOS Trends and Developments Contributed by: Debbie Fraser, Joanna M Austin and Makela Harrison-Yarde, Fraser Law
Finance Most transactions that the authors have seen in recent times are 100% cash-based, particu - larly by purchasers residing within the Caribbean region and domestically, with the funding being sourced from regional commercial banks; the most common security is security over commer - cial assets. There have also been a few trans - actions where a blend of cash and equity was used; however, in the authors’ experience, this approach has been utilised in larger M&As deals, such as those initiated by Canadian listed enti - ties that have used a combination of cash and equity for the acquisition of larger Barbados enti - ties. On an even smaller scale, the authors have seen M&A integrated with a buy- and leaseback structure. Environmental, Social Governance (ESG) ESG considerations are paramount for many purchasers considering the acquisition of busi - nesses. Internationally, entities with a good ESG reputation or score are becoming increasingly attractive to investors, and this is no different in Barbados; many of the larger Barbados com - panies are making ESG a part of their business. The existing ESG unofficial rating of a target enti - ty can impact the investor’s brand, and so busi - nesses continue to align themselves with more favourable business structures. While some investors may not conduct a focused ESG due diligence survey, they do consider the obvious things such as board structure, the nature of the business and its environmental impact and any steps taken by the entity to mitigate any environ - mental damage. Domestically, a good govern - ance policy is also crucial as a merger with an entity that does not meet compliance standards, or has been fined for non-compliance, could have a negative impact on the overall busi - ness. There have been early discussions as to whether regulatory approvals in future will come
with “ESG targets” and additional requirements for corporate social responsibility and contribu - tions to the community in which the businesses (eg, manufacturing entities) are located. The authors continue to watch for developments in this regard. Data Privacy and Artificial Intelligence With the increased emphasis on data privacy and security, parties have to consider the impact of data privacy laws on M&A transactions. The Data Protection Act of Barbados (DPA) provides that a data subject must authorise the transfer of personal data, except in the limited circum - stances where consent is not required. It may not be practical to obtain the consent of the entire client base in order to facilitate early due diligence disclosure requirements or the transfer of personal data on the completion of an M&A transaction. The authors are not aware of any adjudication by the High Court of Barbados on the DPA, and it therefore does not appear that an exemption on the basis of “legitimate interests” provided for in the DPA will apply to M&A trans - actions. As a practical matter, at the due dili - gence stage, parties should consider redacting elements of personal data, such as names and dates of birth, to ensure persons are not person - ally identifiable from the data provided and thus that there is no breach of the DPA. The trans - feror must also ensure that the personal data will be held securely once transferred. In 2023, the Central Bank of Barbados issued its Tech - nology and Cyber Risk Management Guideline, which was followed by the Cyber Risk Manage - ment Guideline issued by the FSC in December 2024, reflecting increasing efforts by regulators to ensure that data is protected. Locally, the use of artificial intelligence (AI) in business is developing, and it is anticipated that AI will emerge as a critical tool in M&A, par -
220 CHAMBERS.COM
Powered by FlippingBook