May 11, 2010 6:31 PM
On the Cusp of an M&A Boom?
Posted by Brian Baxter
CORRECTION: May 12, 4:00 p.m. An initial version of this post left out the name of Vinson & Elkins partner Douglas McWilliams, who led a team from the firm representing ETE. We regret the error.
The long-awaited thaw in the M&A market has been bandied about in recent months about as often as a Blockbuster bankruptcy filing. Seemingly always on the horizon, but just beyond reach, corporate lawyers are waiting for the bankruptcy wave to recede and the flood of prerecession transactional work to return.
If the growing number of deals announced in recent weeks is any indication, perhaps we really are seeing the early signs of a M&A boom. The Financial Times recently reported that a drop in the cost of capital--both debt and equity--could signal the start of a new M&A growth cycle. And Reuters reports that M&A activity should rise by roughly 25 percent this year because of increased deal work in Asia and the U.S. (Europe likely will remain less attractive, given the ongoing economic troubles across the continent.)
Here's the latest on firms that have picked up transactional work on deals valued between $300 million and $1 billion over the past week.
APAX PARTNERS / TIVIT
Private equity giant Apax Partners--owner of Am Law Daily parent company ALM Media--is plunking down $1 billion for its first acquisition in Brazil, according to Bloomberg.
Apax reportedly has agreed to acquire 54 percent of computer services company Tivit Terceirizacao de Processos, Servicos de Tecnologia (Tivit), in a deal that values the Brazilian company at $1 billion. Tivit is owned by Brazilian conglomerate Grupo Votorantim.
Skadden, Arps, Slate, Meagher & Flom M&A partners Paul Schnell, Ann Beth Stebbins, and Kenneth Wolff in New York advised Apax on the deal along with corporate partner Richard Aldrich, Jr., in São Paulo. (Skadden opened its São Paulo office in September 2008.) Mauro Sampaio, a corporate partner at Brazilian firm Barbosa, Müssnich & Aragão, is serving as local counsel to Apax on the acquisition.
Tivit turned to Maria Cristina Cescon and André Stocche from Brazilian firm Souza, Cescon, Barrieu & Flesch for outside counsel on the deal.
COMTECH / CPI INTERNATIONAL
Comtech Telecommunications announced on Monday that it would buy smaller telecom equipment maker CPI International in a $472.3 million cash and stock deal, Reuters reports.
Skadden M&A partner Jeffrey Tindell in New York and antitrust partner C. Benjamin Crisman, Jr., in Washington, D.C., led a team from the firm advising Comtech on the acquisition. Tindell and Crisman previously advised Comtech on its $224 million acquisition of fellow telecom Radyne in May 2008--the second deal in one day that Tindell closed for the firm at the time.
Proskauer Rose also advised Melville, N.Y.-based Comtech on its latest deal, which is the largest acquisition in the company's history. M&A partner Robert Cantone, employee benefits partner Ira Bogner, and environmental partner Gail Port led the team from the firm. Richard Goldberg, an optional service partner in Proskauer's corporate department, has been a member of Comtech's board of directors since 1983.
CPI turned to Irell & Manella corporate partners Richard Wirthlin and Kevin Finch to advise on the acquisition along with antitrust and litigation partner Alexander Wiles. The firm has long been outside legal counsel to the Palo Alto-based company. Delaware's Morris, Nichols, Arsht & Tunnell advised a special committee of CPI 's board of directors.
ETE / REGENCY ENERGY PARTNERS
Dallas-based Energy Transfer Equity (ETE), the general partner of Energy Transfer Partners (ETP), announced on Tuesday that it would buy a general partner's interest in Regency Energy Partners for $300 million in preferred units, Bloomberg reports.
ETE sells more than 600 million gallons of propane a year to over 1 million customers in 40 states. Regency, an independent energy partnership focused on natural gas processor and pipeline operator, is controlled by an affiliate of GE Energy Financial Services.
Regency's 100 percent general partner stake will be acquired by ETE from an affiliate of GE Energy, whose affiliates will retain 24.7 million units in Regency, Reuters reports. ETE will own and operate Regency and Energy Transfer Partners as separate entities. As part of the deal, Regency will acquire nearly a 49.9 percent ownership interest in pipeline company Midcontinent Express from ETE, according to the Dallas Morning News.
Not surprisingly, the thicket of partnerships and energy interests involved a small army of lawyers to work out the details.
Mayer Brown corporate partners Dan Fleckman and William Moss III, tax partner Jeffrey Bruns, antitrust partner Scott Perlman, and antitrust counsel Jay Brown advised Regency Energy on the deal. Fleckman joined the firm a year ago after serving as executive vice president and chief legal officer of Regency Energy. GE Energy turned to Latham & Watkins corporate partner Charles Carpenter, tax partner C. Timothy Fenn, and associate Zachary Judd.
G. Michael O'Leary, cochair of the corporate securities practice at Andrews Kurth, advised ETP along with corporate partner Gislar Donnenberg, tax partners Thomas Ford, Jr., and Robert McNamara, and tax of counsel Allison Mantor. Vinson & Elkins represented ETE on the deal. Douglas McWilliams, an energy industry partner specializing in master limited partnerships, led a team from the firm that consisted of corporate partner Jeffery Malonson, tax partner John Lynch, and antitrust partner William Vigdor.
WARBURG PINCUS / POUNDLAND
What a dollar store is to customers in the U.S., Poundland is to a British clientele. The Willenhall, England-based variety store chain--everything sells for £1--was sold last week to U.S. private equity firm Warburg Pincus for roughly $305 million, Reuters reports.
Clifford Chance corporate partner Spencer Baylin, private equity partner David Walker, and competition partner Jenine Hulsmann are advising longtime client Warburg Pincus on the acquisition. (Baylin and Hulsmann led a team from the firm that advised Deutsche Telekom on its mobile phone megamerger with France Telecom's Orange UK last year.)
New York-based Warburg Pincus last turned to Clifford Chance in January for its $452 million acquisition of safety equipment manufacturer Survitec Group from Montagu, a midmarket European private equity investor.
Weil, Gotshal & Manges senior private equity partner Marco Compagnoni in London advised Poundland's private equity owner, Advent International, on the sale to Warburg Pincus. Corporate associates James Harvey and Alexander Hasek, finance associate Katy Byatt, and tax associate Oliver Walker assisted Compagnoni on the deal. (Weil advised Advent on its original acquisition of Poundland in 2002.)
British firm George Green is advising Poundland management on the sale to Warburg Pincus.
LONDON & STAMFORD / RADIAL
Landlord and investor London & Stamford has acquired the Radial distribution fund for $310 million, Dow Jones Newswires reports. Radial, which is owned by British banking and insurance company HBOS and Warner Estate Holdings, will see London & Stamford take a 94 percent ownership stake in its commercial property portfolio by exchanging contracts with Warner and Uberior Ventures.
The WSJ notes that London & Stamford began buying up real estate assets at the bottom of the market last year and intends to remain active in the market. Jones Day M&A partner Giles Elliott and David Roberts, cohead of the firm's worldwide real estate practice, served as counsel to London & Stamford on the deal.
Clifford Chance M&A partner Adrian Levy in London advised Warner and Uberior Ventures on the sale. Ian Cox, head of the real estate practice at British firm Herbert Smith, represented Anglesea Capital in the deal. Anglesea, a vehicle that invests in U.K. property assets, will be a 6 percent minority joint venture partner in Radial.Make a comment