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June 9, 2010 4:19 PM

Delicious Deals for Kirkland, Cravath, DLA

Posted by Zach Lowe

When we were in high school, every Friday was quarter cookie day. For a dollar, you could buy four soft and delicious Otis Spunkmeyer chocolate chip cookies, and we did so on just about every single Friday after the cafeteria instituted quarter cookie day. We were reminded of quarter cookie day on Tuesday, when we saw that Aryzta, the Swiss company that recently acquired the Spunkmeyer brand, bought up two other baked goods companies in simultaneous deals valued at about $1.1 billion combined. 

A team from Kirlkland & Ellis led by partners Travis Nelson and Sanford Perl advised Aryzta on the deal. The company is a relatively new client, Nelson says; Kirkland actually represented Otis Spunkmeyer in its sale to the Irish food company IAWS in 2006, Nelson says. IAWS later merged with Aryzta, according to Bloomberg

Of the two deals announced this week, the larger was Aryzta's $900 million purchase of Fresh Start Bakeries. A Cravath, Swaine & Moore team led by partner Richard Hall advised Fresh Start on the deal. Fresh Start is a portfolio company of the private equity fund Lindsay Goldberg, which has been a Cravath client for about 20 years, Hall tells us. The Cravath team had to spend a lot of time dealing with how to distribute the sale proceeds among Fresh Start shareholders and options holders, with most of the latter being Fresh Start employees, Hall says. Aryzta is paying for Fresh Start with a combination of cash and stock, and the Cravath team had to figure out how to properly divide cash and Aryzta shares among traditional equity holders and those holding options at various strike prices, Hall says. The team also came up with a way to address the fact that Fresh Start shareholders, mostly U.S.-based, will end up with Aryzta shares that do not trade here. (They trade in Switzerland.)

The agreement gives Fresh Start shareholders the option to place their Aryzta shares in a larger pool for which a larger financial institution will handle trading duties, Hall says. 

Aryzta also purchased Great Kitchens, which specializes in frozen pizza, for $180 million, Reuters reports. A team from DLA Piper led by partners Steven Napolitano and Jason Booth advised Great Kitchens, according to lawyers on the deal.

The two deals were not mutually dependent upon each other, meaning Aryzta did not need to close one in order to close the other, Nelson says.

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