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November 8, 2010 6:22 PM

TPG Has Plenty of Work to Go Around

Posted by Brian Baxter

CLARIFICATION: 11/11/10, 12:00 p.m. The fourth paragraph of this story contains more detailed information on TPG's investment in WaMu provided by a spokeswoman for the private equity firm.

Four firms are advising Fort Worth-based buyout shop TPG Capital on the acquisition of a chemical distribution business and a property information division. The total value of both deals is nearly $2 billion.

TPG announced on Monday that it would buy a global chemicals distribution business from specialty chemicals company Ashland for $930 million in cash. Cleary Gottlieb Steen & Hamilton and Vinson & Elkins advised TPG on the deal.

The Cleary team was led by finance and M&A partner Duane McLaughlin in New York and consisted of associates Nathan Nagy, Dora Habachy, and Charles-Antoine Wauters. Last month the firm represented TPG when it took a 35 percent stake in Creative Artists Agency, the powerhouse Hollywood talent shop.

Cleary also advised TPG on its $1.4 billion acquisition of insurance software company Vertafore this past summer, $355 million investment in ailing British mortgage lender Bradford & Bingley in June 2008, and a $1.3 billion investment by TPG as part of a group sinking $7 billion into now-defunct Washington Mutual earlier that year.

Keith Fullenweider, chair of the M&A practice at Vinson in Houston, and M&A partner W. Creighton Smith led a team from the firm advising TPG that includes M&A partners Edward Stockbridge and James Hanna, environmental partner Larry Nettles, employee benefits partner David D'Alessandro, labor and employment partner Thomas Wilson, real estate partner Randy Jurgensmeyer, and antitrust partner Neil Imus.

Vinson has also enjoyed a longtime relationship with TPG, having advised the private equity firm on several major transactions, such as the $45 billion leveraged buyout of TXU in February 2007. Last month Fullenweider led a team from the firm counseling TPG on its $900 million acquisition of the Minnesota oil and gas assets of Marathon Oil. (Cleary also had a role advising TPG as part of a consortium taking over the Marathon assets.)

Fullenweider tells The Am Law Daily that the current Ashland deal is similar to the Marathon acquisition in that both involve assets of industrial companies where a unit is being "carved out" from a larger operation. "TPG considers carve-outs a specialty of their firm and [Vinson] is especially well suited to handle carve-outs in energy, chemicals, [and the] industrial sector because of our industry knowledge," he says.

TPG named Ronald Cami, a former corporate partner at Cravath, Swaine & Moore, as its new general counsel this past June.

It was Cravath that advised Ashland on the acquisition. General corporate practice head Susan Webster, tax department head Stephen Gordon, executive compensation and benefits head Eric Hilfers, and environmental partner Jeffrey Smith led the team from the firm, which has previously represented the Covington, Ky.-based company. Ashland's general counsel is David Hausrath.

Before the weekend, TPG tapped two other outside firms for another M&A deal approaching the $1 billion mark. On Friday, TPG announced that it would pay roughly $850 million to acquire a property information business from Richmond, British Colombia-based IT company MacDonald, Dettwiler and Associates (MDA), according to The Canadian Press.

Alfred Rose, head of the private equity transactions practice at Ropes & Gray, is advising TPG on the MDA deal along with corporate partner Amanda Morrison. Ropes also has a longtime relationship with TPG, having represented TPG on its $5.2 billion purchase of market research company IMS Health a year ago, one of the largest LBOs of 2009. Ropes counseled TPG earlier this year on its unsuccessful bid for bankrupt Extended Stay Hotels and teamed with Cleary to advise a private equity affiliate of TPG on the $5.9 billion sale of Alltel to Verizon in June 2008.

The Montreal Gazette reports that M&A cochair John Leopold and corporate partner Dean Koumanakos from Canadian firm Stikeman Elliott also advised TPG on the MDA deal. Elizabeth Harrison, a cross-border M&A partner at Vancouver firm Farris, Vaughan, Wills & Murphy, advised MDA on the spin-off of its unit, according to the Gazette.

The deal is expected to close sometime early next year, pending regulatory approvals.

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