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December 13, 2010 4:12 PM

Dewey Steps In to Help Dell Land Data Storage Provider for $960 Million

Posted by Julie Triedman

Dell Inc. will acquire Eden Prairie, Minn.-based data storage provider Compellent Technologies for $960 million in cash, the company announced early Monday. The deal represents a critical second act for Dell, which lost a fierce bidding war over a larger data storage company, 3Par, in early September to Hewlett-Packard Co. Dell currently is the fifth-largest data storage provider worldwide, by revenues, behind EMC, IBM, NetApp, and HP, according to IDC Worldwide Disk Storage Systems Quarterly Tracker.

Dell, HP, and International Business Machines have all recently been working to build out their storage system capabilities in an attempt to position themselves as "one-stop shops," according to Reuters.

In a coup for Dewey & LeBoeuf, Dell tapped Silicon Valley M&A partner Richard Climan to head the deals team. Climan was assisted by New York M&A partner Lorenzo Borgogni and Silicon Valley managing partner Eric Reifschneider. Borgogni moved to the firm's Silicon Valley office to assist on the deal, Climan says. Dell also looked to senior corporate counsel Scott Depta for deal advice.

Dewey's, and Climan's, representation of Dell is recent. The firm did not work with Dell on its failed 3Par bid--Debevoise & Plimpton handled that, as we've previously reported. Climan first represented Dell in February on the company's acquisition of Kace Networks, a privately held systems management appliance maker. (The value and terms of that deal were not disclosed.) Vinson & Elkin handled Dell's last big public company acquisition, the $3.9 billion acquisition of Perot Systems in 2009, as we reported at the time.

Climan, who has been involved in some of Silicon Valley's largest tech deals in the past two decades, was head of Cooley's M&A practice until July 2008, when he made big news with his move to head up the M&A practice at Dewey.

Negotiating across the table from Climan was his former partner and colleague, Barbara Borden (his replacement as head of M&A at Cooley). Borden, who is based in San Diego, was assisted by: corporate partner Nicole Brookshire, business partner Mark Tanoury, M&A partner David Lipkin, and special counsel Rama Padmanabhan in the business department; tax partner Mark Winfeld-Hanson; compensation and benefits partner Wendy David; IP partner Adam Ruttenberg; and antitrust partner Howard Morse.

Compellent also tapped Delaware counsel Mark Morton at Potter Anderson & Corroon, according to Borden. The company does not have in-house counsel.

News of an agreement was expected since Dell and Compellent had issued a statement, on December 9,  that they were in advanced discussions. That announcement, noting that Dell was considering valuing Compellent at $27.50 a share, came amid leaks about a potential combination, and puzzled many market watchers. In the weeks prior to the deal, Compellent's share price had surged by 46 percent on rumors of a Dell deal. The share price ultimately agreed to is $27.75.

Dealmakers and M&A observers call such a deal a "take-under"-- the final offering price was less than the share price last Wednesday, $33.65. Such reverse share price differentials are exceedingly rare, say M&A lawyers.

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