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March 12, 2012 5:29 PM

As IPO Market Gains Steam, Am Law Firms Advise Latest Batch of Share-Sellers

Posted by Tom Huddleston Jr.

The global market for initial public offerings struggled last year, with IPOs down roughly 29 percent from 2010, according to Renaissance Capital, which tracks IPO filings in the United States. At the same time the 261 domestic IPO filings were the most the U.S. has seen in a single year since 2000.

Internet companies in particular made a significant comeback last year, with the 24 that sold shares—including Groupon, LinkedIn, and Zynga—representing the largest number in a decade, Renaissance reports. The first quarter of 2012 has seen buzz building ahead of Facebook's looming IPO and trading in shares of review site Yelp start in early March.

As The Am law Daily reported in December, an SEC filing submitted in November showed that Yelp has turned to Cooley as legal counsel on the IPO, with Davis Polk & Wardwell advising the offering's underwriters. The company revealed in an SEC filing last month that it spent $1.2 million on legal fees and expenses related to that IPO, which is set to raise about $107 million and will value Yelp at nearly $900 million. And last month, The Am Law Daily reported that Fenwick & West had landed the coveted role advising Facebook on what is expected to be one of the largest IPOs ever; Simpson Thacher & Bartlett is advising the underwriters on that offering.

The news surrounding Facebook's public share sale has continued this week, with the social media giant doubling its credit facility to $5 billion, securing a $3 billion bridge loan, and adding still more underwriters to an already stocked lineup. Facebook now has 31 underwriters on the proposed IPO. 

As Reuters points out, though, the IPO market has hardly been a sure thing lately, as multiple companies have seen their offerings fall short of expectations. Nationstar Mortgage priced its IPO below the expected range, while drug developer Argos Therapeutics pulled its offering earlier this week due to uncertain market conditions, Reuters notes.

Nationstar is being advised by Cleary Gottlieb Steen & Hamilton on its offering, while Skadden, Arps, Slate, Meagher & Flom is representing underwriters led by Bank of America/Merrill Lynch, Citigroup, Credit Suisse, and Wells Fargo Securities, according to an SEC filing. Argos had been advised by Wilmer Cutler Pickering Hale and Dorr, with Goodwin Procter representing the underwriters.

And, earlier this month, both the wireless chip producer GCT Semiconductor Inc. and real estate investment trust Provident Mortgage Capital Associates announced that they would postpone their respective IPOs. GCT is being advised by Cleary, while a Wilson Sonsini Goodrich & Rosati team is representing the underwriters. In an SEC filing, GCT has listed $1.6 million in legal fees and expenses in relation to the postponed offering. Provident is being advised by Clifford Chance, while a Fried, Frank, Harris, Shriver & Jacobson team is representing the underwriters. In an SEC filing, Provident pegs legal fees connected to the offering at $2.2 million.

 

In other news about notable IPOs and the law firms helping to bring them to market...

 

Allison Transmission

Indianapolis-based automotives group Allison Transmission Holdings, which filed for its initial public offering in spring 2011, aims to raise $500 million when it launches its IPO later this week, according to Renaissance. The company has set its target share price at between $22 and $24. The Financial Times notes that the IPO is being closely watched as a gauge of investor confidence in the economy, and in industrial companies in particular.

Latham & Watkins capital markets partners Rachel Sheridan and Jason Licht are advising Allison on the IPO. Cleary capital markets partner William Gorin is representing underwriters led by Bank of America/Merrill Lynch, Citigroup, J.P. Morgan, Credit Suisse, Morgan Stanley, and Goldman Sachs.

Allison has estimated legal fees and expenses related to the IPO at $3 million, according to an SEC filing.

BATS Global Markets

Lenexa, Kansas–based BATS Global Markets, the U.S.'s third-largest stock exchange operator, filed plans Monday to list an initial public offering. BATS plans to raise $107 million, and has priced its shares between $16 and $18, which would value the company at roughly $810 million, according to The New York Times. 

Davis Polk capital markets partner Deanna Kirkpatrick is advising BATS, which plans to list its shares on its own exchange. Skadden corporate partners Gregory Fernicola and Phyllis Korff are representing underwriters led by Morgan Stanley, Citigroup, Credit Suisse. 

BATS set its legal fees and expenses relating to the offering at $2 million in an SEC filing.

Brightcove

Though some technology companies have struggled to live up to expectations in their public offerings, online video distributor Brightcove had a successful IPO last month, raising $55 million. Cambridge, Massachusetts–based Brightcove, which priced its offering in the $10–$12 range, has seen its share price rise to nearly $16 after less than a month of trading.

Goodwin Procter technology companies partners William Schnoor and Joseph Theis are advising Brightcove on the offering. David Westenberg, a Wilmer corporate partner, is representing underwriters led by Morgan Stanley and Stifel, Nicolaus & Company.

In an SEC filing, Brightcove states that $1.3 million would go toward legal fees and expenses related to the IPO.

Caesars

Las Vegas–based Caesars Entertainment—which pulled a proposed $500 million public offering in 2010 when it was known as Harrah's—finally proceeded with its planned IPO last month. Caesars said it would sell about 1.8 million shares, priced at about $9 apiece. The company's largest owners are private equity firms Apollo Advisors and TPG Capital, which agreed to acquire the gaming company in 2006.

Caesars has turned to Paul, Weiss, Rifkind, Wharton & Garrison capital markets partners Monica Thurmond and David Huntington as legal counsel on the offering. Thurmond also worked on the aborted IPO attempt in 2010, when she was a partner with O'Melveny & Myers. She joined Paul Weiss last May. 

William Hartnett, chairman of the executive committee at Cahill Gordon & Reindel,is  advising underwriters led by Bank of America/Merrill Lynch, Citigroup, Credit Suisse, and Deutsche Bank on the offering, along with corporate partners William Miller and John Tripodoro. That same trio of partners  also advised the underwriters in 2010.

In its SEC filing, Caesars lists $1 million in legal fees and expenses in relation to the public offering.

ChemoCentryx

Mountain View, California–based drug developer ChemoCentryx launched its IPO last month looking to raise $60 million selling 4 million shares for between $14 and $16, according to The Recorder. But, the company's stock has failed to top $12.77 at any point in more than a month of trading. The company previously withdrew an attempt to file for an IPO in 2008, The Recorder notes.

Latham corporate partner Thomas Edwards and corporate counsel Michael Sullivan advised ChemoCentryx on the offering. Corporate partner Alan Denenberg of Davis Polk is representing the underwriters, led by J.P. Morgan and Citigroup.

In an SEC filing, ChemoCentryx lists $1.35 million in legal fees and expenses in relation to the public offering.

Empire State Building

Malkin Holdings, which owns the Empire State Building in Manhattan, filed for an initial public offering last month that would value the iconic skyscraper at $2.5 billion, according to CNN. Other New York properties owned by the company would be valued at about $1 billion total.

Clifford Chance capital markets partner Larry Medvinsky and capital markets counsel Jason Myers are advising Malkin's Empire State Realty Trust in connection with the offering. Stuart Barr, a corporate partner at Hogan Lovells, is representing the underwriters led by Bank of America/Merrill Lynch and Goldman Sachs.

Legal fees related to the work are not yet available, according to an SEC filing.

Fender

Fender Musical Instruments struck a chord in the IPO market on Thursday when the venerable guitar maker filed for its initial public offering. The Scottsdale, Arizona–based company—the largest manufacturer of electric guitars in the world—expects to raise $200 million through the offering, but did not specify in an SEC filing how many shares it will sell, or their price.

Sullivan & Cromwell M&A partner Alison Ressler and corporate partner John Savva are representing Fender. Simpson Thacher & Bartlett corporate partner Kevin Kennedy is advising underwriters led by J.P. Morgan Securities and William Blair & Company. Legal fees related to the work are not yet available, according to Fender's SEC filing.

Michael Kors

In December, The Am Law Daily reported that an initial public offering by apparel and accessories maker Michael Kors could value the Hong Kong–based company at $3.63 billion. The company was expected to trade as high as $19 per share, but ended up going for $20, and its stock price recently hit a 52-week high of $50.69. Kors raised $950 million in its offering.

As we reported, Paul Weiss partner John Kennedy advised Michael Kors on the IPO, along with general counsel Lee Sporn. Davis Polk capital markets cohead Richard Truesdell, Jr., is representing underwriters led by Goldman Sachs, JPMorgan, and Morgan Stanley. Michael Kors has listed legal fees and expenses related to the IPO at nearly $2.1 million, according to an SEC filing.

ProtoLabs and Enerkem

In addition to the Yelp IPO, Cooley stayed busy on February filings by Maple Plain, Minnesota-based Proto Labs and Montreal-based chemicals company Enerkem. Am Law Daily sibling publication The Recorder reported last month that Cooley partners Kenneth Guernsey, Charles Kim, and Sean Clayton advised underwriters led by Jeffries & Co. and Piper Jaffray on a Proto Labs initial offering that raised almost $70 million with shares trading from $16 to $29. Faegre Baker Daniels represented Proto Labs.

Cooley also served as U.S. legal counsel to Enerkem, which listed an offering price of $125 million in an SEC filing. Cooley's team includes business department partners Babak Yaghmaie, John McKenna, and Stephane Levy. Stikeman Elliot corporate partners Steeve Robitaille and Gayle Noble are Canadian counsel to Enerkem. Simpson Thacher is U.S. counsel, and McCarthy Tétrault is Canadian counsel, to underwriters led by Goldman Sachs, Credit Suisse, and BMO Capital Markets.

Legal fees and expenses for Enerkem were not listed in an SEC filing.

Ruspetro

White & Case is advising U.K. oil exploration and production company Ruspetro on a $250 million IPO on the London Stock Exchange, which the company filed for in January, according to the firm's Web site. The company, which has assets in Western Siberia, Russia, turned to a W&C team led by corporate partner Allan Taylor. Bank of America/Merrill Lynch is the primary underwriter.

Splunk

The Recorder has also reported that San Francisco–based Splunk Inc., which makes data analytics software, had filed to raise up to $125 million in its initial public offering. The Recorder notes that Splunk has catered to such clients as Bank of America, Zynga, and Salesforce.com, but the company's SEC filing shows it has not posted a profit in the past five years.

Wilson Sonsini Goodrich & Rosati vice-chairman Jeffrey Saper is advising Splunk on the offering, along with corporate partner Jon Avina. Davis Polk corporate partners Martin Wellington and Sarah Solum are representing the underwriters, who are led by Morgan Stanley, Credit Suisse, J.P. Morgan, and Bank of America/Merrill Lynch.

Legal fees and expenses related to Splunk's offering were not listed in an SEC filing.

Sunshine Oilsands

Canadian firm McCarthy Tétrault announced earlier this month that it had advised Calgary-based Sunshine Oilsands on its $578 million IPO on the Hong Kong Stock Exchange. The Globe and Mail reports that Sunshine is the only oil sands company listed in Hong Kong, and that the Canadian company's decision to list there instead of Toronto could prompt similar moves by other Canadian entities wary of a drooping North American IPO market.

McCarthy Tétrault's team is led by corporate partners Rick Pawluk and Gregory Turnbull. Freshfields Bruckhaus Deringer represented Sunshine in Hong Kong, led by China chairman Teresa Ko and corporate partner Ken Martin.

Tria Beauty

Ropes & Gray business partner David Saul is advising Tria Beauty in its initial public offering, according to The Recorder. Dublin-based Tria, which makes over-the-counter laser-procedure skin treatments, filed last month to raise up to $86.3 million. Davis Polk corporate partner Bruce Dallas is representing the underwriters, including Morgan Stanley, Piper Jaffray, and Wells Fargo Securities.

Legal fees and expenses for Tria's offering were not listed in an SEC filing.

Vantiv

Payment processor Vantiv said in November that it hoped to raise up to $100 million via its public offering. The Symmes Township, Ohio–based company submitted an additional SEC filing on Thursday, stating that it expects to raise about $460.8 million at an offering price of $17 per share. That price would value the company at roughly $3.6 billion, according to Reuters.

Vantiv has turned to Weil, Gotshal & Manges capital markets partner Alexander Lynch as legal counsel on the IPO. Davis Polk partner Richard Sandler, the firm's corporate governance cohead, is advising 11 underwriters—led by J.P. Morgan, Morgan Stanley, Credit Suisse, Goldman Sachs, and Deutsche Bank Securities. Meanwhile, Sullivan & Cromwell is representing Fifth Third Bancorp, which holds a nearly 49 percent stake in Vantiv. Corporate partner Alexandra Korry, finance partner Andrew Gladin, and tax partner Ronald Creamer, Jr., are working on the matter for S&C.

Vantiv said in its most recent filing that it expects to incur $6 million in legal fees and expenses in relation to the offering.

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