The Work

July 28, 2008 1:17 PM

Cravath Helps Unilever Wash Hands of Laundry Brands

Posted by Zach Lowe

Cravath, Swaine & Moore advised Unilever on the $1.45 billion sale of its laundry brands to the private equity firm Vestar Capital Partners, the nineteenth divestment that the world's second-largest consumer goods company has made since 2003.

Kirkland & Ellis represented Vestar.

Unilever will unload such name brands as Wisk, Snuggle, and All in the deal; the company estimates its North American detergent business brings in about $1 billion annually.

Unilever said last year it planned to sell off about $3.1 billion in assets to spur growth and catch up with Procter & Gamble. Unilever also is cutting jobs and moving research work to China and India, Bloomberg reports.

Vestar plans to combine the newly acquired Unilever products with its Huish detergents unit to form Sun Products Corp., the firm said in a statement.

Under the terms of the deal, Vestar put up about $1.08 billion in cash and promised Unilever about $375 million in Sun Products preferred stock.

The structuring of the transaction shows that private equity deals worth more than $1 billion can still happen, even in a tough economy, says Cravath partner Mark Greene, who led the deal team along with litigation partner Katherine Forrest and tax partner Michael Schler.

"Both sides have to be creative," Greene says. "These deals can still be done, but they are not going to be done the same way they were two years ago--with very little equity and a whole lot of debt."

Cravath has represented Unilever for at least 50 years, Greene says. Slaughter & May in England and De Brauw Blackstone Westbroek handle European transactions for the Anglo-Dutch company, but neither firm participated in this deal because it was limited to North American assets, Greene says.

Corporate partner Michael Movsovich led the Kirkland team. The firm has represented Vestar since it formed in the late 1980s, Movsovich says. Vestar's general counsel, Jack Feder, is a former Kirkland senior attorney. Also on the deal for Kirkland: tax partner Greer Phillips and M&A partner Kester Spindler.

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