The Work

August 10, 2009 12:46 PM

Davis Polk, Bryan Cave On $596 Million Barnes & Noble Deal

Posted by Zach Lowe

Davis Polk & Wardwell and Bryan Cave advised in a deal in which Barnes & Noble purchased a college textbook company which was owned separately by the company's chairman. The deal is valued at $596 million, according to the Associated Press and Bloomberg

Davis Polk represented a four-person special committee that had been appointed to represent Barnes & Noble's board given the relationship between the parties in the deal, according to a company statement.

Bryan Cave advised Barnes & Noble College Booksellers and Leonard Riggio, the Barnes & Noble chairman and private owner of the college textbook unit. (Barnes & Noble spun off the college unit in the mid-1980s to raise funds for an acquisition, Bloomberg says.)

Davis Polk is not Barnes & Noble's regular counsel. The four-person committee negotiating the deal held a beauty contest involving several firms last year and ended up choosing Davis Polk, says Joseph Rinaldi, the lead corporate partner on the deal. The negotiations between the committee and the textbook company had been going back-and-forth since late last year, with the bulk of the work coming in the last few months, according to Rinaldi.

Michael Rosen and Jay Dorman, the lead Bryan Cave partners on the deal, did not return calls seeking comment. Both have done prior work for Barnes & Noble, according to their bios, but they advised the college textbook company instead of the larger company in this matter. 

The textbook company operates 624 stores and generated about $1.8 billion in revenue in the most recent fiscal year, according to the company's statement. Buying the textbook company will save Barnes & Noble $6 million in annual royalty payments for online college textbook sales, the AP reports. 

The deal is expected to close on Oct. 1, and Barnes & Noble has secured a $1 billion four-year credit facility to help finance the deal and the company's future operations. 

Other partners on the Davis Polk team included corporate partners Lawrence Wieman and Jinsoo Kim; tax partner Kathleen Ferrell; intellectual property partner Frank Azzopardi; environmental partner Gail Flesher; and antitrust partner Paul Bartel II. 

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