The Work

September 30, 2010 3:08 PM

Arnold & Porter, Simpson Thacher Score Roles on AOL Acquisition Spree

Posted by Brian Baxter

When AOL moved forward with three acquisitions this week, the former Time Warner subsidiary and current digital media giant turned to two Am Law 100 firms to help get the deals done.

AOL general counsel Julie Jacobs, who took over the position earlier this year from predecessor Ira Parker, told The Am Law Daily in an e-mail that Arnold & Porter and Simpson Thacher & Bartlett advised the New York-based company on its acquisitions of a leading technology blog and two tech firms.  

A&P partner Paul Freshour in McLean, Va., advised AOL, which moved its headquarters from nearby Dulles, Va., to New York three years ago, on its purchase of TechCrunch and social networking software provider Thing Labs. Freshour says his firm has been working with AOL and its "various iterations and incarnations" since 1993, generally getting brought in to advise on "private M&A-type deals." He's personally advised AOL on more than a dozen transactions, such as its acquisitions of StudioNow, Patch Media, and Truveo.

TechCrunch, which was founded in 2005 by former O'Melveny & Myers and Wilson Sonsini Goodrich & Rosati associate Michael Arrington, was advised by Perkins Coie emerging companies partner Lior Zorea in Menlo Park, Calif. Zorea didn't immediately respond to a request for comment, but Perkins Coie has previously represented Arrington and TechCrunch in litigation. Terms of AOL's aquisition of TechCrunch were not disclosed, but Dow Jones Newswires quoted a source familiar with the matter putting the tab at $30 million.

Arrington did not immediately respond to a request for comment sent to him through the TechCrunch site. The controversial former securities lawyer, who was named one of TIME magazine's 100 most influential people in 2008, has pledged to stay on at AOL for at least three years.  (Arrington recently spoke with Inc. about his daily routine and managing the transition from lawyer to entrepreneur to journalist.)

For its acquisition of 5min Media, a Web video syndication company, AOL turned to another longtime outside legal adviser at Simpson Thacher, Palo Alo-based corporate partner Peter Malloy. While the terms of that deal also weren't disclosed, AOL bought a similar online video platform in StudioNow earlier this year for $36.5 million.

Malloy didn't immediately respond to a request for comment, but his firm has enjoyed a long relationship with AOL, having advised the company on its mammoth $182 billion merger with Time Warner in 2000, at the peak of the Internet boom. As previously reported by The American Lawyer, Cravath Swaine & Moore's $35 million contingent advisory fee for client Time Warner on that transaction was believed to be the largest ever at the time for a law firm on an M&A deal. (The union was unwound in May 2009, and executives at both companies talked to The New York Times earlier this year to reflect on the ill-fated megamerger.)

AOL has since rebounded from its Time Warner foray. Bloomberg reports that the company has a lot of cash on hand and that's its trio of new deals could mark a return to relevance for the Internet icon.

AOL chief executive Tim Armstrong recently said his company's $100 million limit on deals had been scrapped and that AOL was looking to spend big again. That's exactly what corporate lawyers eager for M&A opportunities want to hear.

According to AOL's top in-house lawyer Jacobs, assistant general counsel Abigail Blomstrom took the lead on the TechCrunch deal, while deputy general counsel for transactions Matt Garber handled the company's purchase of 5min.

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