The Work

May 27, 2011 1:06 PM

IPO Boom Keeps Am Law Corporate Practices Humming

Posted by Brian Baxter

The pipeline for initial public offerings is crowded again, and Am Law 200 firms are reaping the benefits.

The Am Law Daily's Dealmaker of the Week was Wilson Sonsini Goodrich & Rosati corporate partner Katharine Martin in Palo Alto, who handled an IPO for business-networking company LinkedIn that's already raised more than $400 million.

As previously noted, legal fees and expenses related to the LinkedIn offering, which saw the company's share price double in the first day of trading, were $1.5 million. (The IPO made an instant millionaire out of LinkedIn general counsel Erika Rottenberg, according to sibling publication Corporate Counsel.) Wilson Sonsini, meanwhile, is also doing securities work for another Silicon Valley-based client, advising underwriters on an upcoming IPO for semiconductor maker InvenSense.

The surge in IPO activity has some, such as former hedge fund manager Andy Kessler, wondering about the valuations of companies coming to market. The Economist, which foresaw the last tech bubble, earlier this month opined about another tech bubble and warned investors to check their "irrational exuberance."

That talk was renewed this week when Yandex, an Internet company called "Russia's Google," raised more than $1.3 billion in its Nasdaq debut. (As we reported two weeks ago, Wilmer Cutler Pickering Hale and Dorr is advising Yandex.) But not everyone is viewing the stream of new public listings skeptically.

This week, sibling publication The Recorder caught up with Fenwick & West chairman Gordon Davidson to chat about the possibility of a new tech bubble. Davidson doesn't see one forming yet, noting that many of the companies coming to market have substance and sustainable business models unlike some of their predecessors a decade ago.

One firm that's getting busy with IPO work is Clifford Chance, which last month represented underwriters on a $10 billion IPO by commodities trader Glencore International. Clifford Chance is also advising leading marine terminal operator DP World on a proposed $11 billion listing in London next month, as well as the Spanish government in a plan to privatize the country's state lottery through an IPO that could raise more than $10 billion.

Some other companies that have recently announced their intention to go public...

Delphi Automotive: The sixth-largest auto supplier in North America filed for a $100 million IPO on Thursday, only two years after it emerged from bankruptcy proceedings. Davis Polk & Wardwell partner Michael Kaplan is advising Troy, Mich.-based Delphi on its IPO.

Davis Polk advised Delphi's agent bank, JPMorgan Chase, during the company's four years in bankruptcy court. Channel Islands firm Carey Olsen is serving as offshore counsel to Delphi, whose general counsel is David Sherbin.

Skadden, Arps, Slate, Meagher & Flom partner Richard Aftanas is representing underwriters led by JPMorgan and Goldman Sachs. Skadden served as lead counsel to Delphi during its Chapter 11 case, which finally ended in October 2009.

Rexnord: Controlled by private equity giant Apollo Management, Milwaukee-based industrial products company Rexnord filed for a $700 million IPO on Thursday. O'Melveny & Myers partner William Kuesel is advising Rexnord on its IPO, along with Kenneth Hallett of Milwaukee's Quarles & Brady. Rexnord's general counsel is Patricia Whaley.

Earlier this month O'Melveny lost seven partners in New York--many of whom did work for Apollo--to Paul, Weiss, Rifkind, Wharton & Garrison. One of those partners, Gregory Ezring, also appears on an SEC filing by Rexnord for its IPO. Underwriters for the proposed offering have yet to be engaged.

Banco Santander Río: The Argentine unit of Spanish banking giant Banco Santander filed for a $100 million IPO on Thursday in a listing of American depositary shares. Banco Santander Río, the largest private sector bank in Argentina, plans to use proceeds from the offering to fund new acquisitions.

Davis Polk partner Nicholas Kronfeld is advising the Buenos Aires-based bank on its proposed public listing. Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz is serving as Argentine counsel to Banco Santander Río.

Cravath, Swaine & Moore partner David Mercado is representing underwriters led by Bank of America/Merrill Lynch, JPMorgan, and Santander Investment. Argentine counsel is being provided by Allende & Brea.

The companies below came to market within the past two weeks...

Sabre Industries: Despite being based in North Wales, Pa., Sabre Industries shouldn't be confused with the fictional printer company made famous by a certain Scranton-based sitcom. This Sabre makes steel towers, poles, and other structures for the wireless communications industry. The company comes to market this week with an IPO seeking to raise $91 million.

Julie Allen, cohead of the capital markets group at Proskauer Rose, is advising Sabre on its proposed IPO. SEC filings show that Sabre listed legal fees and expenses related to its IPO at almost $1.7 million. Winston & Strawn partners James Junewicz and David Sakowitz are representing underwriters on the offering led by Stifel Nicolaus and Oppenheimer & Co.

Solazyme: The San Francisco-based biofuel startup raised $198 million with its IPO on Friday. Davis Polk partner Alan Denenberg is advising Solazyme, whose general counsel is Paul Quinlan. SEC filings by the company show that it estimates $2 million in legal fees and expenses related to the IPO. Wilson Sonsini vice chairman Jeffrey Saper, who also advised on the LinkedIn IPO, and partner Allison Spinner are representing underwriters led by Goldman Sachs and Morgan Stanley.

Spirit Airlines: The Miramar, Fla.-based "ultra low-cost" carrier priced its proposed $100 million IPO at the low end of its range this week. Latham & Watkins partners Anthony Richmond and Robert Phillips are advising Spirit, whose general counsel since October 2007 has been Thomas Canfield. SEC filings show that the airline estimates $2.9 million in legal fees and expenses related to its IPO.

Cleary Gottlieb Steen & Hamilton partner Leslie Silverman is representing underwriters on the offering led by Citigroup and Morgan Stanley. David Elkins, a former senior partner at Andrews Kurth, serves on Spirit's board of directors.

The Asian Lawyer, a sibling publication, has the news on the legal advisers behind several Far Eastern IPOs, including Herbert Smith's role acting for MGM China on its proposed $1.5 billion Hong Kong offering.

Skadden is working on a $1 billion relaunch of Huaneng Renewables's IPO; Clifford Chance and Shearman & Sterling are working on a $3.6 billion IPO for Australian coal and iron ore company Resourcehouse; Orrick, Herrington & Sutcliffe is advising Billion Industrial Holdings on its $383 million IPO; and Singapore's Allen & Gledhill and China's Commerce & Finance Law Offices are handling Perennial China Retail Trust's $356 million public listing.

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