The Work

July 1, 2011 3:26 PM

Game On: Cooley, Ropes & Gray Grab Roles on Zynga's $1 Billion IPO

Posted by Brian Baxter

Zynga Game Network became the latest Silicon Valley darling to strut its stuff in public on Friday when the world's largest developer of games for social media networks filed for a $1 billion initial public offering.

San Francisco-based Zynga follows other high-profile IPOs in the technology sector this year by such companies as LinkedIn, Groupon, and Pandora.

Sibling publication The Recorder reported in May that Cooley had the inside track on handling represent Zynga on its IPO. And The Recorder, which notes that Cooley has done previous work for the online game maker, reported on Friday that the firm has indeed picked up the work advising the company as it pursues its official market debut. 

Cooley national business practice chair Eric Jensen and partners Kenneth Guernsey and John McKenna are leading a team from the firm advising on the Zynga IPO. Other members of the San Francisco– and Palo Alto–based team include corporate partner Peter Werner, employee benefits partner Wendy Davis, and tax partner Mark Windfeld-Hansen.

With the IPO market getting hot again, Cooley's capital markets practice has been busy. In an e-mailed statement, the firm said it has advised on four completed IPOs this year and that it is working on another ten that have filed but not yet closed. Those transactions included a Jensen-led team's representation of underwriters on the LinkedIn IPO, which valued the professional networking company at more than $4 billion.

Cooley's in-house connections may help helped the firm land the Zynga assignment. One lawyer listed on the company's S-1 filing with the SEC, deputy general counsel Karyn Smith, was a Cooley partner from 1992 to 2002. (Other Zynga lawyers listed on the filing are Devang Shah and general counsel Reginald Davis, a former partner at Hancock Rothert & Bunshoft, which merged with Duane Morris in 2006.)

Davis is one of several Zynga executives that stand to see a substantial payday from the IPO. The company's S-1 filing reveals his total compensation in 2010 to be nearly $4.8 million. (Davis received $200,000 in salary, bonuses totaling $615,000, and more than $3.9 million in stock.)

Unlike some tech companies that have gone public, Zynga, founded in 2007 by Internet entrepreneur Mark Pincus, appears to have little problem making money. The company's S-1 filing states it has $995.6 million in cash on hand, thanks to the success of online games like CityVille, FarmVille, and Mafia Wars.

According to the S-1 filing, legal fees and expenses related to the offering are not yet available. Proceeds from the IPO will go to "general corporate purposes, including working capital, game development, marketing activities, and capital expenditures."

Ropes & Gray corporate partners Keith Higgins in Boston and Brian Erb in San Francisco are representing underwriters Bank of America/Merrill Lynch, Barclays Capital, Goldman Sachs, JPMorgan Securities, Morgan Stanley, and Allen & Company.

Erb represented Zynga last December when the company acquired social gaming developer Newtoy, which makes the Games With Friends line. Ropes had previously advised Zynga on its acquisition of Cambridge, Mass.-based Conduit Labs in August.

Ropes's Higgins led a team from the firm earlier this year that represented underwriters on a $175 million IPO for public car-sharing service Zipcar.

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