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November 7, 2011 7:28 PM

Dorsey Gets Call for Best Buy Takeover of IT Company

Posted by Brian Baxter

Best Buy tapped Dorsey & Whitney to advise on the $167 million takeover of IT company MindShift Technologies, one of two strategic deals announced by the big-box electronics retailer Monday. 

Best Buy also announced that it plans to buy out its partner in a U.S. cell phone joint venture for $1.3 billion. The company has yet to bring in outside counsel for that transaction. 

Dorsey & Whitney is a frequent outside legal adviser to Richfield, Minnesota-based Best Buy, the world's largest consumer electronics retailer. SEC filings by Best Buy show that Dorsey corporate partners John Marsalek and Matthew Knopf in Minneapolis are advising the company on its purchase of MindShift, which will be integrated into Best Buy's Geek Squad and Best Buy for business services.

Marsalek led a team from the firm representing Best Buy last month on its sale of music-sharing service Napster to on-demand music Web site Rhapsody. Dorsey previously advised Best Buy on the formation of a technology cooperative in 2004.

Michael Lincoln, a venture capital and M&A partner at Cooley, in Reston, Virginia, is representing MindShift on its sale to Best Buy. The acquisition of MindShift, based in Waltham, Massachusetts, which provides customers with remote IT services, will allow Best Buy to compete in an increasingly crowded marketplace for on-demand IT services, according to The Wall Street Journal.

Best Buy hasn't yet retained outside counsel for its $1.3 billion cash bid for full ownership of a U.S. cell phone joint venture with The Carphone Warehouse Group, says Best Buy’s associate general counsel and chief compliance officer Todd Hartman.

Best Buy simultaneously announced that it will close 11 stores in the United Kingdom that employ about 1,000 people, Bloomberg reports. The retail giant opened the stores in the U.K. only two years ago, but a drop-off in demand for electronics like DVDs and flat screen televisions coupled with a weak European economy hurt the venture.

Reuters reports the buyout and store closures are part of a larger strategy by Best Buy to take advantage of the growing market for mobile phones, while scaling back its overseas operations and focusing on the domestic market in the United States. The company is facing domestic pressure from competitors like Amazon.com.

Hartman is working on the deal along with Best Buy general counsel Keith Nelsen, who took over as the retailer's top in-house lawyer in May after the retirement of predecessor Joe Joyce. Hartman says outside counsel could be brought in for the deal's closing sometime later this year.

Tim Morris, general counsel for London-based Carphone Warehouse, is advising the company on the transaction. As part of the deal, both Carphone Warehouse and Best Buy will have the option of buying out the other's 50 percent stake in their other European joint venture, Best Buy Europe, by 2015.

 

 

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