Simpson Thacher
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Simpson Thacher & Wilson Sonsini
Anthony Vernace, Alan Klein and Katherine Krause
Wilson Sonsini
Douglas Schnell, Martin Korman and Remi Korenblit
With the whole world watching, tweeting and scrutinizing, dealmakers from Simpson Thacher & Bartlett and Wilson Sonsini Goodrich & Rosati made sure Twitter and Elon Musk closed on the mogul’s $44 billion transaction to buy the social media giant.
Simpson’s Alan Klein, Anthony Vernace and Katherine Krause advised Twitter’s board, while Wilson Sonsini’s Martin Korman, Douglas Schnell and Remi Korenblit represented the company, reporting to the board.
“This was literally night and day for seven days a week for seven months,” Klein recalls, describing the high-pressure work, with Twitter’s lawyers spending thousands of hours to close it. “The hours were extraordinary for what should have otherwise been a relatively straightforward sale of a company.”
While the parties spent months making sure the deal closed, one of the first key moments was in late April, when Musk’s advisers sent Twitter a draft merger agreement. Normally an agreement takes many days or months to negotiate, Korman notes, but Musk was looking for Twitter’s signature in a day. “We decided to say yes, we were saying yes, but we need to make sure the contract worked for us,” Korman says. “We had one shot to mark up that agreement. There wasn’t time to go back-and-forth.”
Korenblit says the financing structuring of the deals were important, including “all the ways where Mr. Musk would be personally on the hook.”
“The entire transaction rose and fell on the terms of the contract, and this contract was by far the most seller-favorable contract of any major M&A transaction,” Klein says. “The night we signed the contract, I said this would be the most well-read merger agreement in history. And that was before all hell broke loose.”
After the parties signed, Musk, represented by Skadden, Arps, Slate, Meagher & Flom, continued to disparage Twitter and its executives and raised questions about the amount of fake or spam accounts on Twitter. “The bots are angry at being counted,” Musk tweeted in May. His poop emoji in a tweet made international headlines, seen as condemnation of CEO Parag Agrawal’s statements about addressing spam accounts.
After Musk sought to abandon the deal, Twitter brought suit against him in July to enforce it.
When Musk wanted to put the deal on hold, “we [spent] the next five and a half months getting him to do the things he had signed” in a definitive agreement to buy the company, Klein says, noting that there were only 18 days from March to October where things were “proceeding normally” in the deal.
Meanwhile, Musk’s tweets and the court battle in Delaware were “all happening under the tsunami of press and world attention, every hour of the day,” Klein recalls. “It’s hard to fully appreciate what it felt like being in the middle of a hurricane.”
Both law firms boasted of their close, cooperative relationship during the deal. “Our days would start and our days would end with calls,” Klein says, noting that “everyone’s ego was checked at the door.”
“We would get on a Zoom call” daily with 20 to 30 people, Korman says, referring to a group of lawyers and investment bankers. “We ended up being highly efficient at discussing, debating and deciding and moving along,” he says, adding that it was important to stay “focused on what was in the best interest of the company and the shareholders, not to let any of the public debate get in the way.”
Schnell says that it was the team’s “North Star” to close on the transactions with the price and terms that Musk agreed to.
The company’s lawyers didn’t miss a beat taking all the necessary steps to sell, such as getting regulatory clearance around the world and having a successful shareholder vote, despite all the theatrics after the deal signing.
As one example, Krause says, the day the company had a stockholder meeting to approve the transaction was the day a whistleblower was testifying in front of Congress about Twitter’s privacy controls.
“The strategic decisions were to move with alacrity so there would be no cause for delay,” Vernace says. “That was critical in keeping the pressure on the buyer so when they decided to ultimately capitulate and close the deal,” Twitter was all ready to close, he adds.
The closing of the deal became critical to the functioning of the M&A system, Klein says. “If at the end of the day, this deal hadn’t gone through on the terms we agreed to, it would have thrown into question the future functioning of the M&A ecosystem,” Klein says. “We were at the precipice and we were fortunate that the right outcome took place.”
—Christine Simmons
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Weil, Gotshal & Manges
Andrew Chizzik
When Andrew Chizzik and his team were tasked with helping Brookfield Asset Management form the largest private fund dedicated to the facilitation of a global net-zero carbon economy, they knew they had a daunting task ahead of them, but they chose to view it as an opportunity.
The $15 billion Brookfield Global Transition Fund, which attracted over 100 ESG-minded investors, focuses on clean energy investments in the transformation of carbon-intensive industries.
“The goal from the Brookfield perspective was to raise the largest transitions fund to date, and the largest first-time strategy to date,” says Chizzik, a private funds partner at Weil, Gotshal & Manges. “They set what we thought was an ambitious target to do that, and they ended up doubling that target.”
If the size and scale of forming the BGTF weren’t overwhelming enough for the 13-attorney team, the project was shrouded in regulatory challenges, such as navigating raising global capital under the Securities and Exchange Commission’s 506(c) rule, along with mastering evolving global ESG regulations, including the SEC’s “greenwashing” rules and Europe’s Sustainable Finance Disclosure Regulation (SFDR).
“The European regulatory regime was just unfolding at the time, and the obligations they’re under were still in flux. So we were figuring that out in real time,” Chizzik recalls. “And I think given the nature of the fund, as compared to more mature strategies, like private equity or real estate or infrastructure, there was less of a market. So there was a little bit more figuring things out as we go and trying to grapple with investor expectation and Brookfield expectation, as opposed to relying just on what’s market and what’s been done before.”
There was certainly a learning curve.
The team, which also had to grapple with working virtually amid COVID-19, was tasked with quickly becoming fluent in sustainability and carbon reduction protocols, including learning KPI reporting for carbon reduction and GHG accounting—all while simultaneously working on a number of other Brookfield flagship funds.
Challenges aside, Chizzik says the team was enthusiastic throughout the process, noting “the purpose of the vehicle is something that we all believe in separate and apart from the profit objective.”
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“There was a real excitement around the Weil private funds group about this particular fund and its mission, and excitement about [chair] Mark Carney’s participation on the Brookfield end and the in-house counsel that we work with at Brookfield,” Chizzik says. “I think everyone had the feeling internally that they were a part of something special, and I think that really added to the experience from the Weil side.”
According to Chizzik, the fund was a prime example of the importance of having passion for your work.
“Without that passion, the scope of the transaction together with the scope of the other projects we were doing for Brookfield at the time might have felt overwhelming,” he says. “But when you’re sufficiently passionate about what you’re working on, and you’re excited about it, and you love what you’re doing—I think that was the key to being able to successfully get to the end.”
—Sarah Tincher-Numbers
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Weil, Gotshal & Manges
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Ropes & Gray
Emily Oldshue
Ropes & Gray M&A partner Emily Oldshue led a more than 100-lawyer team that guided Pfizer through an $11.6 billion acquisition of the part of Biohaven Pharmaceutical Holding Co. it didn’t already own. The complicated transaction closed within five months and featured a pre-closing public spinoff and negotiation of a unique royalty payment stream.
“The whole thing was announced on May 10 and closed on Oct. 3, which I think no one thought was possible, given the complexity,” she says.
The transaction could have a lasting impact if the royalty structure is used in other transactions. Oldshue sees potential when valuation of assets is an issue, and she said it could be used most commonly in deals in the life sciences and technology sectors.
“Time will tell whether we see more of these SpinCos to solve valuation issues. For the royalty structure to work, you need a spinoff entity,” the Boston-based partner explains.
Pfizer initially negotiated a licensing agreement with Biohaven to sell its migraine therapy outside of the U.S. The migraine treatment and preventative is sold as Nurtec ODT in the U.S. But Pfizer ultimately decided in early 2022 it wanted to negotiate a deal to acquire Biohaven’s migraine assets, and to separate them from the company’s early-stage assets, Oldshue says.
At that point, Oldshue notes, the Ropes team she led concentrated on two components—antitrust and the spinoff of Biohaven’s early-stage assets into a new company. To make the spinoff work, they negotiated the novel royalty structure, which will provide shareholders in the spinoff the right to receive tiered royalties from Pfizer on annual net sales of the migraine treatment in the U.S. in excess of $5.25 billion.
That royalty structure provides the new spinoff entity, a public company, with royalty payments over a 10-year period. The spinoff occurred right before the acquisition closed, and Biohaven and its migraine assets became a wholly owned subsidiary of Pfizer.
Lawyers at Ropes had worked on the licensing agreement for Pfizer, but Oldshue says she got involved in March of 2022. She built a team of more than 100 Ropes lawyers from 10 offices working on structuring, M&A, capital markets, licensing, regulatory, litigation and enforcement. They were in constant contact, Oldshue says, to solve issues as they came up.
Oldshue led the negotiation of the definitive agreements for the acquisition and the spinoff, and the negotiation of the novel royalty structure. It’s the kind of work she enjoys.
“I love the subject matter of these pharmaceutical deals,” she says. “That’s what I love being good at—building the right team, and how to execute on the big vision.”
—Brenda Sapino Jeffreys
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Ropes & Gray
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Wachtell, Lipton, Rosen & Katz
David Karp, Viktor Sapezhnikov, and Ron Chen
It was through a highly publicized failed deal that a team of lawyers at Wachtell, Lipton, Rosen & Katz forged a bond with client Broadcom so deep that the firm has been called in on several large deals since, including the company’s pending $61 billion acquisition of software company VMware.
Wachtell aided Broadcom in its bid to acquire Qualcomm, but the deal was scuttled by the Trump Administration. The semiconductor company didn’t want to give up on its goal to grow into other offerings, such as software. So the Wachtell team, led by David Karp, Ronald Chen and Viktor Sapezhnikov, helped it acquire CA Technologies in a $19 billion deal in 2018 and was brought in to guide Broadcom through the larger, more complex VMware deal last year.
“Part of their business strategy is M&A, so we feel like core partners in what they do,” Karp says, noting Broadcom’s CEO, general counsel and other strategists are working directly with them on these deals.
Given VMware was spun out of Dell Technologies about six months before this deal was inked, there were significant tax implications the Wachtell team had to work through to ensure they didn’t approach VMware within six months of the spinoff, but that they created a plan to allow VMware to move very quickly once a bid was made.
Michael Dell and Silver Lake combined to be 50% shareholders in VMware and Karp said the team worked hard to ensure the deal treated all shareholders equally and wasn’t held up by any special treatment for those shareholders that would have led to the need for separate committees and voting.
While other deals certainly allow for the target company to shop around for better offers before signing an agreement, Wachtell and Broadcom included a go-shop provision in this deal that allowed VMware to look for a better deal after the agreement was signed—a rare component of a strategic acquisition like this one.
“Putting our client in a position to move quickly by making it easy for the other side to move quickly was a huge value add,” Karp says of the Wachtell team’s role.
On top of the other structural hurdles, the half-stock, half-cash transaction included an “extremely large bank commitment” of $32 billion, Karp notes, adding there were some unique risk-sharing features of that financing.
At Broadcom, the senior leadership, up to and including CEO Hock Tan, general counsel Mark Brazeal, head M&A lawyer Connie Chen and lead M&A strategist Ric Chi, have a vested interest in knowing the businesses they are
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acquiring and how it actually works, Karp says. That meant that, despite the quick timeframe, teams of Wachtell lawyers were reviewing VMware’s largest contracts to understand the nuance of how the company does business and reporting that back to the CEO.
The deal is expected to close later this year. While Broadcom faced regulatory hurdles in its Qualcomm bid, the company sees an easier path forward in expanding in adjacent areas such as software, Karp says.
—Gina Passarella
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Wachtell, Lipton, Rosen & Katz
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Sullivan & Cromwell
Frank Aquila, Ari Blaut and Davis Wang
Guiding the largest deal of 2022 in the hot life sciences vertical, the $28.5 billion buy of Illinois-based (and through inversion also subject to Irish law) Horizon Therapeutics by longtime Sullivan & Cromwell client Amgen was no walk in the park for deal lead Frank Aquila and his team.
Aquila, who has been working with Amgen for over 15 years, said the deck was already stacked against Amgen coming in.
Prior to Aquila’s involvement, Amgen competitor Sanofi had made an unsolicited bid to take over Horizon but was rebuffed. Twice. A third effort, however, caught Horizon’s eye, and the company went through a market check to see what options were available.
Those options included Johnson & Johnson as well as Amgen. After Johnson & Johnson dropped out, that left Amgen and Sanofi for the prize.
“We had to do a considerable amount of work quickly, as Sanofi had been in there a while,” Aquila recalls. “What they did over several months, we had to do in two weeks.”
While Horizon (represented in this transaction by Cooley) is a U.S.-based company, it was one of the companies that made Ireland a second home around a decade ago through inversion, subjecting the company to the Irish Takeover Code, which has additional requirements.
“Since the company was inverted, you are acquiring both a U.S. and a non-U.S. company,” Aquila explains. “Davis Wang (co-head of S&C’s tax group) was very much in the middle of it, making sure Amgen was aware of all the different tax impacts and everything was structured in a way where there were no adverse tax issues.”
On top of all that, Aquila points out, 2022 wasn’t the greatest year for raising financing, adding a further obstacle to their work.
In order to get this done, S&C had up to 70 attorneys in tax, executive compensation, IP and other areas working through five offices in New York, Washington, D.C., Palo Alto, London and Brussels. That manpower produced, by Aquila’s estimate, about 15 different workstreams he needed to monitor.
Aquila said his long-standing relationship with Amgen helped aid the process.
“One of the reasons we were able to move as quickly as we were able to is we have worked closely with Amgen for many years,” he said. “We know what they need us to do and how they need information prepared for their internal use. There are synergies between the two teams.”
The result was the largest acquisition in Amgen’s history and the largest life sciences deal of 2022.
—Patrick Smith
Sullivan & Cromwell
Jamie Rector for ALM
Munger , Tolles & Olson
Jennifer M. Broder, Robert E. Denham, and Brett J. Rodda
Warren Buffett believes time is an enemy.
So when Munger, Tolles & Olson received word of Buffett’s proposal, on behalf of Berkshire Hathaway, to buy Alleghany Insurance for $11.6 billion in cash last March, the team mobilized at lightning speed.
“We knew something was up but we didn’t get the details until the 13 or 14 of March,” recalled Munger partner Brett Rodda, who represented Berkshire along with fellow corporate partners Bob Denham, Jennifer Broder and Tyler Hilton.
“We buckled down and got the deal announced by March 21,” Rodda said. “The real work was all done over the course of one week.”
The timeframe was far from typical, but Munger was well-qualified for the task, having a longstanding relationship with Berkshire. The firm represented Berkshire in its landmark $44 billion acquisition of Burlington Northern Santa Fe in 2009, among others.
Complicating the deal for Alleghany was the company’s public listing. For most public company deals, the law requires the seller’s board to hire bankers and “go shop” the company to get the best price. As a result, Munger’s lawyers incorporated a three-week go-shop provision into the deal to enable the board to fulfill its fiduciary duty.
“Warren knew Alleghany wasn’t for sale and hadn’t sampled the market,” Rodda said. “He knew they’d have to ‘go shop’ the company or have a fiduciary out. So he said go for it.”
“They had the chance to find a better deal, and if they did, Berkshire would match it or walk away,” he continued. “Presented that way, it felt like a package that Alleghany would accept.”
Another unique element of the deal was an offer price inclusive of the bankers’ fee paid to Goldman Sachs to search for other buyers. Munger’s team structured a flat-fee arrangement so that the fee could be deducted from the amount Berkshire was otherwise willing to pay shareholders.
That level of transparency with respect to the bankers’ fee is incredibly unusual, Rodda said. But it was coupled with an unusually simple deal when it came to other terms—there was no termination or reverse termination fee or fiduciary out because of the go-shop provision.
The deal was Berkshire’s first major acquisition since 2016. After clearing numerous regulatory hurdles, the deal closed in October 2022.
—Jessie Yount
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Sidley Austin
Mehdi Khodadad
Paul, Weiss, Rifkind, Wharton & Garrison
Marco Masotti And Matthew Abbott
One of the biggest deals in the history of sports closed in just 89 days amid oligarchs, sanctions, uncommon buyer requests, and the oversight of multiple governments.
It took lawyers from Paul, Weiss, Rifkind, Wharton & Garrison and Sidley Austin for client Clearlake Capital, along with Latham & Watkins on behalf of an investor group led by businessman Todd Boehly, to shepherd a consortium of investors who took ownership over the storied Chelsea Football Club.
Sidley Austin's Mehdi Khodadad along with Paul Weiss’ Marco Masotti and Matthew Abbott represented the private equity firm on the M&A, financing and compliance aspects of the $3.1 billion deal.
Russia invaded Ukraine on Feb. 24, 2022, immediately calling into question the ownership of Chelsea by billionaire Russian oligarch Roman Abramovich, who purchased the club in 2003 for 140 million pounds. Since then, Abramovich loaned the club $2 billion in an expensive ownership streak that saw it win five Premier League titles and two European Championships at the cost of weekly losses averaging 900,000 pounds. Before Abramovich was officially sanctioned by the U.K. government on March 10, prospective buyer and Swiss billionaire Hansjörg Wyss told Swiss newspaper Blick that Abramovich was looking to offload the club—quickly.
“Our counterparty wasn’t just Chelsea, but the U.K. government, which reviewed every deal term to ensure that Mr. Abramovich, a sanctioned individual, wouldn’t receive any economic benefit from the sale,” says Abbott. “A major challenge for our client Clearlake was to make certain that the agreed-upon terms carefully avoided triggering any potential sanction-related concerns.”
Khodadad notes the U.K. government also put pressure on the deal, allowing Chelsea to operate under a special license until the end of May while it got to work auctioning off the club.
"As longtime deal counsel for Clearlake leading over 50 deals in 2022 alone, I was able to step in quickly and orchestrate a deal structure ... that would achieve their business objectives within the tight timeline prescribed by the U.K. government," says Khodadad.
Clearlake formed a consortium of investors interested in purchasing the team, whose sale proceeds would support victims of the war in Ukraine. The group also included Boehly and Mark Walter—co-owners of the Los Angeles Lakers and the Los Angeles Dodgers—and Wyss. With Boehly and Clearlake sharing control and governance of the club, the consortium went up against
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more than 200 other bidders and eventually was included in the final four contenders.
The deal was one of the first by a private equity fund in a major sports team and its terms were unique for such an investor. The new owners could not take management fees, dividends, or take on substantial debt, nor could they sell the team within 10 years. They also had to agree to make an additional $2 billion investment in the team to support the team foundation, the women’s team, and the 1 billion pound overhaul of Stamford Bridge stadium.
“Clearlake Capital was investing a private equity fund, which typically have finite lives,” says Masotti of Paul Weiss. “An important aspect in positioning Clearlake as the preferred bidder was ensuring that both Chelsea and the U.K. government understood that Clearlake was committed to the team for the long term.”
The deal closed May 28, 2022, just before the team’s temporary operating license was set to expire.
—Dan Roe
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Matt Greenslade/photo-nyc.com
Sidley Austin & Paul Weiss
Munger, Tolles & Olson
Tucker Images for Latham & Watkins
Latham & Watkins
George Davis and Jeff Bjork
For Latham & Watkins client Mallinckrodt, the pharmaceutical company’s existence was on the line. A successful Chapter 11 restructuring was essential to the multinational’s survival.
The “dizzying” amount of moving elements included the trillions of dollars in asserted liability Mallinckrodt faced from public and private claimants, such as the $5 billion in funded debt and contingent liabilities stemming from thousands of opioid-related litigations.
Latham’s team, led by George Davis in New York and Jeff Bjork in Los Angeles, battled significant hurdles in organizing the plaintiffs’ requests. Logistical challenges arose as the plaintiffs included multiple states, thousands of municipalities, Native American tribes and other organizations and individual claimants, Davis recalls.
Despite this, in February 2020, the firm managed to strike a deal in principle for Mallinckrodt, with the major governmental opioid claimants to consider a targeted bankruptcy filing by only particular Mallinckrodt subsidiaries.
“The company and plaintiffs would have preferred the elegance of a subsidiary restructuring as a solution,” Davis says, but headwinds soon changed and a strategy shift was required following litigation outcomes surrounding the company’s Acthar rebates, funded debt maturities and the backdrop of the pandemic.
Devising a broader-scope filing was then on the agenda, putting together a reorganization that allowed for emergence in just 20 months as the first company to permanently resolve global opioid litigation, including any future claims.
In a first for opioid bankruptcies, the claim involved filing with a restructuring support agreement with institutional creditors, which paved the pathway for private opioid claimants’ support. Davis and Bjork encouraged all parties toward resolution without disrupting earlier settlements.
The case marked the first opioid bankruptcy where a future claims representative was named to look out for future claimants’ interests, with the settlement proceeds being used by states, municipalities and tribes for abatement programs to address the opioid crisis.
“We wanted a clean break from opioids, so that’s why we decided to include a future claims representative to achieve a comprehensive solution,” Davis says. With all of the restructuring’s moving elements, including the vast array of plaintiffs, as well as an antitrust trial taking place in the middle of the proceedings, Davis says that “I don’t think you can find a case like this.”
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By achieving a prenegotiated Chapter 11 to address mass tort claims stemming from both public and private claimants, as well as significant funded debt deleveraging, the case could potentially provide a guide for future mass tort cases.
“Negotiating the deal up front and having the plaintiffs’ support to implement the deal through a bankruptcy to obtain a comprehensive channeling injunction rather than filing for bankruptcy without any agreement, that’s the element that should be used for future cases,” Davis says.
—Charlotte Johnstone
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Latham & Watkins
Ryland West/alm
Kirkland & Ellis
Doug Bacon and Roald Nashi
You can use numerous high-level metrics to measure the impact of a deal. Time spent. Resources required. Dollar value. But when you get a shout-out in the president’s State of the Union speech, odds are, you’ve done something big.
Such is the case with Kirkland & Ellis’ work on a first-of-its-kind joint venture between Brookfield Infrastructure and Intel to construct, develop and run a chip-making foundry in Chandler, Arizona. The $30 billion deal, which united one of the largest private infrastructure investors in the world with the world’s largest semiconductor chip manufacturer, took six months and involved roughly 50 of the firm’s lawyers. President Joe Biden cited the deal as an example of how the $280 billion CHIPS and Science Act was beefing up the domestic tech supply chain—and helping Intel create “a literal field of dreams” with new domestic factories.
What made the deal especially complex and groundbreaking, says Kirkland debt finance partner Roald Nashi, is that it was financed like infrastructure rather than a manufacturing project.
“Why is that important? Why would you want to do that?” Nashi asks. “By doing what we did, we were able to raise infrastructure-like debt, which is much cheaper debt than you would otherwise access in capital markets, so investment leverage is much lower. So, that is the exercise that I don’t think had quite been done before.”
Nashi says Brookfield, a long-time client, came to Kirkland with just a sketch of what it wanted to do— Intel wanted to build a semiconductor chip factory, and the CHIPS Act was a component of its investment, but they also wanted to raise private capital separately through a joint venture agreement.
“It was a blank canvas otherwise,” Nashi says.
The lawyers prepared four or five structures that got “refined, refined, and refined,” with specialists at the firm in real estate, tax, IP, environment and other areas also lending hands. Doug Bacon, a partner in M&A and private equity who also spearheaded the deal, says the process involved “hundreds of decision points.”
“You factor in the political framework, the policy objective, the focus of the transaction from a national strategic interest perspective, the fact it was very public, and in addition to that, breaking new ground, as Roald describes, in the way you think of financing a transaction like this—it just required a really, really first-rate effort across so many different disciplines to execute that transaction,” Bacon says. “The more moving pieces, the more risk, the more chances for failure. And on this one, the needle was thread multiple times around different challenges to accomplish the goal.”
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Nashi adds the deal may well have kickstarted a trend when it comes to deploying infrastructure solutions and debt to capitalize projects that haven’t been traditionally thought of as infrastructure. “It’s the start of something big within infrastructure investment,” he says, adding: “It’s attracted a lot of attention from some of the top players in this field. Not just in manufacturing, but broadly, in automotives, software and technology. Infrastructure solutions have a large role to play in that regard.”
—Andrew Maloney
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Kirkland & Ellis
Diego M. Radzinschi/ALM
Hogan Lovells
David Bonser and Stacey McEvoy
In what analysts called the largest commercial real estate sale since the start of the pandemic, Hogan Lovells represented industrial REIT Duke Realty in its $26 billion all-stock acquisition by rival Prologis.
Negotiations took an unexpected turn last May when Prologis published a letter detailing the terms of its rejected acquisition offer in what was beginning to look like a hostile takeover of the target, say Hogan Lovells partners David Bonser and Stacey McEvoy. At that point, Duke engaged a 28-lawyer team at Hogan Lovells, which had previously advised the company on significant transactions.
While the transaction would eventually close in October, lawyers involved in the deal say Prologis’ May surprise threw their client “off kilter.”
“It’s one of those situations where when that letter comes out, you really have no idea where it’s going to go,” Bonser says. “Our client could have said we still are not able to sell the company at this price. Who knows what Prologis would have done in response to that?”
After Prologis’ public offer and Duke’s public rejection, the parties resumed private, separate discussions before Prologis came back with a “sweetened” offer, Bonser and McEvoy say. Ultimately, a merger agreement was executed June 11, with Prologis agreeing to an all-stock acquisition of Duke Realty for $26 billion.
In its public offer, Prologis offered Duke stockholders 0.466 shares of Prologis common stock for each share of their Duke stock, but this exchange rate was altered to 0.475 over the course of negotiations, according to a June 13 announcement.
The time it takes to reach an agreement in publicly traded company deals varies widely, often taking around 30 days, according to McEvoy. In the case of the Prologis-Duke deal, negotiations had to be expedited to roughly nine days in order to avoid another public disclosure.
“When something is known to the public that a deal may be possible, there was additional sensitivity about there being leaks about the deal happening around the same time,” McEvoy says.
McEvoy says a non-disclosure agreement for certain aspects of the deal, which included a standstill agreement, marked a “turning point” for the transaction to become “consensual” for Duke rather than a hostile takeover. Lawyers say Prologis’ signing of the NDA signaled the company’s willingness to cease playing out the transaction in public.
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“Once you get to a standstill agreement and you’re ready to move forward, it does change the dynamic because now you’re both trying to get to a deal versus one party trying to force another party,” Bonser notes. “Signing that signaled their willingness to stop playing out the business transaction in public. That’s when our client became very serious about, ‘OK, let’s try to get a deal done here.’”
—Justin Henry
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Hogan Lovells
Diego M. Radzinschi/ALM
Freshfields Bruckhaus Deringer
Paul Tiger
When Google wanted to fortify its cloud security services with cybersecurity firm Mandiant, it looked no further than enlisting Freshfields Bruckhaus Deringer’s head of U.S. transactions, Paul Tiger.
The $5.4 billion acquisition has altered the cybersecurity field for years to come. After Russia’s invasion of Ukraine, tech companies all over began to look inward at their own security systems as concerns began to spread that cyberattacks could become more commonplace.
Google, one of the largest tech businesses in the world, wanted to make sure that its data was protected from such attacks. But it wasn’t the only one. Once Microsoft announced plans to acquire Mandiant in February 2022, Google quickly jumped into the race.
Tiger and his team were racing against the clock to sign the transaction while dodging media reports about Microsoft, given that both companies wanted exclusivity to the cybersecurity firm.
Mandiant, a publicly traded company, had preferred stock options owned by investment firm Blackstone and other private equity sponsor holders of convertible preferred stock of the company. As part of the deal with Mandiant, the company needed two things from Google: to be a closer of their preferred stock instead of Blackstone and to retain the company’s CEO Kevin Mandia.
Tiger worked alongside Google’s in-house team to meet these needs. He navigated negotiations between Blackstone counsel, Mandiant’s team and Mandia to make sure all parties were satisfied with the deal.
Blackstone was cashed out as part of the deal to limit Google’s regulatory commitments. In exchange for this, reverse termination fee structure was applied and they signed up Mandia to a noncompete—something rarely seen in public company M&A deals.
Tiger and Google’s in-house team put this deal together in an impressive 30-day span after reports were released that Mandiant was nearing the finish line to sell to Google’s competitor Microsoft.
He and his team worked tirelessly to make sure they satisfied Google’s three criteria for successful execution of the deal: speed, confidentiality and exclusivity.
The deal is the first of many acquisitions analysts expect to see in this sector. This is Google’s largest acquisition in more than a decade. As one of the top three providers of cloud-based services, along with Amazon and Microsoft, Google has housed the Mandiant brand under its Google Cloud unit, Tech Crunch reported.
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“Combining Google Cloud’s existing security portfolio with Mandiant’s leading cyber threat intelligence will allow us to deliver a security operations suite to help enterprises globally stay protected at every stage of the security lifecycle,” Google Cloud CEO Thomas Kurian said at the time of the deal.
Neither Tiger nor Freshfields commented on the work.
—Victoria Ostrander-Garvine
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Adam DeTour for ALM
Goodwin Procter
Lisa Haddad and Stuart Cable
In January 2022, when Elliott Investment Management looked to buy software company Citrix in partnership with Vista Equity Partners, Goodwin Procter’s Stuart Cable and Lisa Haddad answered the call, navigating a growing array of global regulations and a volatile credit market to craft one of the largest private-equity-backed acquisitions of a software company in history, valued at $16.5 billion.
Of particular interest to this deal is Elliott Investment Management’s past relationship with Citrix. Six years prior to acquiring Citrix, Elliott held a position in the company and settled an activist challenge by placing one of its partners on Citrix’s board of directors.
However, it was the reach of both firms, which own companies across the globe, that provided the most significant challenges to Cable and Haddad in helping organize the acquisition. Vista additionally contributed their company Tibco to the deal, merging Tibco and Citrix into a group called Cloud Software Group, rather than paying principally in cash. Although Tibco and Citrix were not competitors, Cable and Haddad were responsible for helping Elliott and Vista navigate antitrust laws.
“Companies like Vista and Elliott own software companies all over the world. In order for regulators to do their job, they not only have to look at Citrix and Tibco as competitors but also other companies owned by Vista and Elliott,” explains Cable.
Another result of the acquisition was that the transaction now had to abide by a vast array of global regulations as well as domestic ones.
“The regulatory world has turned decidedly global, not only with antitrust but with foreign direct investment rules,” says Haddad. “They have a wide sense of jurisdiction as well.”
Traversing the sea of global regulations delayed the close of the acquisition. According to Cable, “the deal took longer than any of us anticipated, not because of any substantive problem but because we had to be patient while we worked through jurisdictions. The final one to clear was Australia, which we never would have predicted at the outset.”
But the deal’s complications did not end there. “The credit market took a significant turn for the worse,” says Cable. “The combination of the regulatory piece and the turn in the credit markets created quite a runway between when we opened the transaction and when it closed.”
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In spite of these complications, Cable and Haddad were able to close the transaction in September 2022, nine months after Elliott announced the acquisition. They attribute the deal’s success, in part, to their institutional knowledge of Citrix, whom they have worked with for 43 and 24 years, respectively. “We knew the ins and outs of the company, which allowed us to really help them through this process,” says Haddad.
—Amanda O’Brien
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Freshfields Bruckhaus Deringer
Goodwin Procter
ryland west/alm
Davis Polk & Wardwell
Will Pearce
Davis Polk & Wardwell
Len Kreynin
When a consortium led by Elliott Management and Brookfield sought to jointly acquire Nielsen Holdings, the list of obstacles was long—from the sheer size of the deal to the multijurisdictional contractual arrangements and a blocking shareholder that resulted in a rejected first offer.
But the $16 billion acquisition was ultimately closed through the help of careful communication and bringing an opposing shareholder into the consortium.
Richard Birns of Gibson Dunn led for Elliott, along with Mark Bardell and Gavin Davies from Herbert Smith Freehills in the U.K., while Len Kreynin of Davis Polk helmed the ship for Brookfield’s U.S. team, working alongside Will Pearce in the U.K. The result of the coordinated effort was to close the second-largest leveraged buyout of 2022. The consortium equity commitment of $5.7 billion contributed to the acquisition’s fully committed financing.
“It was a good example of how teamwork and communication really helps advance the collective clients’ interest during complex situations,” Birns says. “Everybody got along, everybody was rowing in the same direction and everybody was communicating with one another. It really led to an optimal environment for putting good strategies before the client so that they could make important decisions about how best to proceed.”
With Nielsen Holdings being U.S. listed, and therefore falling outside of the scope of the U.K. takeover code, the firm needed to follow a U.S.-style implementation agreement for the acquisition, which was governed by U.S. law.
But with Nielsen being U.K. incorporated, it also meant the deal was subject to U.K. court approval pursuant to a scheme of arrangement. Pearce says that “schemes of arrangement of U.K. companies listed in the U.S. always raise some interesting corporate law issues as a result of the way U.K. shares are held and traded in the U.S.” Navigating these complex contractual arrangements proved a significant challenge for the firms to overcome.
Birns notes the structure basically required a supermajority vote, so when a large shareholder publicly threatened to block the deal, the consortium needed to figure out a way to proceed.
After one failed bid, the team negotiated the intricate situation and rewrote the offer terms at the last minute to overcome the opposition from the activist shareholder. Afterward, the blocking shareholder moved to join the consortium and voted to approve the deal. Pearce affirms “the deal closed on a consensual basis allowing all investors access to the premium bid price.”
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Like Birns, Pearce also notes the benefits of the firms working together, citing the interesting work they did “engaging in the game theory with our consortium partner and their counsel” on the approach the opposing shareholder might take, as well as considering “the tools available to the consortium and the target under U.K. law.”
While the multijurisdictional deal presented some challenges, Pearce says the deal “afforded advisers a little more creativity to use tools from both markets.”
For Birns, Nielsen was one of two major deals he helped Elliott secure in 2022 alone (the other being Vista and Elliott's $16.5 billion purchase of Citrix). These deals follow a string of transactions Birns has guided Elliot through since the company announced its private equity initiative.
—Charlotte Johnstone
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Ryland West/alm
Ryland west/alm
Paul Hastings
Eduardo Gallardo
The climate in the boardroom of Aerojet Rocketdyne took a turn for the worse after Lockheed Martin abandoned a $4.4 billion bid to acquire the rocket engine maker in February 2022. Executive chairman Warren Lichtenstein, the founder of private equity shop Steel Partners, had landed a seat on the board a number of years earlier as a result of activist intervention, and in subsequent years, he and Steel had succeeded in appointing three allies to the eight-member board.
His faction and a rival group of four, led by Aerojet CEO Eileen Drake and three independent directors, dug in, both seeking to elect a full slate of directors who’d be in alignment about the company’s future. The even split, however, meant that neither side could marshal company resources to launch a proxy contest.
But the two sides weren’t on an even playing field, according to Paul Hastings M&A global co-chair Eduardo Gallardo, who represented Drake’s faction in the tussle. Lichtenstein’s group had the financial backing of a hedge fund, while his side didn’t.
“The strategy on part of the activists was, ‘Let’s drag it out,’” Gallardo says, a position that entailed refusing to call for an annual meeting in which both sides would be obligated to present a slate for shareholders to vote on.
Gallardo looked at the bylaws and realized he could solicit the company’s shareholders to force a special meeting for a vote, at the time and date of their choice.
“Once we implemented that strategy, it was game over for the other side,” Gallardo says.
That didn’t mean that courting the shareholders was effortless. Gallardo and Drake’s faction visited with the company’s large institutional shareholders and proxy advisers ISS and Glass Lewis, who were ultimately supportive of their cause. When the special meeting did take place, Drake and her slate received over 75% of the votes.
But along the way, there was significant fresh ground to tread, both for Gallardo and other experts in corporate governance.
“Who controls the way that material gets sent to shareholders? Who calls the meeting when the board is deadlocked and cannot agree on a date for an annual meeting? Those were all issues of first impression,” he says.
And just because this scenario had never unfolded in the past doesn’t mean it won’t happen again elsewhere, perhaps following another failed merger or as a result in any other shift in business plans.
“It’s a cautionary tale,” Gallardo says. “For most companies, nothing like this would ever develop. But dynamics in the boardroom change.”
—Dan Packel
Gibson, Dunn & Crutcher and Davis Polk & Wardwell
Paul Hastings
Ryland west/alm
Proskauer Rose
Brian Rosen
Last March, Puerto Rico exited the largest public debt restructuring in U.S. history with the help of Proskauer Rose’s Brian Rosen. But Rosen, one of the lead partners on the case, says getting through the complexities of the years-long case took over 400 people.
The massive team took on the task of addressing over 170,000 claims from creditors totaling about $44 trillion, setting out to bring that number down into the millions.
Although the case still has some loose ends to tie up, the group views the enormous progress as a victory. “We’re very proud of the work that we’ve done here,” Rosen says. “We think of it as a tremendous success.”
But it wasn’t easy to get to this point.
Rosen himself was not new to the idea of massive bankruptcy cases, having acted as lead counsel for the bankruptcies of Enron and Washington Mutual.
But even with his experience, the case presented Rosen with novelties, on everything from language issues to the interpretation of entirely new legislative schemes.
“Besides boning up on my high school and college Spanish, I learned a lot,”
he says. “I learned a lot about public debt instruments because I had not really trafficked in that world before. I learned a lot about how those municipal
markets work.”
The first new concept was the interpretation of the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA. The new law birthed
the Financial Oversight and Management Board of Puerto Rico, who was
Rosen’s client.
Rosen argues that PROMESA was unprecedented, making its interpretation “difficult and novel.”
Besides the new law, his team had to help the new board tackle a multitude
of issues.
The territory’s debt crisis, which began in 2014, triggered the monoline
insurers of Puerto Rico’s debt to go bankrupt after paying huge premiums.
Then, the island issued more debt during the crisis, prompting litigation in which plaintiffs accused Puerto Rico of passing its constitutional debt limit.
Another issue was paying out eminent domain claims the island owed.
“When you do a restructuring, I always view it as a giant jigsaw puzzle,” Rosen says. “You really have to put all the pieces together and they all have to work.”
Rosen expects the puzzle to be completely finished by this summer, and he’s expecting that multitrillion-dollar price tag to go down to the $300 million range.
Rosen says the island is on track to regain access to capital markets so it can start raising money once again.
—Alexander Lugo
Proskauer Rose
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Richard J. Birns
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