MoFo Lands on Two $1.5 Billion M&A Deals

, The Am Law Daily

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VMware CEO Pat Gelsinger
VMware CEO Pat Gelsinger

UPDATE, 1/23/14, 6:00 p.m. EST: The names of Roschier attorneys advising Rautaruukki on its sale to SSAB have been added to this article's final paragraph. The name of the Morrison & Foerster attorney advising SSAB on antitrust matters has been added to the article's eleventh paragraph.

Morrison & Foerster landed lead roles on two separate M&A transactions announced Wednesday: cloud computing company VMware's $1.54 billion purchase of mobile security provider AirWatch, and the $1.56 billion sale of Finnish steelmaker Rautaruukki to Swedish rival SSAB.

MoFo is representing VMware in its acquisition of AirWatch and the firm is also advising SSAB on antitrust aspects of its deal. White & Case and Swedish firm Mannheimer Swartling Advokatbyra are also advising SSAB.

Palo Alto, Calif.–based VMware said Wednesday it has agreed to pay $1.175 billion in up-front cash, along with another $365 million to be paid in installments and assumed unvested equity, for AirWatch. Atlanta-based AirWatch, which is backed by venture capital investors Insight Venture Partners and Accel Partners, provides businesses with mobile management and security software used to manage mobile devices, e-mail and other applications and data. AirWatch has more than 10,000 global customers and employs 1,600 people.

In announcing the deal, VMware CEO Pat Gelsinger said his company will fold AirWatch into VMware's end-user computing group, a move he says "will enable customers to turbo-charge their mobile workforce without compromising security." VMware, which is a subsidiary of tech company EMC, recently predicted 2013 fourth- quarter revenues as high as $1.48 billion—a total that is 15 percent higher than the company's revenue during the same period in 2012.

VMware's acquisition of AirWatch is expected to close toward the end of this year's first quarter, pending regulatory approval. VMware will finance the deal with a mix of cash on hand and proceeds from roughly $1 billion in debt that will be provided by EMC.

The MoFo team advising VMware is led by global M&A cochair Robert Townsend, who is based in San Francisco. Corporate partner Charles Comey, employee benefits partner Michael Frank and tax partner Michelle Jewett are also working on the deal along with associates Michael Krigbaum and Jeffrey Silver. Former MoFo partner Dawn Smith has served as VMware's general counsel since 2009, and the firm advised VMware the following year on the company's acquisition of open source cloud messaging company Rabbit Technologies for an undisclosed amount.

Atlanta-based Kilpatrick Townsend & Stockton corporate partner David Eaton is leading a team from that firm representing AirWatch. M&A partners Richard Cicchillo and Gregory Cinnamon are also advising on the deal, along with IP partner Robert Artuz, litigation partner Joel Bush, patent litigation partner Susan Cahoon, tax partner Lynn Fowler, technology partner Jon Neiditz and benefits and compensation partners Jennifer Schumacher and William Vesely Jr. Also on the deal are Kilpatrick associates Frances Borromeo, Isabelle Dinerman, Kelsey Donnalley, Lance McCord, Edwin Merrick, Paula Nagarajan, Uyen Nguyen and Sterling Parkinson, as well as senior department attorney Chuck Rice. Kilpatrick regularly advises AirWatch on M&A and financing matters, says Eaton, who led the firm's team advising the company on last year's acquisition of a mobility services platform unit from Motorola Solutions for an undisclosed amount.

Willkie Farr & Gallagher is advising AirWatch investors Insight Venture Partners and Accel Partners, who teamed up to invest $225 million in the company last year, in connection with the sale. New York–based corporate partners Gordon Caplan and Matthew Guercio, along with tax partner Christopher Peters, are leading the Willkie team. Willkie frequently advises Insight Venture Partners with respect to equity investments, including last fall's purchase of data backup and recovery company Unitrends for an undisclosed amount.

Meanwhile, in another deal announced Wednesday, Stockholm-based SSAB said it will acquire rival steelmaker Helsinki-based Rautaruukki in a $1.56 billion all-stock deal that SSAB expects will create an annual savings of up to $216 million. Under the terms of the agreement, SSAB will offer 0.4752 of its own Class A shares, along with 1.2131 of its own Class B shares, for each Rautaruukki share. The deal offers Rautaruukki shareholders a premium of 20 percent for their shares, based on both companies' Tuesday closing prices. The deal is expected to close in "late April or early May," according to the companies' joint announcement, following a period of roughly four weeks in which the target's shareholders will decide whether or not to accept the offer.

The White & Case team advising SSAB is led by corporate partner Petri Haussila, the executive partner of the firm's Helsinki office (who, as we noted three years ago, was named as Finland's second-richest man in 2010). Corporate partner Timo Airisto, M&A partner Petri Avikainen, capital markets partner Mikko Hulkko and banking partner Magnus Wennerhorn are also working on the deal for White & Case. The firm's past work for SSAB includes advising the Swedish company on both the $7.7 billion purchase of U.S. steel plate company Ipsco in 2007 and its subsequent $4 billion divestment of Ipsco's tube division the following year.

SSAB also turned to Mannheimer Swartling, which features a team led by M&A partners Klaes Edhall and Thomas Wallinder. Brussels-based MoFo partner Thomas McQuail is advising SSAB on antitrust aspects of the deal.

Nordic firm Roschier is representing Rautaruukki on its sale with a team led by Helsinki-based M&A partner Jouni Salmi. Corporate partners Manne Airaksinen and Ola Åhman are also working on the deal for the firm along with tax partner Mika Ohtonen, competition partner Christian Wik, finance partner Fredrik Rydin and M&A partner Mårten Willamo.

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