Four Firms Make Fashion Statement on Neiman Marcus Sale
UPDATE: 9/10/13, 10:30 a.m. EDT. The names of the full team from Proskauer advising Ares and the CPPIB have been added to the 15th paragraph of this story.
The leveraged buyout boom of the last decade saw many an Am Law 100 firm cash in by snagging high-profile private equity clients. Now one of the companies caught up in that dealmaking frenzy, luxury retail chain Neiman Marcus, is set to be sold once again.
Cleary Gottlieb Steen & Hamilton, which advised TPG Capital and Warburg Pincus on their $5.1 billion purchase of Neiman Marcus in October 2005, has reprised its role as counsel to both private equity firms as they prepare to exit their investment.
Neiman Marcus is a Dallas-based purveyor of high-end apparel that owns 84 stores in the U.S., including the Bergdorf Goodman chain, which were hit hard by a decline in consumer spending as a result of the global financial crisis. The sale of Neiman Marcus effectively scuttles an initial public offering that could have raised $1 billion.
In June, an entity controlled by TPG and Warburg called Newton Holding filed to take Neiman Marcus public. Legal fees related to the now aborted IPO were never disclosed, although SEC filings show that Cleary corporate partners William Gorin and Robert Davis were advising Neiman Marcus, while Cravath, Swaine & Moore securities practice leader William Whelan III took the lead for underwriters led by Bank of America/Merrill Lynch, Credit Suisse, and JPMorgan Chase.
The current Cleary team advising Neiman Marcus on its $6 billion sale to Ares and the CPPIB is being led by Davis and M&A partner David Leinwand, both of whom also advised TPG and Warburg when they beat out private equity rivals Bain Capital, KKR, The Blackstone Group, and Thomas H. Lee Partners to buy the retailer in 2005. (After that LBO was completed, Neiman Marcus sold high-end accessories and women’s handbag maker Kate Spade to Liz Claiborne for $124 million in another late 2006 deal.)
Other Cleary lawyers working on the deal announced Monday include finance partners Margaret “Meme” Peponis and Amy Shapiro, tax partner Jason Factor, antitrust partner Brian Byrne, real estate partner Steven Horowitz, employee benefits counsel Kathleen Emberger, IP counsel Daniel Ilan, environmental counsel Richard Bidstrup, and associates Dustin Barzell, Kathleen Bradish, Quincy Byrd, Anthony Cerceo, Kathleya Chotiros, Lisa Connolly, Andrew Coombs, Dorje Glassman, Elena Heim, Alexandra Kelly, James Langston, Joseph Lanzkron, Daniel Malech, Elise Minter, Beau Sterling, Ashley Teele, and Amber Thiel.
Fort Worth–based TPG has long turned to Cleary for counsel on several major transactions, including a potential bid for Yahoo two years ago that never materialized. (TPG hired former Cravath M&A partner Ronald Cami as its general counsel in 2010.)
Cleary has also been busy in recent months doing deals for Warburg, such as a $914 million acquisition in June of a 50 percent stake in the asset management arm of Spanish banking giant Santander. Warburg turned to Cleary in May for counsel on the $8.7 billion sale of portfolio company Bausch & Lomb to Valeant Pharmaceuticals, according to our previous reports.
Warburg Pincus managing director and senior adviser Sidney Lapidus, an attorney, is a member of the board of directors for Neiman Marcus. Scott Arenare and Harsha Marti serve as general counsel and assistant general counsel, respectively, for New York–based Warburg.