Late-Year M&A Surge a Boon to Some Am Law 200 Firms
UPDATE: 1/2/14, 11:33 p.m. EST. Wilson Sonsini's role advising FireEye on its $1 billion buy of Mandiant has been added to the 21st paragraph of this story.
Mergers and acquisitions in the U.S. accounted for 43 percent of global deal volume in 2013, according to Thomson Reuters data analyzed by The New York Times' DealBook, with the nation's technology sector particularly active.
The DealBook story comes on the heels of a November report by the Silicon Valley Business Journal, which—citing quarterly data compiled by global accounting firm Ernst & Young—noted that the tech sector had seen more M&A activity since the beginning of 2013 than at any point starting with the so-called dotcom era more than a decade ago.
The industry continued its dealmaking run over the past week with a batch of transactions that totaled nearly $3 billion in value and yielded assignments for several Am Law 200 stalwarts.
In one of those deals, announced just before Christmas, enterprise software giant Oracle agreed to acquire business-to-consumer marketing software vendor Responsys for $1.39 billion. The deal, which is expected to close in the first half of this year, is the eighth acquisition announced by Oracle within the last year.
Redwood City, California–based Oracle, which is controlled by billionaire cofounder and CEO Lawrence Ellison (who saw his $77 million pay package rejected by shareholders in October), tapped Weil, Gotshal & Manges for counsel nearly a year ago for its $2.1 billion acquisition of network communications equipment company Acme Packet. Weil also advised Oracle in December 2012 on its $871 million buy of automated marketing software company Eloqua, according to our previous reports.
Keith Flaum—a Weil M&A partner who joined the firm's Silicon Valley office in May 2012 with a group of transactional lawyers from the now-defunct Dewey & LeBoeuf—handled both of those deals for Oracle. And though the firm had advised the company on a variety of matters prior to the addition of the Dewey defectors, their arrival appears to have bolstered the relationship between the two.
Flaum and fellow M&A partner Richard “Rick” Climan, who led the Dewey team that decamped to Weil, are listed in an SEC filing as counsel to Oracle on its proposed acquisition of Responsys. Other Weil lawyers working on the matter for Oracle include tax partner Helyn Goldstein, employee benefits partner Amy Rubin and associates Cristiana Blauth Oliveira, Faraz Rana, Verity Rees and Gabriel Shapiro. (The Am Law Daily reported last week that Flaum had taken the lead for another Weil team advising Irish drug maker Jazz Pharmaceuticals on its $1 billion buy of Italian drug developer Gentium.)
Technology news website GigaOM reported earlier this year that Oracle—whose general counsel is Dorian Daley—is intent on fending off rivals on the way to snapping up automated software services companies in order to woo the chief marketing officers of its potential clients. When the company announced on Dec. 20 its plans to acquire Responsys—whose board has already approved the deal— Computerworld reported that the rationale for the transaction was to keep the target away from competitors.
Julian Ong, an Oakland native and veteran Silicon Valley in-house attorney who has served as general counsel for Responsys since 2010, told sibling publication The Recorder in 2012 that Fenwick & West and DLA Piper were the firms the company typically turns to for outside counsel.
It is Fenwick that has taken the lead for Responsys on the sale of the company to Oracle. Heading up the firm's team on the matter are veteran Silicon Valley dealmaker and Fenwick corporate partner Gordon Davidson, securities and corporate finance cochair Jeffrey Vetter and private equity chair Scott Joachim.
In another tech sector deal announced in late December, Dealer.com, a private equity–owned provider of financial software to automobile dealers, announced that it is being acquired by Dealertrack Technologies for $1 billion.
Gary Papilsky—a former associate at Brobeck, Phleger & Harrison, which collapsed a decade ago following the bursting of the dotcom bubble—serves as Dealertrack's general counsel. Eric Jacobs, a former O'Melveny & Myers associate, is the New Hyde Park, New York–based company's chief financial officer. And not surprisingly, Jacobs' former firm is advising Dealertrack on the transaction.
An SEC filing made by Dealertrack on Dec. 19 shows that Paul Scrivano, cohead of O'Melveny's U.S. M&A practice, is leading a team from the firm representing the company in connection with the matter. Other O'Melveny lawyers working on the deal include corporate partner Sung Pak, employee benefits partner and executive committee member Christopher Del Rosso, M&A counsel Gilbert Villaflor and associates Natalie DiTomasso, Ariel Rom and Sarah Young.
Meanwhile, Wilson Sonsini Goodrich & Rosati corporate and securities partners Robert Sanchez, Daniel Peale and Bradley Finkelstein are leading a team from the firm advising Burlington, Vt.–based Dealer.com on its proposed sale to Dealertrack. The deal, which Reuters reports includes about $620 million in cash, is expected to close in the first quarter of 2014.
Private equity firm Apax Partners—a part owner of ALM Media LLC, the parent company and publisher of The Am Law Daily—controls Dealer.com. Last week London-based Apax sold its stake in furniture and bedding retailer Bob's Discount Furniture to private equity rival Bain Capital in a $350 million deal, according to our previous reports. Simon Cresswell serves as Apax's general counsel.
In a third tech sector transaction announced two days before Christmas, hard disk drive maker Seagate Technology said it has agreed to acquire rival network and data storage equipment maker Xyratex for $374 million in cash. Wilson Sonsini, whose chairman Larry Sonsini has longstanding ties to Seagate, is advising the acquirer on the deal.
Michael Ringler—who heads the M&A group at Wilson Sonsini, a firm he quickly rejoined early last year after a two-week stint at Kirkland & Ellis—is counseling Seagate along with M&A partner Denny Kwon. Wilson Sonsini advised Seagate in October when Samsung sold $1.5 billion of the company's shares it had acquired after selling its disk drive unit to Seagate two years ago, according to sibling publication The Asian Lawyer.
Kenneth Massaroni serves as general counsel for Seagate, which has its roots in Cupertino, Calif., but its corporate headquarters in Ireland for tax purposes. At the height of the dotcom bubble in 2000, Seagate was taken private by a consortium of buyout firms in a $20 billion deal.
Two years later the private equity buyers—led by Silver Lake Partners—cashed out of Seagate as the company raised $870 million through an initial public offering. An SEC filing at the time shows the listing yielded roughly $2 million in legal fees and expenses for Simpson Thacher & Bartlett and Wilson Sonsini. (Larry Sonsini, whom The American Lawyer reported in 2005 had spurned an offer to become Silver Lake's chairman, was one of the Wilson Sonsini lawyers advising underwriters on Seagate's IPO.)
For its part, Havant, England–based Xyratex has turned to a Latham & Watkins team for counsel on the sale to Seagate. The Latham team is led by corporate vice chair Tad Freese and associate Christopher Drewry. Malcolm Rule is Xyratex's group secretary and legal counsel, while David Power is the target company's top U.S. in-house attorney.
As for Wilson Sonsini, The Recorder notes that Ringler and M&A partner Melissa Hollatz also grabbed a role late Thursday counseling cybersecurity firm FireEye on its $1 billion buy of computer forensics specialist Mandiant, which last year published a detailed report on hacking by the Chinese military. Mandiant, backed by private investors Kleiner Perkins Caufield & Byers and One Equity Partners, is being advised on its sale by Cooley venture capital partner Michael Lincoln and M&A partner Jamie Leigh.
Both firms advised on a $303.6 million IPO by FireEye this past fall that generated $1.2 million in legal fees and expenses, according to an SEC filing by the Milpitas, Calif.-based company. Alexa King is FireEye's general counsel. U.S. Senate records show that FireEye paid $90,000 to Dickstein Shapiro through the first three quarters of last year to lobby Congress on cybersecurity legislation.
Shane McGee, the former cochair of the Internet and data protection practice at Dentons, serves as Mandiant's general counsel.
While the U.S. economy continues to improve, The American Lawyer reported last week that a rebound could also be on the horizon for European M&A. And although crystal balls can be cloudy this time of year, some prominent market observers are expecting big things in 2014.
Nouriel Roubini, an American economist best known for predicting the global economic downturn five years ago, recently said he remains bullish in his economic outlook for this year. If his prediction proves true, expect Am Law 100 lawyers to seize the resulting opportunities.