(Courtesy of The Manischewitz Company)
With Passover approaching, Akin Gump Strauss Hauer & Feld and Milbank, Tweed, Hadley & McCloy grabbed seats at the table as The Manischewitz Company—one of the country’s few remaining matzo makers—saw its ownership transfer from one privately held entity to another.
Harbinger Capital Partners, the New York–based hedge fund controlled by billionaire Philip Falcone, has agreed to hand over the kosher food manufacturer to Sankaty Advisors, a credit affiliate of Boston-based private equity firm Bain Capital, for an undisclosed sum.
Sankaty has installed Mark Weinstein, formerly of FTI Consulting, as CEO of Newark-based Manischewitz, whose other products include borscht, gefilte fish and macaroons. (The company does not make the popular sweet wine of the same name, which is sold by Constellation Brands under a licensing deal.)
Boston-based Sankaty has investments in a wide range of industries, including the food sector. Weinstein told The New York Times’ DealBook and other publications that Manischewitz’s new owner hopes to move the company beyond the kosher aisle, in part by seeking to capitalize on the brand’s healthy image by promoting it to secular, health-conscious shoppers.
Akin Gump corporate partner David D’Urso, tax partner Howard Jacobson and corporate counsel Renuka Drummond took the lead for Sankaty on the deal. D’Urso says the firm has previously handled work for Sankaty, advising, for instance, on its $80 million purchase of the Shari’s Restaurants chain in 2006. Bain deputy general counsel Ranesh Ramanathan serves as Sankaty’s general counsel.
Manischewitz was founded in Cincinnati in 1888 by Rabbi Dov Behr Manischewitz, who, according to a 2004 Fortune story, shed the Abramson surname he was born with after buying the passport of a dead man named Manischewitz in order to flee his native Lithuania. After settling in Ohio, he began making matzo—the unleavened bread traditionally eaten by Jews during Passover—for the local Jewish community.
Over the next century Manischewitz, whose operations are now primarily based in New Jersey, grew into America’s largest kosher brand. In 1990 the descendants of the founding family—the last of whom died in 2003—sold the company for $42.5 million to private equity firm Kohlberg & Co., roughly around the same time Manischewitz reached a plea deal with federal prosecutors over matzo price-fixing charges.
Manischewitz has changed hands between private equity firms in the years since. Harbinger, which took control of the company in late 2007 when it was known as the RAB Food Group, has turned to Milbank to advise on the deal with Sankaty. Alexander Kaye, who heads Milbank’s corporate group, is leading a team from the firm working on the deal that includes tax head Russell Kestenbaum and associates Dean Sattler and Aaron Stine.
Kaye did not respond to a request for comment, and while exact terms of the Manischewitz deal remain unclear, DealBook reported Friday that Harbinger had taken a loss in unloading Manischewitz to Sankaty, which took control of the company by converting its debt into equity. The Manischewitz deal is just the latest assignment Milbank has handled for Harbinger in recent years, as Falcone has had to cope with an array of legal issues.
The hedge fund turned to Milbank to advise on the 2012 bankruptcy filing by LightSquared, a wireless telecommunications company that was the subject of a fierce takeover fight between Falcone and Dish Network chairman Charles Ergen. (Willkie Farr & Gallagher is advising Dish in connection with the bankruptcy litigation, while Harbinger has retained Kasowitz, Benson, Torres & Friedman to advise it in the matter.) In January, Milbank counseled Harbinger’s HGI Funding on its acquisition of lingerie line Frederick’s of Hollywood.
Milbank isn’t the only law firm Harbinger has kept busy of late. Paul, Weiss, Rifkind, Wharton & Garrison and New York boutique Dontzin Nagy & Flessig represented the hedge fund and Falcone last year in negotiating an $18 million settlement last year with the Securities and Exchange Commission on market manipulation charges, according to our previous reports. The deal saw Falcone barred from the securities industry for five years.
Robin Roger, Harbinger’s former general counsel and chief compliance officer, resigned in late December. The hedge fund’s current deputy general counsel, Kostas Cheliotis, is a former Milbank associate.