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Deals & Suits
Thermo Fisher Scientific Inc. agreed to acquire rival laboratory equipment manufacturer Life Technologies Corp. for $13.6 billion in cash and assumed debt on April 15. Thermo Fisher reportedly defeated Sigma-Aldrich Corp. and a consortium composed of private equity firms Blackstone Group L.P., Carlyle Group L.P., and KKR & Co. LP. The target's stockholders will receive $76 a share, a 38 percent premium to Life Technologies's closing price on January 17, the day before it announced that it was engaging in a strategic review.
Life Technologies makes more than 50,000 products including testing equipment used in DNA analysis and has expanded into genetic-sequencing machines that it claims will be able to map the human genome for $1,000. The companies hope to close the deal early next year pending approvals from regulators and Life Technologies shareholders.
For acquiror Thermo Fisher Scientific Inc. (Waltham, Massachusetts)
General counsel Seth Hoogasian, deputy general counsel Jonathan Wilk, chief counsel–M&A and employment John Piccione, and associate general counsel Sharon Briansky and Scott Mazur.
Wachtell, Lipton, Rosen & Katz:
Corporate: Matthew Guest and associates Jacob Kling and Edward Lee. Executive compensation and benefits: Jeannemarie O'Brien. Finance: associate Gregory Pessin. Tax: Joshua Holmes. (All are in New York.) Guest advised the company on its 2011 purchase of Dionex Corp. for $2.1 billion. Wachtell's Edward Herlihy represented Thermo Electron Corp. in 2006 on its $12.8 billion merger with Fisher Scientific International Inc. Former Thermo board member Peter Manning had been the vice-chairman of strategic business development at FleetBoston Financial Corp., which tapped Wachtell when it was sold to Bank of America Corp. in 2003.
Wilmer Cutler Pickering Hale and Dorr: Corporate: David Redlick and Erika Robinson. Commercial finance: John Sigel and counsel Kathryn Bennett. M&A: Hal Leibowitz. (All are in Boston except for New York–based Robinson and Bennett.) Wilmer has long represented Thermo Fisher and advised the company last year on its $925 million purchase of One Lambda Inc. and in 2011 on its $3.5 billion purchase of Phadia AB from Cinven Ltd.
For target Life Technologies Corp. (Carlsbad, California)
Chief legal officer John Cottingham and head of M&A, governance, and securities David Szekeres.
Cravath, Swaine & Moore:
Corporate: Richard Hall, Minh Van Ngo, and associates Rachael Coffey, Stephanie Gallina, and Raku Raku. Tax: Michael Schler and associates Jonathan Grossman and Kara Mungovan. Executive compensation and benefits: Eric Hilfers, practice area attorney Michael Krasnovsky, and associate Matthew Cantor. Environmental: Matthew Morreale. Intellectual property: David Kappos and associate Gregory Baden. Antitrust: Christine Varney and associates Sharonmoyee Goswami and Margaret Segall. (All are in New York.)
Antitrust: Martin Coleman and senior associate Ian Giles. (Both are in London.)
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KKR & Co. L.P. announced on March 8 that it would pay $3.9 billion in cash and assumed debt for Gardner Denver Inc., which makes compressors, liquid ring pumps, and blowers for industrial customers. The target's stockholders stand to receive $76 per share in cash, a 39 percent premium to Gardner Denver's closing price on October 24, the day before it announced that it was considering strategic alternatives.
Gardner Denver also reportedly talked to SPX Corp. about a deal, but those talks broke down in December. KKR bid $75 a share for Gardner Denver in February.
The parties hope to close the deal in the third quarter pending approvals from regulators and Gardner Denver shareholders.
For acquiror KKR & Co. L.P. (New York)
Simpson Thacher & Bartlett: ?M&A: Andrew Calder, Sean Rodgers, and associates Jay Blackman, Matthew Gabbard, John Kupiec, Rhett Van Syoc, and Erik Ping Wang. Credit: James Cross and associates Adam Shapiro and Nicole Tague. Capital markets: Richard Fenyes. Antitrust: Joseph Tringali, David Vann, senior counsel Michael Naughton, and associates Ellen Frye and Étienne Renaudeau. Environmental: senior counsel Adeeb Fadil and associate Timothy Mulvihill. Executive compensation and employee benefits: Andrea Wahlquist and associate Patricia Adams. Real estate: counsel Krista McManus. Insurance: senior counsel Elisa Alcabes. Tax: Nancy Mehlman and associate Jodi Sackel. (All are in New York except for Houston-based Calder, Blackman, and Van Syoc and London-based Vann and Renaudeau.) Simpson is KKR's regular outside counsel. KKR's general counsel David Sorkin is a former Simpson partner.
For target Gardner Denver Inc. (Wayne, Pennsylvania)
General counsel Brent Walters, assistant general counsel Marec Edgar, senior corporate counsel–global compliance Lindsay Glasgow, senior counsel Bradley Wideman, and corporate counsel Jennifer Karpe.
Skadden, Arps, Slate, Meagher & Flom: M&A: Stephen Arcano, Richard Grossman, and associates Christopher Barlow and Claire James. Executive compensation and benefits: Neil Leff and associates Liesl Finn and Laura McIntyre. Tax: David Rievman and associate Rebecca Brown. Banking: Robert "Rob" Copen and associate Markus Meuller. (All are in New York.)
Baker & McKenzie:
M&A: Edward Harrison and Dieter Schmitz. Antitrust: H. Stephen Harris Jr. and associates John Fedele and Michael Vukich. (All are in Chicago except for Washington, D.C.–based Harris and Fedele.)
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General Electric Co. agreed to buy oil field services company Lufkin Industries Inc. for $3.3 billion in cash on April 8. Lufkin stockholders will receive $88.50 a share, a 38 percent premium to the target's closing price on April 5, the last trading day before the deal's announcement.
GE's oil and gas unit was the conglomerate's fastest-growing unit in 2012, and Lufkin Industries was an attractive target because of its specialization in artificial lift technologies, which help bring oil and gas to the surface when a field's natural pressure is no longer strong enough to do so. GE already offers electric submersible pumps; the Lufkin deal would give it rod lift, gas lift, plunger lift, hydraulic lift, progressive cavity pumps, and well automation and production optimization controls and technology.
The companies hope to close the deal in the second half of the year pending approvals from regulators and Lufkin shareholders.
For acquiror General Electric Co. ?(Fairfield, Connecticut)
At General Electric Co.: senior counsel–transactions Briggs Tobin. At GE Oil & Gas: executive counsel–M&A George Flemma.
Weil, Gotshal & Manges:
Corporate: Howard Chatzinoff, Danielle Do, P.J. Himelfarb, R. Jay Tabor, and associates Elliot DeRemer, Adé Heyliger, Joanna Jia, and Monty Ward. Technology and intellectual property transactions: Charan Sandhu and associates Marisa Geiger and Janell Wise. Real estate: Samuel Zylberberg and associate John Goldman. Tax: Kimberly Blanchard, Chayim Neubort, and associates Mark Dundon and Eric Remijan. Executive compensation and employee benefits: Michael Kam and associate Henry Neading. Environmental: David Berz and associate Matthew Morton. International arbitration and trade: Charles "Chip" Roh. Litigation: Steven Tyrrell. Employment litigation: associate Courtney Fain. Financial institutions regulatory: associate Timothy Welch. (All are in New York except for the following. Himelfarb, Tabor, DeRemer, Ward, and Dundon are in Dallas. Heyliger, Berz, Morton, Roh, Tyrrell, and Welch are in Washington, D.C.) Weil is GE's regular outside M&A counsel.
For target Lufkin Industries Inc. ?(Lufkin, Texas)
General counsel Alejandro "Alex" Cestero and corporate counsel M. Keith Gee.
Bracewell & Giuliani:
Corporate: Gary Orloff, Michael Telle, R. Daniel Witschey, and associates Harrison Bolling, Clay Brett, Marcus Friedman, Erica Hogan, Benjamin Martin, Zackary Ring, and Caroline Wells. Tax: Lance Behnke and associate Elizabeth Brummett Behncke. Employment law: Robert Nichols. Employee benefits and executive compensation: Bruce Jocz and associate Allison Perry. Environmental: Tim Wilkins and senior counsel Scott Sherman. Compliance and regulatory: senior counsel Josh Zive. Antitrust: Daniel Hemli. Intellectual property: associate Glenn Strapp. Litigation: Stephen Crain. Finance: associate Rebecca Keep. (All are in Houston except for the following. Behnke is in Seattle. Friedman, Hemli, and Keep are in New York. Wilkins is in Austin. Zive is in Washington, D.C.) Cestero once practiced at Bracewell. The firm began representing Lufkin last September following a beauty contest.
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Dexia v. ?JPMorgan
In a huge win for JPMorgan Chase & Co. and its lawyers at Cravath, Swaine & Moore, on April 4 a New York federal district court judge threw out all but about $6 million of Dexia SA's $774 million mortgage-backed securities fraud claims against the bank. But the case has taken some twists and turns since that April ruling.
U.S. District Judge Jed Rakoff in Manhattan ruled that the French-Belgian bank doesn't have standing to bring claims over 60 of the 65 securities at issue in the case. The ruling, if it had survived appeal, would have limited Dexia's potential damages to a puny $5.7 million.
In 2006 and 2007, a Dexia subsidiary, FSA Asset Management LLC (FSAM), invested $1.6 billion in 65 MBS certificates issued by JPMorgan and its subsidiaries and others, including The Bear Stearns Companies Inc. and Washington Mutual Inc. Dexia sued in January 2012, alleging that the banks misrepresented the risk profile of the mortgages used to collateralize the MBS. Dexia alleged that, because of those misstatements, it overpaid for the MBS.
During discovery, J. Wesley Earnhardt and Daniel Slifkin of Cravath learned that all the MBS certificates at issue were purchased by the Dexia unit FSAM, which later sold them to Dexia. They argued in their motion for summary judgment that FSAM, as the original purchaser of the security, was the only plaintiff with standing under New York law absent an explicit transfer of the right. And FSAM's losses, or potential damages, were only about $5.7 million. Dexia, looking to Mark Lebovitch of Bernstein Litowitz Berger & Grossmann, argued that the MBS's offering statements were false and misleading.
In a two-page order, Rakoff dismissed claims brought by Dexia entities and ruled that FSAM can only sue over five of the original 65 offerings. Judge Rakoff's reasoning, however, had not yet been spelled out in a full opinion prior to the U.S. Court of Appeals for the Second Circuit's ruling discussed below.
On a sua sponte motion issued April 22, however, Rakoff first cast his own ruling in doubt. The motion was triggered by a ruling a week earlier by the Second Circuit in a similar MBS claim involving different banks in which the panel found that the state, not federal, court had jurisdiction. On May 17 Rakoff overturned his own prior ruling, claiming that he lacked jurisdiction under the Edge Act, and remanded the case to New York state court.
For plaintiff Dexia SA (Brussels)
Bernstein Litowitz Berger & Grossmann:
Mark Lebovitch, Timothy DeLange, counsel Jeroen van Kwawegen, and associates Michael Blatchley and William Fredericks. (DeLange is in San Diego; the rest are in New York. Fredericks has left the firm.) The firm did not comment further.
For defendant JPMorgan Chase & Co. ?(New York)
Cravath, Swaine & Moore:
J. Wesley Earnhardt, Michael Paskin, Daniel Slifkin, and associates Michael Addis, Jacqueline Harrington-Holm, Margaret Hoppin, Xiao Liu, Patrick Meagher, Margot Miller, Derek Musa, Sarita Prabhu, Michael Sanfilippo, and Hector Valdes. (They are in New York.) The firm has represented JPMorgan in other MBS cases since 2011.
—Jan Wolfe, with Tom Coster
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In re Vitamin C Price Fixing ?Class Action
After a historic jury trial in federal court in Brooklyn, two Chinese companies—Hebei Welcome Pharmaceutical Company Co. Ltd. and North China Pharmaceutical Group Corporation—were ordered on March 14 to pay $162 million for fixing vitamin C prices.
Three law firms—Boies, Schiller & Flexner, Susman Godfrey, and Hausfeld LLP—jointly represented a class of direct purchasers of vitamin C; William Isaacson of Boies Schiller served as lead plaintiffs counsel. Baker & McKenzie's Charles "Chuck" Critchlow and Darrell Prescott represented two of the defendants, the first Chinese companies to face a civil price-fixing trial on U.S. soil.
The case dates back to 2005, when Boies Schiller and Susman Godfrey filed suit against five Chinese companies, alleging that they were engaged in a cartel that had led to inflated prices for vitamin C globally.
The Chinese companies moved for summary judgment in 2009, arguing that they couldn't be held liable because they set their prices according to Chinese government directives. China's Ministry of Commerce tapped Sidley Austin to file an amicus brief supporting that position.
U.S. District Judge Brian Cogan denied summary judgment in 2011. One of the five, Aland (Jiangshu) Nutraceutical Co. Ltd., settled for $10.5 million last year. A trial on the remaining $54 million claim kicked off on February 25. The defense's star witness was Qiao Haili, an official in China's Ministry of Commerce, who testified that the ministry set and enforced vitamin price minimums.
On cross-examination, Isaacson sought to undermine Qiao's credibility, citing a 2003 memo Qiao wrote to his colleagues in which he appeared uncertain of his ministry's enforcement power. Qiao responded that the memo related to penicillin prices, not vitamin C prices.
After the trial wrapped up that day, Boies Schiller counsel Jennifer Milici dug up the information that Qiao had cited, revealing that the penicillin agreement was made after the 2003 memo. Isaacson cited this discrepancy during his closing argument.
Shortly before jury deliberations, two more defendants—Weisheng Pharmaceutical Co. Ltd. and China Pharmaceutical Group Limited—settled claims for a combined $22.5 million. Jurors returned a $54 million verdict against the two remaining defendants; U.S. District Judge Brian Cogan trebled damages. The verdict will likely be appealed this summer after resolution of posttrial motions.
For MDL plaintiffs
Boies, Schiller & Flexner:
Tanya Chutkan, William Isaacson, Alanna Rutherford, and counsel Jennifer Milici. (Rutherford is in New York; the rest are in Washington, D.C.) The firm reassembled its cocounsel team from the earlier European/Japanese vitamin litigation.
Suyash Agrawal, James Southwick, Shawn Raymond, and associate Katherine Kunz. (Agrawal has left the firm; the rest are in Houston.) Southwick was co–lead counsel.
Michael Hausfeld, Brent Landau, Brian Ratner, and associate Melinda Coolidge. (Hausfeld, Ratner, and Coolidge are in Washington, D.C.; Landau is in Philadelphia.) The firm was reenlisted for this litigation based on earlier vitamins antitrust matters.
For defendants Hebei Welcome Pharmaceutical Company Co. Ltd. (Shijiazhuang, China) and North China Pharmaceutical Group Corporation (Shijiazhuang, China)
Baker & McKenzie:
Charles "Chuck" Critchlow, Darrell Prescott, and associate Catherine Yunie Stillman. (They are in New York.) The firm did not comment further.
For defendants Weisheng Pharmaceutical Co. Ltd. (Shijiazhuang, China) and China Pharmaceutical Group Limited (Shijiazhuang, China)
Zelle Hofmann Voelbel & Mason:
Daniel Mason. (He is in San Francisco.) The firm did not comment.
For defendant Northeast Pharmaceutical Group Co. Ltd. (Shenyang, China)
Scott Martin and James Serota. (They are in New York.)
For defendant Aland (Jiangshu) Nutraceutical Co. Ltd. ?(Jiangshu, China)
Orrick, Herrington & Sutcliffe:
Richard Goldstein and counsel Stephen Bomse. (Goldstein is in New York; Bomse is in San Francisco.)
—J.W., with T.C.
David Marcus is senior writer for TheDeal.com.