A pair of private equity firms and shoemaker Wolverine World Wide plan to acquire Collective Brands, the parent of retailer Payless ShoeSource and owner of such product lines as Keds and Saucony, in a deal valued at $2 billion, or $1.32 billion excluding debt.

The buyers plan to divide up the company with Wolverine, which produces the venerable Hush Puppies line, buying the shoe brands and Blum Capital Partners and Golden Gate Capital acquiring Payless and Collective Licensing International (CLI). 

Collective Brands, whose general counsel Michael Massey took over as interim CEO of the Topeka, Kansas–based company last summer, turned to Sullivan & Cromwell for representation on its sale to Wolverine and the private equity shops.

M&A partners Frank Aquila, Audra Cohen, and Melissa Sawyer, finance partner Neal McKnight, employee benefits partner Matthew Friestedt, tax partner Ronald Creamer Jr., environmental special counsel Matthew Brennan, and employee benefits special counsel Henrik Patel are leading an S&C team advising Collective Brands on the transactions leading to the breakup of the company, which is expected to close in the late third or fourth quarter of this year.

S&C advised the company in 2007 on its $800 million purchase of Stride Rite and $91 million acquisition of Collective International. Collective Brands had been in the process of turning around its businesses, which involved, among other things, last year’s announcement that 475 Payless stores would close.

Kirkland & Ellis M&A partners Stephen Fraidin in New York and Stephen Oetgen in San Francisco are leading a team advising Blum Capital and Golden Gate. Other Kirkland lawyers working on the matter include corporate partners Mikaal Shoaib, William Sorabella, Jeremy Veit, and Christopher Torrente, and finance partners Jay Ptashek, Ashley Gregory, and David Nemecek.

Blum Capital and Golden Gate, both of which are based in San Francisco, will acquire Payless and CLI, a youth lifestyle marketing and global licensing business.

Kirkland has a history with Golden Gate, having advised in 2009 on both its $75 million acquisition of J. Jill from Talbots and its $286 million takeover of retailer Eddie Bauer. Kirkland also advised Golden Gate last year on its $2 billion buyout of Lawson Software and $470 million purchase of California Pizza Kitchen.

Golden Gate managing directors David Dominik and Prescott Ashe both hold legal degrees, while Jim O’Connor serves as the private equity firm’s chief compliance officer. Gwen Reinke is general counsel and chief compliance officer for Blum Capital.

Wolverine, meanwhile, is being advised by a Barnes & Thornburg team led by corporate department vice-chair Tracy Larsen and tax chair Timothy Riffle. Other lawyers from the firm working on the deal include corporate partners Kepten Carmichael, Stephen Dutton, and Joshua Hollingsworth.

Wolverine’s general counsel R. Paul Guerre, who joined the company in March, is a former Barnes & Thornburg partner. Guerre is in the process of replacing retiring Wolverine general counsel and current deputy general counsel Kenneth Grady. The two are working together as part of a planned succession process over the next two years.

Wolverine’s previous two generals counsel, James Zwiers and Blake Krueger, serve as senior vice president of the company’s outdoor group and CEO and chairman of the company’s board of directors, respectively. Shirley Peterson, a former partner at Steptoe & Johnson, is also a member of the board.