When Hurricane Sandy battered the East Coast last week, it forced the New York Stock Exchange to close its doors for two days. It was the longest weather-related shutdown of the world’s largest stock exchange by market capitalization in nearly 125 years.
But the so-called superstorm didn’t completely close the capital markets, as home and outdoor furnishings and accessories retailer Restoration Hardware ended the week by launching the latest in a recent spate of initial public offerings.
Restoration is jointly owned by private equity firms Catterton Partners and Tower Three Partners, which took the Corte Madera, California–based company private in a roughly $175 million deal in 2008 amid the downturn in the U.S. housing market.
The Am Law Daily reported in August that Gibson, Dunn & Crutcher and Morrison & Foerster were advising Catterton and Restoration, respectively, on the proposed IPO. Weil, Gotshal & Manges, meanwhile, had been brought in to conduct an internal investigation of former company chairman and co-CEO Gary Friedman, who was accused of having an inappropriate relationship with a 26-year-old female subordinate.
Friedman announced in August that he was resigning from his Restoration posts, but SEC filings submitted this week show that Friedman, the former Pottery Barn president, will remain a key adviser to the company. Restoration was founded in 1981 and first went public in 1998, thanks in part to its wealthy customers’ taste for nostalgic luxury goods, according to a profile at the time by The New Yorker.
Friedman has refused to discuss details related to issues at the center of the Weil-led investigation, but he told Bloomberg News this week that they do not qualify as a scandal. “Every once in a while, people fall in love with work and fall in love at work,” he said. “That is what happened. I never thought by personal life would be so interesting to people.”
Securities filings show that Friedman will own roughly 16 percent of Restoration following the company’s $124 million Thursday IPO. The same documents show Catterton retaining a 32 percent stake in the retailer. The listing, which values Restoration at roughly $890 million, lists legal fees and expenses of $5.4 million.
Gibson Dunn capital markets cochair Stewart McDowell in San Francisco and private equity cochair and New York office co-partner-in-charge Steven Shoemate are advising Catterton, while MoFo M&A cochair Gavin Grover and corporate partners John Rafferty and Andrew Thorpe in San Francisco are representing Restoration.
Sidley Austin’s San Francisco office managing partner Sharon Flanagan and corporate partner Bradley Fenner are representing underwriters led by Bank of America/Merrill Lynch and Goldman Sachs.
Restoration’s public listing is among several recent floats of note to come on the heels of the proposed $4 billion IPO by Banco Satander’s Mexican unit announced in early September. Davis Polk & Wardwell and Shearman & Sterling grabbed lead roles on that offering, according to our previous reports.
At the same time, some companies—citing the ever-popular “continued volatility”—have decided to delay their planned IPOs in recent weeks. Among those backing off: Dallas-based arcade and restaurant chain Dave & Buster’s Entertainment, which announced its intention to go public last year only to call off its offering in early October. (Weil, which advised the private equity firm that bought Dave & Buster’s for $570 million in 2010, was taking the lead on the IPO.)
Better times may yet be in the offing. In its latest quarterly U.S. IPO report, issued last month, global accounting firm PricewaterhouseCoopers pointed to an increase in listings during the fourth quarter of this year after a relatively slow summer.
Some of the other companies to come to market recently and their outside counsel of note include . . .
Realogy Holdings: The Parsippany, New Jersey–based real estate giant behind Century 21, Coldwell Banker, and Sotheby’s International Realty raised $1.2 billion in a return to the public markets last month that followed a turnaround engineered by private equity giant Apollo Global Management, which bought the company for roughly $9 billion in cash in 2007.
Skadden, Arps, Slate, Meagher & Flom, which represented Realogy on that going-private transaction, took the lead for the company on an IPO that has generated $4 million in legal fees and expenses, according to securities filings. Simpson Thacher & Bartlett represented underwriters led by Goldman Sachs and JPMorgan Chase.
Shutterstock: The popular New York–based stock photo stock company turned to Orrick, Herrington & Sutcliffe for counsel on an October IPO that raised $76.5 million. An SEC filing by Shutterstock shows the offering generated $2 million in legal fees and expenses. Willkie Farr & Gallagher represented underwriters led by Deutsche Bank and Morgan Stanley.
WorkDay: The Pleasanton, California–based on-demand enterprise software company soared last month when it raised roughly $637 million through its IPO. Fenwick & West reaped the benefits from its work for WorkDay, according to sibling publication The Recorder, which notes that legal fees and expenses related to the offering were $1.4 million. Gunderson Dettmer Stough Villeneuve Franklin & Hachigian acted as counsel to the offerings underwriters, according to SEC filings.
In Asia, meanwhile, the IPO market may have slowed noticeably over the past year, but it hasn’t stopped altogether. Sibling publication The Asian Lawyer has kept track of the firms advising on cable television company Astro Malaysia Holdings’ $1.8 billion offering; the $1.2 billion listing for Singaporean developer the Far East Organization; Singapore-based real estate investment trust Dynasty’s $780 million IPO; and listings for India’s Amira Nature Foods, as well as China’s Shanghai Fosun Pharmaceutical, YY, and Zhengzhou Coal Mining Machinery Group.
And in Canada, the country’s oldest commercial enterprise, Toronto-based Hudson’s Bay Company (HBC), is preparing to return to the public markets. NRDC Equity Partners took Hudson’s Bay—the parent company of such retailers as Home Outfitters, Lord &Taylor, and Zellers—private in 2008.
Canadian firm Stikeman Elliott, which along with Paul, Weiss, Rifkind, Wharton & Garrison advised NRDC on that deal, is advising HBC on its proposed IPO, according to an amended long form prospectus filed with the Toronto Stock Exchange on November 1. Norton Rose Canada is representing underwriters on the matter.
Stikeman also advised Toronto-based HBC on its $1.85 billion sale of 220 store leases in Canada to Target last year, according to our previous reports.