Kirkland & Ellis M&A partners David Fox and Daniel Wolf, who joined the firm in 2009 from Skadden, Arps, Slate, Meagher & Flom, are taking the lead on two big turn-of-the-year transactions.
The duo, whose expertise has paid substantial dividends for Kirkland amid a rough couple of years for transactional work, are leading a team of lawyers from the firm representing M&A adviser Duff & Phelps on its $665.5 million sale to a private equity consortium and rental car giant Avis Budget Group in connection with its $500 million purchase of car-sharing service Zipcar.
“I’d like to think that both clients didn’t know we were working on another deal,” Wolf joked while speaking with The Am Law Daily on Wednesday about Kirkland’s role on the two transactions. “A lot of people here [at Kirkland] sacrificed their vacations to get both of these done by the New Year.”
Though the last month of 2012 saw something of a spike in dealmaking activity, the proposed Duff & Phelps and Zipcar sales were the only two major M&A transactions announced post-Christmas. Wolf says that while the Kirkland lawyers working on the Duff & Phelps deal had a brief break for the December 25 holiday, Avis’s Zipcar acquisition was not finalized until 9:30 p.m. EST on New Year’s Eve.
“I actually had dinner reservations with my wife that night I had to push back a bit,” he adds. “But I promised her I would make it and I did, although I was going through signature pages on the BlackBerry.”
In counseling New York–based Duff & Phelps, Wolf, Fox, and a team of Kirkland lawyers that also includes M&A partner Joshua Zachariah were tasked with helping the financial advisory and independent investment banking firm negotiate a “go-shop” provision that allows their client to solicit other bids until February 8.
Representing the consortium of private investors seeking to buy Duff & Phelps—a group led by affiliates of The Carlyle Group, Stone Point Capital, Pictet & Cie, and the Edmond de Rothschild Group—are a team a lawyers from Wachtell, Lipton, Rosen & Katz led by corporate partner Nicholas Demmo, antitrust partner Damian Didden, executive compensation partner Jeannemarie O’Brien, restructuring and finance partner Joshua Feltman, and tax partner Joshua Holmes.
“Needless to say, the degree of sophistication and level of discourse on this deal was quite high,” says Wolf, noting the M&A credentials of Wachtell, Carlyle, and some other key players involved in the transaction.
Wolf says New York–based private equity firm Vestar Capital Partners, which purchased a 34 percent stake in Duff & Phelps in 2005 for roughly $53 million, is a longtime Kirkland client. (Bloomberg reports that Vestar is poised to triple that investment as a result of the proposed sale of Duff & Phelps.)
Skadden has its own relationship with Duff & Phelps that extends to when Wolf and Fox were still with the firm. Skadden represented Duff & Phelps last summer, for instance, on a secondary offering of 3 million shares of common stock that resulted in net proceeds of $40 million (Kirkland advised Vestar in connection with that offering). Skadden’s ties to Duff & Phelps got a boost last year when Peter Neckles, a former restructuring and finance partner at the former, joined the latter as a senior adviser.
This time around, it was Kirkland working closely with Duff & Phelps general counsel Edward Forman. William Carapezzi, a former general counsel and chief compliance officer at Lucent Technologies, is the lead nonmanagement independent director at Duff & Phelps.
As for Avis’s proposed purchase of Zipcar, Wolf says he and Fox have had a close relationship with the Parsippany, New Jersey–based rental car company since it was spun off as a freestanding entity amid the breakup of the $20 billion travel and real estate franchising conglomerate Cendant in 2006.
One highlight of the relationship was the pair’s representation of Avis last year in connection with its $1 billion acquisition of Avis Europe. Kirkland also represented Avis on its unsuccessful $1.3 billion offer to buy Dollar Thrifty Automotive Group in 2010, a bid that failed in the face of antitrust obstacles and a competing offer from rental car rival Hertz Global Holdings. (Lawyers from three Am Law 100 firms ultimately helped Hertz prevail in its quest to buy Dollar Thrifty last summer; U.S. regulators approved the deal in November.)
Wolf, Fox, and M&A partner Michael Brueck are leading the Kirkland team advising Avis on its proposed Zipcar acquisition. The group worked closely with Avis chief compliance officer and general counsel Michael Tucker on the deal, according to Wolf.
Martin Edelman, a longtime partner and former of counsel at Paul, Weiss, Rifkind, Wharton & Garrison, is an independent member of Avis’s board of directors at Avis, along with fellow attorney Lynn Krominga and retired O’Melveny & Myers partner John Hardy Jr.
SEC filings show that Latham & Watkins corporate partners John Chory and Philip Rossetti, the managing partner of the firm’s Boston office, are working with Zipcar general counsel Dean Breda in advising the Cambridge, Massachusetts–based company on its proposed sale to Avis. Other Latham lawyers working on the matter include tax partner David Kahn, employee benefits partner David Della Rocca, antitrust partner Karen Silverman, and associates Nate Amory, Michelle Carpenter, and Stephen Ranere.
Latham opened its Boston office last year after hiring seven lawyers from rival Am Law 100 firms. Chory and Rossetti joined Latham from Wilmer Cutler Pickering Hale and Dorr, bringing with them the work related to Zipcar’s $174 million initial public offering in 2011, according to our previous reports. SEC filings show that the IPO, which Zipcar first filed for in 2010 with Wilmer advising, yielded $1.6 million in legal fees and expenses. (Zipcar still uses Wilmer for corporate work; the company’s former general counsel, Maria Stahl, was once a junior partner at the firm.)
The proposed sales of Zipcar and Duff & Phelps cap a busy year for Kirkland’s corporate group. The firm—which, according to data compiled by the Financial News, took the top legal spot for buyouts in 2012—has over the past few weeks advised private equity firm Palladium Equity Partners on its sale of the Wise Foods snack brand; private equity firm Linden Capital Partners on its $314 million buyout of dental equipment maker Young Innovations; and the board of Chinese digital advertising company Focus Media Holdings on a $3.7 billion buyout offer from a consortium of investors.
Other notable clients Kirkland advised on major M&A deals in 2012 include ABB (on its $4 billion buy of Thomas & Betts); Baxter International (on its $4 billion bid for Gambro); Bristol-Myers Squibb (in connection with its $7 billion acquisition of Amylin Pharmaceuticals); Clearwire (on its $2.2 billion sale to SprintNextel); Molson Coors Brewing Company (in connection with its $3.54 billion purchase of European brewer Starbev); NRG Energy (on its $1.7 billion buy of GenOn Energy); and Solutia (on its $1.4 billion sale to Eastman Chemical).
Asked what he sees for the M&A market in 2013, Kirkland’s Wolf says that the key will be whether large private equity firms return to the market to make sizable deals.
“A lot of the rumored large leveraged buyouts haven’t panned out,” Wolf explains, “but some of the big strategic deals [like the proposed $8.2 billion merger between the NYSE and ICE] are getting done, so that’s one hopeful sign for the new year.”