Private equity firm KKR has agreed to pay roughly $1 billion in cash to acquire two industrial products businesses from U.K. manufacturing investor Melrose Industries.
Announced late Wednesday, the deal would see KKR pick up The Crosby Group and Acco Material Handling Solutions, both of which make industrial lifting and rigging products used in the construction, energy, and mining industries. Headquartered in Tulsa, Crosby makes products such as industrial clamps, hooks, and swivels, while York, Pennsylvania–based Acco manufactures cranes, hoists, and monorails. Crosby’s brands include McKissick and Lebus; Acco’s products bear the Louden and Nutting brand names.
The deal is expected to close in the fourth quarter, pending regulatory approval.
For legal advice on the acquisition, KKR has turned to a team of attorneys at Kirkland & Ellis instead of the buyout firm’s longtime outside counsel, Simpson Thacher & Bartlett, which is advising Melrose on the matter. Chicago-based corporate partner Jeffrey Fine is leading the Kirkland team acting as outside counsel to KKR. Corporate partners Gavin Gordon and Jon Ballis are also working on the deal, as is debt finance partner Linda Myers.
The Simpson Thacher team advising Melrose, meanwhile, is led by London-based corporate partners Adam Signy and Derek Baird. Credit partner Euan Gorrie, antitrust partner David Vann, and tax partner Gary Mandel are also advising.
KKR has turned to Simpson Thacher frequently to handle transactional work over the years. Most recently, the private equity shop hired the firm in connection with its $1.1 billion purchase of Mitchell International last month, as well as its $3.9 billion acquisition of industrial machinery manufacturer Gardner Denver earlier this year. When New York–based KKR decided to hire its first-ever general counsel in 2007, it brought in David Sorkin, a former Simpson Thacher M&A partner who sat on the firm’s executive committee.
In recent years, Simpson Thacher has also taken on a number of representations for Melrose with firms led by Signy, who joined the firm from Clifford Chance in 2009. In June, Simpson Thacher advised Melrose on its $283.5 million sale of Marelli Motori to the Carlyle Group, and in May the firm handled Melrose’s $200 million sale of Truth Hardware to Tyman. Last year, The Am Law Daily reported that Signy led the Simpson Thacher team advising Melrose on the $2.3 billion purchase of German utility meter manufacturer Elster Group. Melrose’s general counsel is former Clifford Chance attorney Jonathon Crawford.
Like Simpson Thacher, Kirkland often lands roles advising some of the world’s top private equity shops, and the two firms often find themselves on opposite sides of larger private equity deals. One such transaction: the $4.4 billion sale of Hub International Limited in August in which Kirkland worked for the seller, Apax Partners, and Simpson Thacher took the lead for the buyer, Hellman & Friedman. (Apax is a part owner of ALM Media, parent company and publisher of The Am Law Daily.)
Wednesday’s KKR–Melrose deal isn’t the first time Kirkland has stepped in for a longtime Simpson Thacher client as the result of a client conflict. Earlier this year, Kirkland advised frequent Simpson Thacher client The Blackstone Group when it launched a bid for Dell Inc. designed to compete with fellow private equity firm Silver Lake Partners in its joint bid with company founder Michael Dell. Simpson Thacher was conflicted out of working with Blackstone because it is advising Silver Lake in the matter. (Blackstone eventually withdrew from the bidding for Dell.)
In 2010 Kirkland advised Accel–KKR, KKR’s technology-focused private equity joint venture, on the $525 million sale of software company iTradeNetwork. And Kirkland corporate partner Sarkis Jebejian joined the firm last year from Cravath, Swaine & Moore, where he had previously advised KKR Private Equity Investors on its public listing through a combination with KKR & Co. in 2009 (Simpson Thacher advised KKR).
Wedensday’s transaction is the latest in a string of private equity deals Kirkland has handled in October. The firm kicked off the month representing the Harlem Globetrotters on Shamrock Capital Advisors’s sale of the barnstorming basketball team to Herschend Family Entertainment Corporation for an undisclosed sum. Kirkland also handled LNK Partners’s acquisition of health club Fitness Connection and advised Tenex Capital Management on its purchase of Walter Meier Tools, both for undisclosed amounts. On Tuesday, Kirkland advised Apax Partners on its purchase of GlobalLogic, with financial terms of that agreement also undisclosed. And Wednesday brought word that private equity firm GTCR called in Kirkland as legal counsel on its $820 million sale of intelligence contractor Six3 Systems to CACI International.