Friday night just got more fun for five Am Law 100 firms.
Private equity firm Apollo Global Management announced Thursday that it plans to buy CEC Entertainment, the Irving, Texas–based parent company of family restaurant chain Chuck E. Cheese’s, for roughly $1.3 billion, including $370 million in outstanding debt.
Wachtell, Lipton, Rosen & Katz corporate partners Steven Cohen and Ronald Chen are serving as lead M&A counsel to Apollo on the deal, along with associates Oliver Board, Tsz Hin Kwok and Francisco Morales.
Cohen, who is also advising Charter Communications on its $61 billion bid this week for Time Warner Cable, mostly declined to comment about Apollo’s tender offer for CEC. He did note that though he has never been to one of the Chuck E. Cheese’s 577 establishments, he has promised his client—controlled by billionaire Leon Black—that he will do so before the deal is complete.
Paul, Weiss, Rifkind, Wharton & Garrison is serving as finance counsel to Apollo on the transaction through corporate partners Gregory Ezring and Mark Wlazlo, real estate partner Peter Fisch and associates Catherine Goodall and Xuan “Sophia” Gui.
Ezring and Wlazlo joined Paul Weiss from O’Melveny & Myers in May 2011, the same month that their new firm advised Apollo on its $510 million buy of entertainment company CKX, which owns such television franchises as “American Idol” and “So You Think You Can Dance.”
Wachtell, which like Paul Weiss has been a longtime adviser to Apollo, represented CKX on that transaction. The New York–based buyout shop, whose chief legal officer is former O’Melveny partner John Suydam, is poised to be busy on the transactional front again this year, having recently secured $18.4 billion in capital for more deals.
Some of that largesse has found its way to Apollo’s lobbyists from Brownstein Hyatt Farber Schreck, which received at least $600,000 through the first three quarters of last year for its services on behalf of the private equity giant, according to U.S. Senate records. Brownstein Hyatt was also paid $210,000 back in 2010 to lobby for Memphis-based Verso Paper, about 70 percent of which is owned by Apollo.
The coated paper maker and Apollo portfolio company announced last week it would acquire specialty paper maker NewPage Holdings in another $1.4 billion deal. Kirkland & Ellis corporate partners Taurie Zeitzer and Joshua Kogan are advising Apollo on that matter, along with associates David Beller and David Rosenthal. (Zeitzer joined Kirkland in 2012 from Latham & Watkins.)
Paul Weiss and Morgan, Lewis & Bockius are representing Verso Paper on the transaction, which Reuters reports includes a cash-and-debt load of roughly $900 million.
The target company, Miamisburg, Ohio–based NewPage, is one of North America’s largest producers of paper products. Senate filings show it paid $200,000 last year to Washington, D.C.’s Williams & Jensen for lobbying work on climate change issues. NewPage was advised by Dewey & LeBoeuf when it filed for bankruptcy in September 2011, according to our previous reports. Dewey’s own subsequent bankruptcy filing became an issue in NewPage’s Chapter 11 case, which ended in December 2012.
Sullivan & Cromwell corporate partners Joseph Frumkin and Melissa Sawyer are leading a team from the firm advising NewPage on its proposed sale to Apollo-backed Verso, whose general counsel is Peter Kesser. Other S&C lawyers working on the deal include finance partner Robert Buckholz, executive compensation partner Matthew Friestedt, tax partner Ronald Creamer, IP partner Mehdi Ansari, antitrust partner Daryl Libow, special counsel Matthew Brennan, Joseph Matelis and Henrik Patel, and associates Michael Applebaum, Guy Inbar, Donald Klimoski, Brooke Mickelson, Stephen Miller, Jordan Oreck and Julian Wright.
Should Apollo wish to use its new paper-making prowess to wrap up a delicious slice of Chuck E. Cheese’s pizza, the private equity firm will have to wait until its acquisition of parent CEC is formally approved pending the outcome of a two-week “go-shop” period by the target.
In assessing a potential sale to Apollo, CEC has turned to a team of outside lawyers from Weil, Gotshal & Manges led by Dallas-based corporate partner D. Gilbert Friedlander. Back in 2011, Chuck E. Cheese’s tapped Weil to represent the eatery in connection with a suit filed by a San Diego mother who claimed the chain’s arcade games were actually illegal gaming devices.
Other Weil lawyers working on the matter include corporate partner Raymond Gietz, finance partner Courtney Marcus, tax partner Jared Rusman, corporate governance partner P.J. Himelfarb, capital markets partner Heather Emmel, employee benefits partner Michael Kam, environmental partner Annemargaret Connolly, technology and transactions partner Karen Ballack, antitrust partner Laura Wilkinson, counsel Vadim Brusser and associates Daniel Birnhak, Mark Dundon, Ryan Gorsche, Thomas Goslin, Dilen Kumar, Benton Lewis, Colby McKenzie, Jennifer Seymour and Janell Wise.
Jay Young serves as general counsel for CEC, which has adopted a poison pill that makes it less likely that an activist investor will snap up a large stake in the company to force a higher purchase price, according to The Wall Street Journal. Ropes & Gray M&A cohead Jane Goldstein and associate Zachary Blume are advising Goldman Sachs, the financial adviser retained by CEC.
CEC’s board has approved the company’s sale to Apollo and has recommended that its shareholders do the same. Paul Hastings is advising a group of banking that have agreed to provide financing for the transaction.