A trio of Am Law 200 firms have landed lead roles on the latest noteworthy deal in the expanding cybersecurity sector.
The Blackstone Group announced Tuesday that it has agreed to buy an 80 percent stake in Denver-based information security company Accuvant from private equity rival Sverica International. While terms of the deal were not disclosed, various new reports pegged its value at about $225 million, including debt financing. Blackstone’s equity portion of the acquisition is worth roughly $150 million.
Cooley business partner Peter Werner, M&A partner Jamie Leigh, tax partner Bill Morrow, antitrust partner Francis Fryscak, employee benefits partner Renee Deming, labor and employment special counsel Leslie Cancel, technology transactions special counsel Adam Chase and Kristin Leavy and associate Matthew Dunn are representing Sverica on the deal.
The Boston and San Francisco–based private investment firm has previously turned to the firm for counsel on a variety of matters. Cooley is no stranger to cybersecurity companies, having been retained by San Diego–based software security firm Websense last fall to fend off a patent infringement suit, according to sibling publication The Recorder.
As The Recorder reported separately, Cooley also advised the underwriters on a $303.6 million initial public offering last year by Milpitas, Calif.–based FireEye, which an SEC filing shows yielded $1.2 million in legal fees and expenses. FireEye, which makes software designed to bolster firewalls and thwart viruses and other cyberattacks, is one of a handful of cybersecurity companies attracting the interest of investors, in part because the attention it has given to Chinese hackers.
The Am Law Daily reported earlier this year on Cooley’s role counseling computer forensic services specialist Mandiant, which last year issued a detailed report focused on hacking by the Chinese military, in connection with its $1 billion acquisition by FireEye. Cooley also advised the underwriters involved in last week’s sale by the high-flying FireEye of another $1.1 billion in stock.
As it happens, FireEye singled out Accuvant for recognition last year. Both companies, along with Mandiant, are partners on some initiatives, as well as members of the International Association of Security Awareness Professionals, a trade industry group.
Holland & Hart corporate partners Christopher Balch and Samuel Edwards are advising Accuvant—in which Sverica acquired a majority stake six years ago—on its proposed sale to Blackstone along with associate Matthew Senko. All three are based in Denver. Accuvant’s director of legal affairs Patrick Farrelly and senior corporate counsel Alex Ross are also working on the deal.
Simpson Thacher & Bartlett, meanwhile, is advising longtime client Blackstone on its Accuvant acquisition through corporate partner Wilson Neely, finance partner Melissa Hutson, executive compensation partner Gregory Grogan, IP partner Lori Lesser, tax partner Gary Mandel, employee benefits senior counsel Jeanne Annarumma and real estate counsel Krista McManus. Also working on the matter are Simpson associates Genevieve Dorment, Alina Finkelshteyn, Jasmine Kaufman, Richard Kim, Michelle Morad, Seojung Park, Paul Rodriguez, Benjamin Schaye and Nelli Zaltsman.
The New York–based buyout shop, whose chief legal officer is former Simpson M&A cochair John Finley, has once again had Simpson lawyers on speed-dial so far this year. Simpson corporate partner Michael Wolfson in London advised Blackstone last month on its $287 million purchase of a 20 percent stake in Gianni Versace that values the Italian fashion designer at nearly $1.4 billion.
Simpson also counseled Blackstone-backed Polymer Group in January on its acquisition of Brazil’s Companhia Providencia, as well as Blackstone’s $2.8 billion sale of a 50 percent stake in London’s Broadgate real estate development to Singapore’s sovereign wealth fund, according to sibling publication The Asian Lawyer.
Blackstone is also keeping Simpson busy with divestitures. Last month Irving, Texas–based hotel chain La Quinta Holdings, which Blackstone bought for $3.4 billion in 2005, filed papers seeking to raise up to $100 million in an IPO. An SEC filing related to that proposed listing shows Simpson corporate partner Michael Nathan handling the matter for La Quinta, although legal fees are not yet listed.
Even Blackstone’s charitable foundation, which recently announced several new entrepreneurship grants, has Simpson ties. Robert Friedman, a former member of Simpson’s M&A group who headed Blackstone’s in-house legal team prior to Finley, serves as one of the nonprofit’s directors.
The only major recent investment by Blackstone in which Simpson did not play a direct role for one of its largest clients was the private equity firm’s purchase last month of a 44 percent stake in human resources software maker Kronos for $750 million. Simpson advised Kronos, a Chelmsford, Mass.–based portfolio company of Hellman & Friedman, another private equity client of the firm, on that matter. (Kirkland & Ellis took the lead for Blackstone, which partnered with Dechert client GIC Private Ltd. on the deal.)
Blackstone certainly isn’t done dealing. The Wall Street Journal reported this week that Blackstone is teaming up with buyout rival TPG on a potential $5.5 billion bid for industrial automotive parts maker Gates Global, which is owned by Canadian private equity firm Onex and the Canada Pension Plan Investment Board.