(Courtsey Alstom Transport)
Two Magic Circle firms have landed the lead roles on U.K. private equity group Triton Partners’ purchase of the thermal power division of French manufacturer Alstom for roughly $1 billion.
Linklaters is advising Triton on the purchase, which is expected to close in the first half of the fiscal year, while Alstom has enlisted the legal services of Freshfields Bruckhaus Deringer.
The deal, which was announced Tuesday, is part of Alstom’s previously stated strategy to divest some of its noncore assets in order to raise money and pay down some of the company’s debt. Alstom is best known for designing and manufacturing various types of high-speed trains as well as power generation systems that include boilers, generators and turbines.
The Alstom unit being acquired by Triton produces air preheaters and gas heaters used in thermal power plants as well as heat transfer equipment. The business, which employs more than 1,500 people and has annual revenues of more than $590 million, is headquartered in Germany with additional operations in Brazil, China, the Czech Republic, India, Japan, Switzerland and the U.S.
Alstom began soliciting bids for the unit in January, with Reuters reporting at the time that the business was drawing interest from private equity firms including Advent International, Bain Capital, Pamplona Capital and Triton, among others. Reuters reported Tuesday that Triton narrowly beat out Bain to reach an agreement with Alstom, which has seen its debt mount thanks, in part, to a decrease in power equipment sales to utilities. The company said in November that it would consider divestments as a way of making money it could use to pay down debt as well as explore potential acquisitions.
Alstom has also come under fire over the past year for the behavior of some of its executives, several of whom have been charged with attempting to bribe Indonesian officials in order to secure some of that country’s utility contracts. The New York Times reported last month that Alstom could be facing significant fines for potential violations of the Foreign Corrupt Practices Act, adding that the company’s stock prices had been declining since news of the U.S. Justice Department’s investigation broke. Washington, D.C.-based Patton Boggs litigator Robert Luskin is representing the company in connection with the investigation, according to Bloomberg.
M&A partners Rainer Traugott and Scott Sonnenblick—based in Munich and New York, respectively—are leading the Linklaters team advising Triton on the deal, with Linklaters associates Florian Harder and Megan Ridley-Kaye also working on the matter.
The firm has a history of representing Triton on transactions with German components. In November 2012, Linklaters worked on the acquisition of German home and garden products company Terrasan Haus + Gartenbedarf by a Triton portfolio company. Later that month, the firm advised Triton on the sale of German logistics company Dematic to a group led by AEA Investors. The financial terms of either deal was not disclosed.
Although Triton has called on Freshfields for legal matters in the past as well—including Triton’s $1.4 billion purchase of an industrial waste unit from Spain’s Abengoa last year—this time the Magic Circle firm is on the other side of the negotiating table as Alstom’s adviser on the sale of its thermal power unit.
Paris-based corporate partners Alan Mason and Olivier Rogivue are leading a Freshfields team that also includes corporate partners Doug Bacon, Takeshi Nakao, Annedore Streyl and Alan Wang. Tax partners Antoine Colonna d’Istria and Georg Roderburg are also advising, along with finance partner Emmanuel Ringeval and employment, pensions and benefits counsel Laurence Harvey Wood. Freshfields associates on the deal are Camille Chiari, Ludovic Geneston, Alexis Hojabr and Pierre-Arnoux Mayoly. Alstom’s general counsel is Keith Carr.
German legal publication JUVE is reporting that Latham & Watkins advised Bain on its failed bid to buy the Alstom unit and that the firm is also representing Triton’s financial advisers, who were not identified, on this latest deal. Two Latham spokespeople did not immediately return The Am Law Daily’s request for comment.