Popeyes. (Photo: WhisperToMe via Wikimedia Commons)
A week after falling short on a $143 billion takeover bid for London-based Unilever plc, Scott Barshay and Paul, Weiss, Rifkind, Wharton & Garrison helped the “Home of the Whopper” add a new a resident from Louisiana.
Barshay, the high-profile M&A partner hired by Paul Weiss last year from Cravath, Swaine & Moore, took the lead last week for Oakville, Ontario-based Restaurant Brands International Inc. on its $1.8 billion cash buy of Popeyes Louisiana Kitchen Inc.
RBI was formed in 2014 through the $11.4 billion tax inversion tie-up between the owners of popular North American fast food brands Burger King and Tim Hortons, the Canadian coffee-and-doughnut giant. Paul Weiss advised Burger King on that deal, a first for the firm on behalf of the hamburger behemoth, owned since 2010 by Brazilian private equity firm 3G Capital Inc.
Warren Buffett’s Berkshire Hathaway Inc., which provided $3 billion in financing for the combination between Burger King Worldwide Inc. and Tim Hortons Inc., now holds a 4.8 percent stake in RBI. Buffett’s holding company previously teamed up with 3G Capital—owner of a 51 percent stake in RBI—on their $28 billion buy of H.J. Heinz Co. in 2013. The $40 billion merger between Heinz and Kraft Foods Group Inc., which yielded roles for dozens of outside legal advisers in 2015, formed Kraft Heinz Foods Co., the company that reportedly turned to Barshay and Paul Weiss for its ultimately unsuccessful proposed megamerger with Unilever earlier this month.
Despite that ill-fated endeavor, Paul Weiss and Barshay soothed their momentary M&A woes by landing a lead role for RBI on its acquisition of Atlanta-based Popeyes. The deal, announced on Feb. 21, is expected to close by early April. Barshay is working with Paul Weiss corporate partner Brian Lavin in representing RBI, whose general counsel, corporate secretary and chief compliance officer is Jill Granat.
Popeyes, founded in New Orleans in 1972, is one of the world’s largest fast food establishments with more than 2,600 locations across the U.S. and in 25 countries worldwide. Fans of the Louisiana-style Cajun chicken chain include baseball legend Hank Aaron, reality television star Kylie Jenner and singer-songwriter Beyoncé, who told Oprah Winfrey back in 2003 that she has a free “Popeyes for life” membership.
King & Spalding, which counseled underwriters on an initial public offering by Popeyes in 2001, is advising its longtime client on the proposed sale to RBI through corporate partners William “Cal” Smith III and Robert Leclerc, IP partner W. Scott Petty, securities litigation co-chair and liability management expert Michael Smith and tax partner Jonathan Talansky, who joined the firm’s New York office a year ago. King & Spalding antitrust counsel John Carroll and senior associates Zachary Cochran and R. Elliott Tapp are also working on the matter for Popeyes.
Harold “Sonny” Cohen has spent more than a decade as the top in-house lawyer at Popeyes, which has watched sales weaken after several years of expansion. (Bloomberg noted that the company’s purchase price represents an impressive valuation for its shareholders.) Lizanne Thomas, partner-in-charge of Jones Day’s southern U.S. region, serves as an independent member of the board of directors at Popeyes. The American Lawyer reported last year on Ford & Harrison’s recruitment of several lawyers who handle labor and employment work for Popeyes.
In other M&A news…
Quinpario Acquisition Corp. 2 / Novitex Holdings Inc. / SourceHOV LLC
St. Louis-based investment firm Quinpario announced on Feb. 21 its purchase of Apollo Global Management LLC affiliate Novitex and HandsOn Global Management LLC-backed SourceHOV to create Exela Technologies, a new company in the financial technology and business services industry. The merger, reportedly valued at $2.8 billion, is expected to close in the second quarter of this year.
Legal Advisers: Kirkland & Ellis and Graubard Miller for Quinpario; Akin Gump Strauss Hauer & Feld and Paul Weiss for Novitex; Willkie Farr & Gallagher for SourceHOV
MacDonald, Dettwiler and Associates Ltd. / DigitalGlobe Inc.
Canadian satellite data operator MDA announced on Feb. 24 its $2.4 billion cash-and-stock acquisition of suburban Denver-based DigitalGlobe, a satellite imagery provider with high-profile customers like social networking giant Facebook Inc. and the U.S. Department of Defense. The deal, expected to close in the second half of 2017, is the largest so far in the consolidating earth-imaging industry.
Legal Advisers: Vinson & Elkins and Stikeman Elliott for MDA; O’Melveny & Myers for DigitalGlobe; Davis Polk & Wardwell for Barclays plc and PJT Partners Inc. as financial advisers to DigitalGlobe
MBK Partners LP / Daesung Industrial Gases Co. Ltd.
The Goldman Sachs Group Inc. and other shareholders, such as South Korea’s Atinum Partners, BlueRun Ventures and Daesung Co. Ltd., agreed to sell 100 percent last week of Daesung Industrial Gases, the country’s second-largest producer of industrial gases. MBK Partners, South Korea’s largest private equity firm, emerged as the acquirer in the roughly $2 billion deal, a record high for a private equity-to-private equity buyout in South Korea.
Legal Advisers: Cleary Gottlieb Steen & Hamilton for MBK Partners; Sullivan & Cromwell for Goldman Sachs and other shareholders
Tronox LLC / The National Titanium Dioxide Co. Ltd. (Cristal)
Stamford, Connecticut-based chemical giant Tronox, a lucrative Kirkland client, announced on Feb. 21 a $1.67 billion cash deal to buy the titanium dioxide business of Cristal, a chemical and mining affiliate of Saudi Arabia’s National Industrialization Co., better known as Tasnee. The transaction, expected to close in the first quarter of 2018, makes Tronox the world’s largest producer of titanium dioxide—a substance used in food coloring and sunscreen—with 11 plants in 8 countries.
Legal Advisers: Kirkland, Willkie Farr and Ashurst for Tronox
Kohlberg Kravis Roberts & Co. LP / Telxius Telecom SA
In an effort to reduce its massive debt load, Spanish telecommunications giant Telefónica SA announced on Feb. 21 an agreement to sell up to a 40 percent stake in its Madrid-based infrastructure subsidiary Telxius to New York-based buyout giant KKR in a $1.35 billion deal. Telxius, which owns and operates nearly 16,000 telecom towers in five countries and a global network of 65,000 kilometers of submarine fiber optic cables, was created one year ago this month by Telefónica. The latter scrapped an IPO for Telxius in September as a result of weak investor demand.
Legal Advisers: Simpson Thacher & Bartlett for KKR
The PNC Financial Services Group Inc. / ECN Capital Corp.
Pittsburgh-based PNC Financial, owner of PNC Bank, also announced on Feb. 21 its $1.25 billion cash acquisition of the U.S. commercial and vendor finance business of Canadian commercial finance outfit ECN Capital. PNC’s purchase of Toronto-based ECN’s U.S. assets is expected to close in the second quarter of 2017.
Legal Advisers: Wachtell, Lipton, Rosen & Katz for PNC; Dechert for ECN