Japan’s SoftBank Group Corp. has continued its frenetic deal pace, brokering a $13 billion merger between satellite operators, investing $3 billion in office-sharing startup WeWork Cos. Inc. and taking part in a $500 million fundraising round by online lender Social Finance Inc.
The Tokyo-based telecommunications and Internet behemoth, which last month turned to Weil, Gotshal & Manges and Kirkland & Ellis to handle its $3.3 billion buy of New York-based investment giant Fortress Investment Group LLC, announced late last year the formation of a $100 billion “vision fund” to invest in technology companies. Morrison & Foerster, a longtime legal adviser to SoftBank, was retained to advise the company on that endeavor through Tokyo office managing partner Kenneth Siegel.
SoftBank’s founder and CEO Masayoshi Son orchestrated a complex, $13 billion all-stock merger last week between satellite operator OneWeb LLC and its competitor Intelsat Corp. The deal, announced on Feb. 28 and expected to close in the third quarter of this year, seeks to forge faster Internet connections around the world. Son has already invested $1 billion in Arlington, Virginia-based OneWeb and SoftBank will invest $1.7 billion to acquire a 39.9 percent stake in the company created by OneWeb’s merger with Intelsat.
MoFo’s Siegel, who last year took the lead for SoftBank on its $8.6 billion sale of a controlling stake in Finnish game developer Supercell Oy, is part of a team from the firm currently advising Son’s expanding telecommunications empire on the combination between OneWeb and Intelsat. Robert Townsend, co-chair of MoFo’s global M&A practice, has taken the lead for SoftBank on the matter with corporate partners Lauren Bellerjeau, David Slotkin and Leo Aguilar, tax partner Bernie Pistillo and technology transactions partner Paul Jahn.
Townsend is no stranger to SoftBank deals, having worked with Siegel in handling the company’s $20.1 billion purchase in 2012 of U.S. mobile carrier Sprint Nextel Corp. MoFo won three of The American Lawyer’s Global Legal Awards for its role on that transaction.
Intelsat, which raised nearly $348 million in 2013 through an initial public offering that generated $3.3 million in legal fees and expenses, has been in business since 1964. The Luxembourg-based company was initially founded as an intergovernmental consortium to build and manage communications satellites, but is now laden with some $15 billion in debt stemming from a 2007 buyout.
Wachtell, Lipton, Rosen & Katz and Luxembourg’s Elvinger, Hoss & Prussen are representing Intelsat on its combination with OneWeb, with Sullivan & Cromwell corporate partner Stephen Kotran counseling The Goldman Sachs Group Inc. in its role as financial adviser to Intelsat. Elvinger Hoss advised Intelsat—whose general counsel is Michelle Bryan—on its IPO nearly four years ago.
OneWeb, as opposed to Intelsat, is a fairly new venture. Founded in 2012 by Greg Wyler, the global communications company seeks to use a network of low earth orbit satellites to provide affordable Internet access within the next decade. Through the combination of both satellite companies, SoftBank and its holdings (including Sprint) hope to improve their high-speed Internet capabilities and coverage area.
Ross Vincenti, a former senior counsel at Sprint, serves as OneWeb’s general counsel. Boston-based Choate, Hall and Stewart and Milbank, Tweed, Hadley & McCloy are advising the company on its proposed merger with Intelsat. Luxembourg’s Arendt & Medernech and offshore firm Mourant Ozannes are working with MoFo in representing SoftBank on OneWeb’s deal with Intelsat. Arendt & Medernech advised underwriters on Intelsat’s IPO in 2013.
The deal, which requires the approval of Intelsat’s bondholders, wasn’t the end of Softbank’s week.
SoftBank is also reportedly set to invest more than $3 billion in New York-based office sharing startup WeWork Cos. Inc., which in late 2014 hired Wilmer Cutler Pickering Hale and Dorr partner Jennifer Berrent to be its general counsel. And on Feb. 28, SoftBank was also part of a $500 million investment round by Social Finance Inc., a San Francisco-based online lender that has made news in legal circles for helping associates refinance their law school loans.
The fundraising round was led by Menlo Park, California-based private equity firm Silver Lake Partners LP, which was advised on the matter by Simpson Thacher & Bartlett executive committee chairman William Dougherty. Robert Lavet serves as SoFi’s general counsel is.
In other M&A news…
Perrigo Co. plc / RPI Finance Trust
Perrigo, one of the world’s largest generic drug makers, announced on Feb. 27 the $2.85 billion sale of rights to its multiple sclerosis drug Tysabri to RPI Finance Trust, an affiliate of Dublin-based Royalty Pharma Ltd. RPI will pay $2.2 billion in cash and up to $650 million in potential milestone payments based on Tysabri sales. The deal by Perrigo, which is also now domiciled in Dublin following its 2013 merger with Irish drug company Elan Corp., is expected to close in 30 business days.
Legal Advisers: Wachtell for Perrigo; Goodwin Procter and Matheson for RPI
China National Petroleum Corp. / CEFC China Energy Co. Ltd. / Abu Dhabi National Oil Co.
Abu Dhabi National Oil, better known as Adnoc, has announced plans to raise roughly $2.6 billion from the sale of stakes in the emirate’s onshore oilfield concession. Beijing-based and Chinese state-run CNPC will pay $1.76 billion for an 8 percent stake, according to sibling publication The Asian Lawyer, while Shanghai-based CEFC will pick up a 4 percent stake in the oil venture after paying $888 million to Adnoc.
Legal Advisers: Eversheds Sutherland for CNPC; Herbert Smith Freehills for CEFC; Shearman & Sterling for Adnoc
Comcast Corp. / Universal Studios Japan
Comcast, the nation’s largest cable company, announced on Feb. 28 a $2.27 billion deal to buy the remaining 49 percent stake of Osaka-based Universal Studios Japan that it doesn’t already own from Goldman Sachs and the theme park’s former CEO, Glenn Gumpel. In late 2015, Comcast’s NBCUniversal Media LLC unit bought a 51 percent stake in the theme park for $1.5 billion. The current deal by the New York-based media conglomerate, scheduled to close by the end of April, is a sign of growing confidence in the international theme park industry.
Legal Advisers: Davis Polk & Wardwell and Clifford Chance for Comcast; Simpson Thacher for Goldman Sachs
JD.com Inc. / JD Finance
Beijing-based JD.com, China’s largest online retailer, announced on March 2 plans to spin off its JD Finance business in a transaction slated to raise $2.1 billion in cash. The offloading of JD Finance should be completed by mid-2017. The new standalone company is expected to compete with JD.com rival Alibaba Group Holding Ltd.’s Ant Financial, which in late 2015 hired a top Simpson Thacher partner in China as its general counsel.
Legal Advisers: Skadden, Arps, Slate, Meagher & Flom for JD.com
CC Land Holdings Ltd. / Leadenhall Building
CC Land, a Hong Kong-based real estate company controlled by Chinese tycoon Cheung Chung-kiu, announced on Feb. 28 a $1.42 billion deal to buy London’s Leadenhall Building—better known as the Cheesegrater—from joint owners British Land plc and Oxford Properties Group Inc. The agreement marks the single largest purchase of property in the U.K. since 2014 and comes as investors from China and Hong Kong spend billions to snatch up office space in central London, in part due to the decline of the British pound against the Chinese yuan. The Cheesegrater was completed in 2014 and is fully leased, according to sibling publication Legal Week.
Legal Advisers: Berwin Leighton Paisner for CC Land; Mayer Brown for British Land; Herbert Smith Freehills for Oxford Properties
Tricon Capital Group Inc. / Silver Bay Realty Trust Corp.
On March 2, Toronto-based Tricon Capital announced that it would acquire real estate investment trust Silver Bay in a $1.4 billion deal. Plymouth, Minnesota-based Silver Bay owns single-family properties in nine states—including Arizona, California and Texas—and its absorption into Tricon Capital will double the size of the latter’s American homes unit, creating the fourth-largest publicly owned single-family rental company in the country. The transaction is expected to close by the end of June.
Legal Advisers: Paul, Weiss, Rifkind, Wharton & Garrison and Goulston & Storrs for Tricon Capital; Orrick, Herrington & Sutcliffe for Silver Bay
Henkel AG & Co. KGaA / Darex Packaging Technologies
German chemical and consumer goods giant Henkel made a $1.05 billion cash and debt-free offer on March 2 to buy sealant supplier Darex Packaging Technologies from Cambridge, Massachusetts-based GCP Applied Technologies Inc. The deal, expected to close mid-2017, would allow Henkel to strengthen its adhesives division, while allowing GCP to focus on its core construction and building materials business. GCP was spun off last year by Columbia, Maryland-based conglomerate W.R. Grace & Co.
Legal Advisers: Latham & Watkins for Henkel; Wachtell for GCP Applied Technologies
IberiaBank Corp. / Sabadell United Bank NA
IberiaBank struck a deal on March 1 to buy Miami Lakes, Florida-based Sabadell in a nearly $1.03 billion cash-and-stock transaction. The potential acquisition of one of the largest banks in Florida will bolster IberiaBank’s business dealings in the Sunshine State, making it the largest state by deposits for the Lafayette, Louisiana-based franchise. IberiaBank will fork over $803 million in cash as part of the deal.
Legal Advisers: Simpson Thacher for IberiaBank; Hunton & Williams for Sabadell