Clint J. Gage
Roetzel & Andress

Clint J. Gage handled tough talks over deal-breakup terms to help XPO Logistics negotiate a $75 million stock investment that could grow to $150 million.

Gage was instrumental as the Buchanan, Michigan-based shipping services company obtained a preferred stock investment with attached warrants from the Bradley S. Jacobs Private Equity fund in a deal that closed last September.

Gage, a partner in the Fort Lauderdale office of Roetzel & Andress, faced a relentless legal team deployed by Cravath, Swaine & Moore on behalf of the private equity fund formed by Bradley S. Jacobs of Greenwich, Connecticut.

“Their corporate securities group is 100 attorneys. These guys worked around the clock. I would wake up every two hours for nine months and respond to emails,” said Gage, who has represented XPO Logistics for about nine years.

“I worked every weekend. That’s what we had to do just to keep up with the volume of issues that were being thrown at us by Cravath.”

Gage said Cravath was an impressive opponent also because it brought considerably more day-to-day experience in private equity deals to the table.

“These guys negotiate these terms every day,” he said. “Quite frankly in a firm our size, our corporate securities group may negotiate them once or twice a year.”

Gage’s effort to help XPO sell control of itself began in 2010, but interest among several potential buyers faded as the year wore on.

“We got very close,” he said. “We identified two or three private equity groups that had a very serious interest.”

Then the Jacobs-led fund emerged.

He and his partners invested $75 million in XPO perpetual convertible preferred stock and may invest up to $75 million more by exercising warrants attached to the stock. The fund could own as much as 70 percent of XPO if it exercises all the warrants, which have a 10-year term to expiration.

Gage played a big role in contractually shaping the scenario that would have unfolded if another company had made a better bid for XPO than Jacobs and his co-investors. Part of that negotiation centered on the size of the breakup fee that XPO would have had to pay the private equity fund.

“Those provisions we probably negotiated for three weeks to a month,” Gage said. “They were very, very hotly contested on both sides, almost resulted in the end of the deal on a number of occasions.

“These are among the most complex provisions an M&A [mergers and acquisitions] attorney ever will negotiate.”