Four Firms Advise Swedish Company's $1.6 Billion Industrial Vacuum Deal

By Tom Huddleston Jr.

Swedish engineering company Atlas Copco is inhaling the United Kingdom's Edwards Group, announcing Monday that it has agreed to pay up to $1.6 billion, including assumed debt, to acquire the supplier of industrial vacuums used in the production of semiconductors.

The transaction's terms call for Stockholm-based Atlas to pay at least $9.25 in cash for each Edwards Group share upon closing—an event expected to come in the first quarter of 2014, subject to the approval of regulators and Edwards shareholders. The purchase price could increase by $1.25 per share should Edwards Group meet certain financial targets this year.

Should Atlas pay the full $10.50 per share—a sum that would value the transaction at $1.6 billion, including roughly $400 million in assumed debt—that figure would represent a 24 percent premium over Edwards' Friday closing price.

Atlas said the Edwards acquisition complements the range of industrial products it already sells around the world, mainly to the construction and mining sectors.

Pillsbury Winthrop Shaw Pittman is advising Atlas on the acquisition with a team led by New York-based corporate partner Stephen Rusmisel.Other New York attorneys on the deal are corporate partner Donald Kilpatrick and associates Courtney Reichuber and Adam Walczak; executive compensation and benefits partner Scott Landau and associate Bradley Benedict; and tax partners James Chudy and Harsha Reddy, and associate Nora Burke. Regulatory senior counsel Aileen "Chuca" Meyer is assisting from Washington, while London-based lawyers are tax adviser Anne Fairpo, and corporate and securities partner James Campbell and counsel Samuel Pearse.

Davis Polk & Wardwell and Weil, Gotshal & Manges are serving as cocounsel to Edwards. New York lawyers on Davis Polk's team include corporate partner Marc Williams, tax partner Kathleen Ferrell and tax associate Avinash Venkatesh. Lawyers based in London are corporate partners Simon Witty and John Banes; tax partner Jonathan Cooklin; and associates Dominic Foulkes, Christian Lang, Joanna Valentine, David Wilson and Reuven Young.

The Weil team's New York lawyers are M&A partners David Blittner and Jaclyn Cohen; corporate associate Jamie Lurie; and executive compensation and benefits associate Adam Mendelowitz. London lawyers are M&A partner Peter King, antitrust partner Doug Nave and associates Alice Brogi, Jamie Lurie, Ellen Marques, Erica Rees, Neil Rigby, Dan Stanton and Oliver Walker.

Cayman Islands firm Maples and Calder is serving as Cayman Islands counsel to Edwards Group, which is incorporated in the Caribbean territory. London-based corporate partner Jack Marriott is working on the matter with associate Matthew Bloomfield.

Steinway Changes Its Tune With $512 Million Sale to Paulson

By Hillary Flynn

Steinway Musical Instruments has accepted an offer from investment firm Paulson & Company, which will purchase the renowned piano maker for $512 million.

Paulson's offer, announced last week, trumps a $438 million bid from Kohlberg Management IV, an affiliate of Kohlberg & Company, that Steinway accepted on July 1 (NYLJ, July 11). Kohlberg will not counter Paulson's offer, effectively ending any chance of a bidding war between the two suitors, according to Steinway's regulatory filings.

Terms of the deal with Paulson call for the investment firm to pay $40 a share for Steinway, a premium of roughly 31.5 percent over Steinway's closing price on June 28, the last day of trading before the deal with Kohlberg was announced.

Kohlberg had offered $35 a share for the Waltham, Mass.–based company, a price that was below two other bids that Steinway received this week: a $38-a-share offer made Monday by an undisclosed asset manager and a $39-a-share offer that Samick Musical Instruments made Tuesday.

But Paulson ultimately emerged as the winner. "At $5 per share more than the offer from Kohlberg, this transaction provides shareholders significant additional value for their investment," Steinway CEO Michael Sweeney said in a statement.

Akin Gump Strauss Hauer & Feld is advising Paulson with an all-New York team led by corporate partner Patrick Dooley that also includes private equity corporate finance partner Brian Kim, mergers and acquisitions counsel Ron Deutsch, and private equity corporate finance counsel Meng Ru. Associates are John Howell, corporate and securities, and Eli Miller from the M&A group.

Steinway is being represented Skadden, Arps, Slate Meagher & Flom lawyers spread throughout Palo Alto, Calif., Los Angeles, Washington, D.C., and Frankfurt. The team is comprised of corporate partners Kenton King and Amr Razzak and counsel Jason Tomita; intellectual property and technology counsel Carrie LeRoy; executive compensation and benefits counsel Michael Bergmann, Alessandra Murata and Ulrich Ziegler; environmental counsel Jane Kroesche; banking partners David Kitchen and K. Kristine Dunn; and tax partner Jessica Hough.

In addition to Skadden, Steinway retained Gibson, Dunn & Crutcher. The all-New York Gibson Dunn team was led by corporate partner John Gaffney, with help from corporate associates Jennifer Wang and Yi Sun.

The same deal teams from both firms represented Steinway in connection with its earlier agreement with Kohlberg, which was advised by Ropes & Gray. As per its original agreement with Steinway, Kohlberg will receive a $6.7 million termination fee.

Unlike that agreement, which included a 45-day go-shop provision for Steinway, there is no such provision in the deal with Paulson. However, Steinway will be allowed to accept a higher unsolicited bid up until the tender offer is closed. And the deal with Paulson is subject to a much heftier termination fee—$13.4 million—if Steinway accepts another offer.

The deal is expected to close in late September, and is subject to regulatory approval.