Lawyers on Major Transactions

Chadbourne, Kirkland, Gibson Counsel Sale of Herbalife

Nutritional and weight loss product manufacturer Herbalife International Inc., which maintains its headquarters in Century City, Calif., announced last week that it had agreed to be acquired for $685 million by private equity funds Whitney & Co. LLC, based in Stamford, Conn., and Golden Gate Capital Inc., of San Francisco. Herbalife has been on the market since last year, when two shareholders and the wife of Mark Hughes, the founder of the company who died in 2000 from an accidental overdose of alcohol and antidepressants, charged the company’s management with conflicts of interest and demanded Herbalife be put up for sale. Herbalife’s board of directors approved the transaction following receipt of the unanimous recommendation of a special committee comprised of independent directors of the company. In 2001, Herbalife had gross revenues of $1.7 billion, according to a company press release. The deal is expected to close in the late second quarter or early third quarter of this year.

Representing Whitney & Co. for the deal was counsel Kevin J. Curley, vice president and general counsel. Serving as outside counsel to Herbalife for the transaction were Thomas C. Meriam, Bruce J. Rader, Edward P. Smith, William G. Cavanagh, Barry A. Dinaburg, Marjorie M. Glover, Daniel J. O’Neill, John Nyhan, and associates Shane de Burca, Si-Yeon Kim and David Mansolino, of Chadbourne & Parke LLP.

Handling matters for Golden Gate Capital were Jeffrey C. Hammes, Gary M. Holihan, David A. Breach, Jeffrey T. Sheffield and Linda K. Riley Myers, of Chicago’s Kirkland & Ellis.

For its side of the deal, Herbalife called on Jonathan K. Layne, David West, Paul S. Issler, Daniel S. Floyd, of counsel J. Rick Tach� and Malcolm R. Pfunder, and associates K. Casper Partovi, Ellen S. Shallman, W. Stephen Venable Jr. and Catherine A. Cleveland, in the Los Angeles office of Gibson, Dunn & Crutcher.

Wollmuth, Clifford Chance Aid On-line Broker Acquisition

In a deal valued at up to $280 million, ETrade Group Inc., a Menlo Park, Calif.-based on-line broker, announced last week that it would acquire New York-based Tradescape Corp., a direct-access brokerage. Under the terms of the agreement, ETrade will pay $100 million in stock for Tradescape, and will issue an additional $180 million in stock if Tradescape exceeds earning targets and revenue goals for 2002 and 2003. The Tradescape acquisition includes the purchase of Tradescape subsidiaries Momentum Securities LLC, an onsite brokerage firm for individual professional traders, Tradescape Securities LLC, a direct access brokerage firm for active on-line traders, and Tradescape Technologies‘ high-speed direct access trading software, technology and network services, according to a press release issued by ETrade. The acquisition does not include agency brokerage and Tradescape subsidiary Market XT.

Representing ETrade for the transaction were Russell Elmer, general counsel of ETrade Group Inc.; Laura Singer, general counsel of ETrade Securities Inc.; and Mary Ahern, assistant general counsel of ETrade Groups. Also representing ETrade for the deal were Karl A. Roessner, John A. Healy, Richard S. Catalano, and associates Barbara S. Lubliner, Christopher Hoffman, Victoria J. Litz and Steven F. Gatti, of Clifford Chance Rogers & Wells LLP.

Called on to represent Tradescape for the transaction were general counsel Katuria Smith, and counsel Timothy Gladden and Kamran Khan. Serving as outside counsel to Tradescape for the deal were Rory M. Deutsch, David H. Wollmuth, Kenneth G. Alberstadt, and associates Debra M. Burg and Gerald Coviello, of Wollmuth Maher & Deutsch LLP.