United Technologies Corp. (UTX:US) agreed to sell its Hamilton Sundstrand industrial unit to Carlyle Group LP (CG:US) and BC Partners for $3.46 billion as the company raises cash to pay for aerospace supplier Goodrich Corp. (GR:US)
Latham & Watkins LLP is advising BC Partners and The Carlyle Group in the transaction. Wachtell, Lipton, Rosen & Katz is advising United Technologies.
Latham’s corporate deal team led by Washington partners Daniel Lennon and Paul Sheridan. The firm also advised on bank finance, capital markets and bonds, tax, antitrust, employee benefits, intellectual property and technology, real estate, and environmental matters.
Trevor S. Norwitz is the lead corporate partner for Wachtell. Additional lawyers on the deal include: corporate partner Igor Kirman; antitrust partner David A. Schwartz; executive compensation and benefits partner Jeremy L. Goldstein; and tax partners T. Eiko Stange and Joshua M. Holmes.
The transaction will be financed with equity from the firms and third-party debt from a group of banks, London-based BC Partners and Carlyle Group said July 25 in a statement. The deal with Hartford, Connecticut-based United Technologies is expected to close in the fourth quarter, the companies said.
Chief Executive Officer Louis Chenevert is now a step closer to completing his fundraising for the $16.5 billion Goodrich purchase announced last year.
United Technologies raised $9.8 billion in May in the largest U.S. corporate bond offering in more than three years to help pay for Goodrich, an acquisition that will let Chenevert add the biggest maker of aircraft landing gear to brands that include Pratt & Whitney jet engines and Sikorsky helicopters.
Hamilton Sundstrand Industrial consists of three businesses: Sundyne, a maker of high-speed pumps and compressors used in oil and gas applications and chemical/industrial infrastructure; pump-maker Milton Roy; and Sullair, which produces compressors used to power air-driven industrial equipment and tools.
“While these are strong, profitable companies with solid customers and continued promising outlooks, they are not part of UTC’s core of aerospace and building systems,” Chenevert said in a statement. Raymond Svider, co-chairman of BC Partners, called Hamilton Sundstrand Industrial “a world-class platform.”
Carlyle, the Washington-based firm that oversees more than $159 billion, will make the Hamilton Sundstrand Industrial investment from its fifth flagship buyout fund, Carlyle Partners V. The fund began investing in 2007 with $13.7 billion and had a net internal rate of return of 10 percent as of March 31, according to Carlyle. Its other investments include BankUnited Inc., HD Supply Inc. and Syniverse Technologies Ltd.
BC Partners, which owns companies including gym operator Fitness First Ltd. and casino operator Regency Entertainment SA, said it has 12.6 billion euros ($15.3 billion) of advised funds.
Latham was also involved in a second deal announced yesterday. The firm advised Odyssey Investment Partners, LLC, which announced that it acquired L-com, Inc., a provider of wired and wireless connectivity products to original equipment manufacturers, system integrators and network installers across diverse end markets. Financial terms of the transaction were not disclosed.
Latham’s New York corporate deal team was led by partners John Giouroukakis and Howard Sobel. Advice was also provided by New York partners Kirk Davenport and Dennis Lamont on finance matters; New York partner Bradd Williamson on benefits & compensation matters; New York partner David Raab on tax matters; New York partner Steven Betensky on intellectual property matters; New York counsel David Langer on environmental matters and Hong Kong partner Allen Wang on matters related to Chinese law.
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Human Genome Investors Denied Extra Time to Weigh Glaxo Deal
Human Genome Sciences Inc. (HGSI:US) investors lost a bid to extend GlaxoSmithKline Plc (GSK)’s deadline today to decide whether to tender their shares for a $3 billion buyout.
U.S. District Judge Sue L. Robinson ruled yesterday in Wilmington, Delaware, that the shareholders aren’t entitled to more time to consider the offer, saying they won’t be harmed and haven’t demonstrated a likelihood of success in their suit.
Glaxo and Human Genome “followed the tender offer rules ‘just like a cookbook,”’ Robinson wrote in her nine-page decision.
Skadden Arps Slate Meagher & Flom LLP represented Human Genome and the individual directors defendants in this matter.
The investors yesterday also lost a parallel action in state court in Rockville, Maryland, where Human Genome is based, according to David Clarke, a DLA Piper LLP lawyer who represents the company in that case.
“The judge found that the disclosures were adequate,” and rejected the shareholders’ request for more information and time, Clarke said in a phone interview.
The ruling couldn’t be immediately confirmed in court records.
Glaxo, the U.K.’s largest drugmaker, agreed to acquire Human Genome for $14.25 a share, according to a statement on July 16. London-based Glaxo sought to acquire its Benlysta lupus treatment partner for months, offering $13 a share in April. The deal accepted by Human Genome’s executives is valued at $3.6 billion including debt and cash.
The shareholders argued they needed more time “to digest” Glaxo’s new offer because of a $1.25-a-share increase in the offer on July 16, according to Robinson’s ruling.
Blake A. Bennett, a lawyer representing the shareholders, said in a phone interview he couldn’t immediately comment on the ruling.
Skadden attorneys Edward Welch and Edward Micheletti, who represented Human Genome and its directors in the Delaware case, declined to comment on the decision.
The cases are David v. Human Genome Sciences Inc., 12-CV- 965, U.S. District Court, District of Delaware (Wilmington); and Howell v. Watkins, 3625331, Circuit Court for Montgomery County, Maryland (Rockville).
Yukos Investors Win Tribunal Award From Russia, Lawyers Say
Spanish investors in jailed former billionaire Mikhail Khodorkovsky’s Yukos Oil Co. won an arbitration award from Russia, which nationalized the company, the plaintiff’s lawyers said.
Covington & Burling LLP, which represented the Spanish investors, said in a statement July 25 that the Stockholm Chamber of Commerce’s arbitration arm ruled that Russia used “illegitimate” tax bills to bankrupt and nationalize Yukos, which it valued at $60 billion.
“This ruling vindicates the rights of Spanish investors, and indeed, all investors in Yukos,” said Marney Cheek, a partner at Covington & Burling, in the statement. The law firm last year estimated that claims against Russia related to Yukos by minority investors were about $10 billion.
Yukos was dismantled and sold at auction, mostly to state- run OAO Rosneft (ROSN), to cover billions of dollars in back taxes after Khodorkovsky was arrested in 2003. Khodorkovsky, once the richest man in the country, is serving 13 years in prison for two separate convictions for fraud and tax evasion. He says he was targeted by President Vladimir Putin for financing opposition parties, an accusation the Kremlin denies.
Suvi Lappalainen, a spokeswoman for the Swedish tribunal, said confidentiality rules prevent the body from commenting on individual cases. All rulings are “enforceable,” she said by phone yesterday. The case was filed under a bilateral investment treaty between Russia and Spain.
“There is nothing to comment on here,” Sergei Storchak, the Russian deputy finance minister who oversees foreign debt, said in an e-mail yesterday. “The press release is empty and doesn’t even give the compensation amount. Most of the text is dated.”
The U.S. and European Union criticized Khodorkovsky’s latest conviction in December 2010, saying it showed a failure to respect the rule of law that was harmful to the investment climate.
The Dutch remnant of Yukos, run by former management of the company, received $425 million from Rosneft in August 2010 after a Dutch court ordered it to repay loans granted before nationalization.
Edwards Wildman Appoints Debt Finance, Capital Markets Co-Chair
Matthew V.P. McTygue has been appointed co-chair of the debt finance and capital markets group at Edwards Wildman Palmer LLP. He joins James I. Ruben, who is resident in the firm’s Boston office, in leading the practice.
Based in Boston, McTygue’s practice focuses on debt finance. He represents private equity and venture capital firms, investors, commercial lenders and private companies in a range of business and financing transactions, including senior, mezzanine, subordinated and venture debt financings, restructurings and recapitalizations, leveraged buyouts, mergers and acquisitions, private equity financings and corporate matters, the firm said.
In addition, he serves on the firmwide advisory board, co- chairs the firm’s technology committee and chairs the Boston office diversity committee.
Edwards Wildman has a large and sophisticated Debt Finance and Capital Markets Practice that represents global financial institutions, banks, finance companies, insurance companies, hedge funds and other institutional lenders, including Bank of America, CIT, JPMorgan Chase Bank, TD Bank, RBS Citizens, and Wells Fargo, and represent most of the 10 largest banks in the U.S.
The firm has 14 offices in the U.S., Europe and Asia.
SNR Denton Hires Real Estate Lawyer in Chicago
Scott Toban has joined SNR Denton LLP in the Chicago office as a partner in its real estate practice. Toban was most recently principal and general counsel of the Real Estate Institute, an education provider for the real estate brokerage and mortgage brokerage industry, the firm said.
Prior to that, Toban was a partner at Mayer Brown LLP, after first practicing as an associate in the real estate practice of Sonnenschein Nath & Rosenthal LLP, one of SNR Denton’s founding firms.
“Scott is an extremely talented lawyer with a rare combination of law firm, business and government experience that adds a new dimension to our broad-based real estate practice,” Robert Fernandez, practice leader for SNR Denton’s U.S. Real Estate team said in a statement.
Toban has more than 17 years of combined experience as a commercial real estate and finance lawyer. He has advised companies and individuals on transactions, regulatory issues and compliance matters, mergers and acquisitions, policies and operations. He has experience representing institutional investors, secured lenders, developers, property managers and real estate brokers in a multitude of real estate and finance matters.
SNR Denton has 16 U.S. offices, and a total of 60 locations including associate firms and special alliances world-wide.
TARP Report Questions Fees to Firms; Says Simpson Overbilled
A government report to Congress questions some of the fees paid to big law firms in relation to the Treasury’s Troubled Asset Relief Program and claims Simpson Thacher & Bartlett LLP overbilled the federal government $96,500, The American Lawyer Magazine reports.
The special inspector general’s report, or SIGTARP report, says that in over charging the government, Simpson billed $69,000 at rates higher than permissible and that $22,500 in costs were charged that weren’t allowed according to the contract.
The report also asked the Treasury to look at whether almost $8 paid to four firms was permissible, an issue first raised in a similar report last fall, the magazine said. They included: almost $5.8 million to Simpson Thacher; almost $2 million to Cadwalader Wickersham & Taft LLP; $147,000 to Locke Lord LLP and $58,000 paid to McKee Nelson LLP, which Bingham McCutchen LLP acquired in 2009, AmLaw reported.
John Rapisardi, co-chair of Cadwalader’s restructuring practice said in an e-mail, “Cadwalader’s efforts and success on behalf of our country and the nation’s treasury related to the auto industry crisis and were provided under extraordinary time pressure. The fees charged by Cadwalader with regard to that effort were accurate in all respects and eminently reasonable given the discounts provided and the staffing required.”
Simpson Thacher and Lock Lord did not respond to an e-mail or phone call requesting comment. Bingham declined to comment.
TARP expired in October 2010, though the Treasury continued to pay 13 firms to help run related programs, AmLaw reported. Cadwalader topped the list of firms with $21.9 million paid for auto restructuring and bankruptcy advice, the magazine said. Six more were paid more than a million. They are: Simpson Thacher, $6 million; SNR Denton LLP, $4,6 million; Hughes Hubbard & Reed LLP, $4.5 million; Squire Sanders LLP, $3.6; Paul, Weiss, Rifkind, Wharton & Garrison LLP, $2.9; and Venable LLP, $1.4 million, according to the magazine.
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