Dealmakers of the Year
Design by Hyeon Jin Kim/ALM Illustration by Lorenzo Petrantoni
Melissa Sawyer, Isaac Wheeler & Eric Krautheimer Sullivan & Cromwell
hen teams from Sullivan & Cromwell and Debevoise & Plimpton were tasked with shearing off WarnerMedia’s news and entertainment assets from AT&T and combining them with Discovery, they had two weeks to execute on a deal structure that ordinarily would require four to eight months of effort. “This is an industry where everybody knows everybody. There was a strong sense on both sides of the deal that we didn’t want this to leak. We wanted to do it when we had momentum and commitment and a powerful narrative of the industrial logic behind this,” says Debevoise corporate department chair Jeffrey Rosen, who represented Discovery along with colleagues Sue Meng and Jonathan Levitsky. The deal was structured as a Reverse Morris Trust, with the WarnerMedia unit spun off from publicly traded AT&T and then positioned to acquire Discovery. This mechanism ensured that the entire transaction was tax-free. “Spinoffs from a tax perspective are inherently complex and highly technical, and when you add on Reverse Morris Trusts, the complexity multiplies,” says Isaac Wheeler, co-head of Sullivan & Cromwell’s tax group. “The other element of this transaction that adds even more complexity is just the sheer size. This was the largest Reverse Morris Trust in history.” Another wrinkle came from the need to create a special committee to work out issues with two Discovery shareholders holding large voting blocks. There was also $43 billion in financing on the line. “We had fully negotiated five or six different agreements. None of them are simple agreements. They require a lot of thought, a lot of discipline,” says Sullivan & Cromwell partner Eric Krautheimer. “You could throw an entire firm at something, but that’s not efficient nor practical for confidentiality reasons. You need to have a core group of people who have command over everything.” Unfolding as COVID-19 vaccinations became broadly available in the spring of 2021, the work offered “a way of testing out whether complex transactions can get done in a hybrid environment,” according to Sullivan & Cromwell M&A global head Melissa Sawyer. She hadn’t seen Krautheimer in person in two years until they showed up in a conference room to start negotiating, and then they brought in Wheeler on nightly Zoom sessions. Their counterparts at Debevoise also found value in getting the work done in both physical and virtual rooms concurrently. “We enjoyed a very good relationship with Eric and Melissa. It’s important when doing a complex transaction of this type to have some amount of in-person contact,” Levitsky says. “What we’ve learned is combining those things allows deals to move along at a clip that wasn’t available otherwise.” —Dan Packel
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Ryland West/ALM
Jonathan Levitsky, Jeffrey Rosen & Sue Meng Debevoise & Plimpton
BACK TO THE TOP
Mark Stevens, Michael Brown & Ran Ben-Tzur Fenwick & West
very few years, the attorneys at Fenwick & West seem to handle an initial public offering for a company that’s breaking the mold. From Oracle to Electronic Arts to Pixar, the firm’s lawyers are familiar with companies whose novel business models and risk factors add complexity to the IPO process. So when cryptocurrency exchange Coinbase was ready to list, Fenwick was ready, too. “When they came out they didn’t have any directly comparable public companies they were patterning themselves after,” says Mountain View, California-based corporate partner Mark Stevens, who worked alongside partners Michael Brown and Ran Ben-Tzur on the IPO. “That’s the nature of the practice in the Valley.” Representing a company whose goal is to disrupt financial systems—both for its customers and for itself—posed a series of challenges throughout the IPO process. The fact that it was the first major direct listing on NASDAQ only added to the pressure. The Securities and Exchange Commission review was atypical, drawn out as the agency determined how to handle the country’s first major crypto listing. It didn’t take long for the Fenwick team to get on a first-name basis with the SEC examiner handling the matter, calling every day to keep things moving along and educating regulators along the way about the ins and outs of the rapidly evolving crypto industry. In keeping with Coinbase’s ethos of democratizing finance, it wasn’t satisfied with going quiet during the registration process. “The hard-and-fast rule that you’re limited in what you can say didn’t work for a company like Coinbase,” Brown says. With that in mind, the company did a first-of-its-kind Ask Me Anything session on Reddit to field questions from the public about the IPO. “The first time Ran and I were on the phone with our examiner, he repeated it two or three times,” Brown says. “‘Wait, you want to do what?’” With the SEC’s blessing, it went off without a hitch. So did the fully remote company’s delicate evasion of the requirement that an S-1 include an address (a footnote explained the lack of headquarters) and the front-page nod to Satoshi Nakamoto, the pseudonym of bitcoin’s creator. Both moves were received warmly by Coinbase and its customers. For Juan Suarez, vice president and deputy general counsel of Coinbase, the listing, which valued the company at nearly $86 billion, was authentic to the exchange’s mission. It offered validation of the maturation of both the company and the industry, he says. “It wasn’t that long ago … that there were people in the government who thought this technology was at best a joke and at high risk of being illegal in lots of different ways,” Suarez says. “Fast forward six or eight years later, to then have one of the biggest listings in the history of NASDAQ, it’s just a hell of a journey.” —Ben Seal
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Jamie Rector
Gerold Niggemann & Kenneth Lefkowitz Hughes Hubbard & Reed
hen Kenneth Lefkowitz and Gerold Niggemann of Hughes Hubbard & Reed and Sarah Davis of Ropes & Gray evaluated the merger between Singapore-based ride-hailing company Grab and SPAC Altimeter Growth Corp., they knew there was plenty of work ahead. In what would become the largest special purpose acquisition company merger of 2021, at $39.6 billion in value, Lefkowitz, Niggemann and Davis handled a cross-border transaction with multiple stakeholders (including SoftBank, Uber, Toyota and Didi) and several financing partners across multiple time zones that needed to close within six weeks. “The thing that made this deal unique was all the parties involved in this deal,” says Lefkowitz, whose team represented Grab. “Not often does a transaction of this magnitude occur with people located all over the world. The target is operating in nine countries in Southeast Asia, the SPAC is in California, we are in New York and we have shareholders around the world.” To add to the complexity, Davis says the matter wasn’t just an M&A deal, nor a public offering nor a private investment in public equity. “These de-SPAC deals are a three-for-one,” says Davis, who worked on the deal led by Paul Scrivano, who left Ropes & Gray for Davis Polk & Wardwell in late February. “M&A, PIPE and the public offering. Having expertise in M&A and capital markets was really useful, and it was a natural point of entry for Ropes.” This level of complexity coupled with the geographic spread of the deal required the lawyers to work out some key elements. For starters, there would need to be a structure in place to deal with the compressed time frame and the time differences. “We created an hour-by-hour project plan, not just on eastern U.S. time, but for Palo Alto, California, for the Caymans and Asia,” Davis says. Niggemann says the teams across firms were essentially working and sleeping in shifts. “We were able to maximize our time each day,” he says. “Due to the overlap of the time zones we were able to get the most out of every 24 hours.” Work could be done on Eastern time and sent to Asia to be continued, before swapping hands once again when attorneys on the East Coast awoke the next morning. But in order for that scenario to play out, the primary firms involved—Hughes Hubbard, Ropes & Gray and Skadden, Arps, Slate, Meagher & Flom (which acted as co-counsel with Hughes Hubbard for Grab)—needed to have a strong enough working relationship to trust each other to get their share done correctly and on time. “We lucked out that between Ropes, Hughes and Skadden we really all did get along,” Davis says. “We were all excited to be part of a history-making deal.” The teams hit their deadlines and finished with the largest-ever Southeast Asian listing in the United States. —Patrick Smith
Peter Vidor
Marc Jaffe Latham & Watkins
Tad Freese Latham & Watkins
n a record-breaking year for the capital markets, one company roared to life unlike any other. Electric vehicle maker Rivian Automotive raised $11.9 billion in an upsized offering, in the largest IPO in 2021 and the seventh-largest IPO in U.S. history. The size of the deal was a milestone in itself—at $66.5 billion, it was the fifth-highest valuation ever—but more notable for Latham & Watkins’ Marc Jaffe and Tad Freese was the task of crafting a compelling narrative for a company without a clear history of revenue generation. In fact, Rivian’s first vehicle rolled out just two months prior to the transaction. The team set about “telling a story for a company that had very high market valuation expectations, making sure to do it in a way that investors could understand what was coming without exposing them to too much risk,” Freese says. While Jaffe and Freese are no strangers to advising industry innovators such as Airbnb and Spotify, this was also a company “operating in a vertical that had for 100 years been dominated by very few players,” Jaffe says. Unlike the direct-to-consumer sector, the automotive space rarely sees a major disruptor enter the field. Flashy product art aside, the narrative centered on the vision of the company’s board and founder/CEO RJ Scaringe “that the world will pivot away from fossil fuels toward electric vehicles,” Freese says. Rivian is further distinguished in its focus on trucks and SUVs. “One of the great thrills of our work is being able to help incredible visionaries access the capital markets and go further on their journey to realizing their inventive dreams,” Jaffe adds. Jaffe notes that the transaction occurred during an incredibly active year. That is why he and Freese—who have both been at Latham for over 27 years and are based in New York and the Bay Area, respectively—along with capital markets partner Alison Haggerty and a team of associates, collaborated to provide the highest level of coverage and a diversity of perspectives. And the deal work, highlighting the “E” in environmental, social and governance initiatives by conveying Rivian’s plans to develop a worldwide vehicle charging network and create land conservation areas for vehicle owners to foster a community, is indicative of a larger trend, according to Jaffe and Freese. “We expect to see an increasing amount of focus on ESG initiatives in the capital markets, not just for IPOs but for companies that have already gone public,” Freese says. “We’re only going to see more and more of that.” —Jessie Yount
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Ting Chen Cravath, Swaine & Moore
n a year when regulators around the globe stepped up scrutiny of pharmaceutical M&A, Cravath, Swaine & Moore partner Ting Chen led a six-person team in counseling lab equipment provider Thermo Fisher Scientific through its $17.4 billion acquisition of PPD, a provider of clinical research services. Closed in early December, the merger opens the door for Thermo Fisher to expand its pharmaceutical services business, the company has said. It was Thermo Fisher’s largest acquisition to date and the first time Cravath represented the Waltham, Massachusetts-based company. Negotiating the deal, from first offer to signing in April 2021, took less than two months, with dealmakers haggling over the purchasing price in the hours before parties entered the definitive merger agreement, Chen says. Thermo Fisher’s closing risk was minimized by structuring the transaction such that written consent from PPD’s majority shareholders approving the transaction was delivered shortly following the signing. “Our client and the target were very focused on this transaction, so it was a very intense and focused 50 days,” Chen says. The deal took place against a backdrop of an “unusually dynamic regulatory environment,” Chen says, which created uncertainty for pharma acquirers and targets. In March 2021, the Federal Trade Commission announced the formation of an international task force to scrutinize pharma mergers for anti-competitive behavior. Globally, countries were expanding their foreign direct investment regulatory regimes—a trend that was accelerated by the pandemic, according to Chen. This introduced questions for Chen and colleagues about how to approach filing obligations for jurisdictions where regulators’ approach to pharma M&A was in flux. “It was clear from negotiating the transaction that countries had already announced they were considering a wider range of businesses that could be critical or sensitive because of the experience from the pandemic,” she says. The moving target of shifting regulatory regimes required a “surgical” approach to structuring closing conditions to account for any potential regulatory developments between signing and closing, Chen says. The Cravath team addressed the risks, in part, by including conditions for specified jurisdictions, so that, given certain regulatory triggers, merger control clearance in those jurisdictions would be a closing condition. For a global business like Thermo Fisher, Chen says, it was “critical to ensure the merger agreement thoughtfully contemplated and addressed the various regulatory developments that could come up before closing.” —Justin Henry
John Rapisardi O’Melveny & Myers
hen Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act in 2016 to address the commonwealth’s financial crisis, John Rapisardi began visiting the island, with his firm’s support, to better understand what was happening. As chair of O’Melveny & Myers’ global restructuring practice and a veteran of the government’s task force to restructure General Motors and Chrysler, he thought he might be able to help. He began interviewing lawyers, accountants, economists, professors, businesspeople, even hospital administrators—anyone who could give him a better sense of how Puerto Rico had fallen into crisis and how it could make it through. Over time, Rapisardi developed a series of memos analyzing the situation, a compendium he referred to as “the phone book.” And after he presented what he’d found to the government, he and his team at O’Melveny were hired to represent its interests in early 2017. “Representing the auto task force, I always felt an awesome responsibility to save jobs, and it came at the time of the economic crisis,” Rapisardi says. “This had an extra emotional element added to it, compounded by the catastrophes that took place.” Those catastrophes—not just devastating hurricanes and earthquakes, but also a protest-fueled leadership transition and a pandemic—complicated the effort to reduce Puerto Rico’s debt to a manageable level and kickstart economic growth. But as the island’s creditors and the oversight board managing its budget through the recovery jostled for control, Rapisardi and his team ensured the government (and the people of Puerto Rico) had a seat at the table in the negotiating room and the courtroom. “This wasn’t just any ordinary bankruptcy or restructuring,” Rapisardi says. “There were a lot of lives at stake and a lot of suffering that was compounded by everything that happened.” An early court victory rejected the oversight board’s appointment of a chief transformation officer, preserving the government’s voice in the process. When the board approved a fiscal plan in 2021, it was the first time in six years that the government wasn’t forced to reduce expenses, according to Omar Marrero, Puerto Rico’s secretary of state and representative before the oversight board. The restructuring has so far reduced Puerto Rico’s debt by more than 50%, shaving away tens of billions while also restoring the territory’s credit and preserving pension benefits that had come under attack and threatened to push public retirees into poverty. Marrero says that for Puerto Rico and its people, the best days are now ahead, and Rapisardi and his team were integral in plotting a sustainable path forward. “We provided the political will,” Marrero says. “They provided the legal expertise.” —Ben Seal
Eleazer Klein Schulte Roth & Zabel
n 2021, Schulte Roth & Zabel shareholder activism partner Eleazer Klein assisted a newly formed investment fund, Engine No. 1, in a historic proxy contest that won three seats on the ExxonMobil board of directors. It was the largest activist proxy fight ever, and culminated in what Klein calls a “watershed moment” in shareholder activism related to environmental, social and governance issues. The representation fit right into Klein’s wheelhouse. Schulte Roth’s bread-and-butter work, he says, is representing hedge funds, credit funds and venture capital funds. “Our philosophy is geared to representing those people, with ESG a big presence,” says Klein, who is chair of the firm’s M&A and securities group and co-chair of its global shareholder activism group. Engine No. 1 was formed just months before the Exxon proxy fight, and the fund owned less than 1% of the company’s shares. But, Klein says, Exxon was a natural target: an iconic American company that was underperforming as ESG rose in prominence. While Engine No. 1 is focused on using ESG data to drive economic value, Klein says it was a “gutsy move” for the firm to launch the proxy fight with Exxon—and spend into the eight figures to try to drive change. Klein and his team focused on two things: handling the regulatory filings and advising on strategy. “You have to be able to look at a company and evaluate it in terms of vulnerability and roadblocks,” he says. The proxy battle, launched in December 2020, culminated in a vote in May. “Engine No. 1 was very thoughtful. Their platform wasn’t that Exxon should abandon fossil fuels,” Klein says, but rather that the company “could actually be at the forefront of improving society.” David Swift, chief operating officer of Engine No. 1, says Klein was “a key resource” in the fund’s fight. “His legal insights and thought leadership were instrumental for us,” Swift says. There weren’t any unexpected challenges during the proxy battle, Klein says, in part because Engine No. 1 had already received public support from large pension funds and the backing of leading proxy advisers. Klein was temporarily dismayed when Exxon adjourned the shareholder meeting midway through to take a break. He feared the company would use the time to persuade shareholders to switch their votes. But an hour later, the meeting reopened and Exxon accepted the results—and the significant change they brought. —Brenda Sapino Jeffreys
Pankaj Sinha Skadden, Arps, Slate, Meagher & Flom
n his 30 years as a mergers and acquisition lawyer, Pankaj Sinha had never handled a significant deal calling for two companies to swap assets—until 2021, when he represented PPL Corp. in its $10.8 billion sale of Western Power Distribution to National Grid, and its simultaneous $3.8 billion acquisition of Rhode Island’s Narragansett Electric Co. from National Grid. “The deal made perfect sense to the two companies,” says Sinha, a partner and practice leader for M&A in Skadden, Arps, Slate, Meagher & Flom’s Washington, D.C., office. PPL, an energy company with headquarters in Allentown, Pennsylvania, and utilities in Pennsylvania, Kentucky and the U.K., engaged Sinha on the transaction in the fall of 2020. The client wanted to become an all-U.S. company and focus more on green energy. National Grid wanted to acquire a sizable U.K. business and move toward green energy itself, he says. “The swap deal really was two transactions all at the same time,” Sinha says. The parties signed an agreement in March 2021. The English deal closed in June, but the U.S. portion was set to wait until this March for regulatory approval. The deal cleared one final hurdle in late February, when the Rhode Island Division of Public Utilities and Carriers approved the transaction. Under the agreement, PPL received $10.8 billion in cash for the sale of the U.K. utility to National Grid. Once the Rhode Island utility deal is complete, PPL will pay $3.8 billion in cash to National Grid, Sinha says. It was a challenge to manage the timing of both transactions so they would “be at the same crossroads” at the same time, even as the U.S. and the U.K. use different kinds of agreements, Sinha says. The COVID-19 pandemic and Brexit had an effect on the deal as well. In some ways, COVID made the deal easier, Sinha says, because of the use of video calls. Instead of lawyers traveling for meetings, they could bridge continents over Zoom, sometimes switching back and forth between video calls, which Sinha says was a time-saver. However, he notes, the inability to have sidebars out in the hall to work things out complicated the effort. Under Brexit, the U.K. left the European Union at the end of 2020, leading to uncertainty about which rules applied as the circumstances changed in 2021. For example, before Brexit, the antitrust review for the U.K. side of the deal would have been at the EU in Brussels, but is now done in the U.K. Sinha says the deal is particularly significant because it was a major transaction structured as a swap. Others have toyed with the idea, he says, but nothing made it all the way to the end zone. “This one did,” he says. —Brenda Sapino Jeffreys
Diego M. Radzinschi/ALM
Andrew Gerlach & Frank Aquila Sullivan & Cromwell
Steven Rosenblum & Elina Tetelbaum Wachtell, Lipton, Rosen & Katz
hrough regulatory savvy and patience, Sullivan & Cromwell M&A partners Frank Aquila and Andrew Gerlach helped Canadian Pacific Railway acquire Kansas City Southern last year after initially losing the deal to a higher bidder. Pending final approval by the Surface Transportation Board, the $31 billion deal will create the first single-track railroad spanning the United States, Mexico and Canada. It may also be the last of its kind: Decades of railroad consolidation means any future mergers among the country’s seven remaining Class 1 railroads will be deemed increasingly anti-competitive. Kansas City Southern had options when it entered into its initial merger agreement with Canadian Pacific, valued at $275 per share, in March 2021. By then, its stock price had more than doubled from its February 2020 low of $127. The deal followed months of unsolicited bids, initially from a private equity consortium including Blackstone Group and GIP, and then from Canadian Pacific. The next month, fellow Class 1 railroad Canadian National Railway came over the top with an unsolicited bid at $320 per share. It offered more cash and less stock than the bid from Canadian Pacific, which declined to match. However, Aquila and Gerlach knew their client still wanted the deal, so they got to work exploiting the regulatory uncertainties of the Canadian National deal. Kansas City Southern required any acquisition to include a voting trust, which would hold shares of the railway until the STB approved the transaction. Aquila knew the STB was wary of further consolidation—a previous Canadian Pacific attempt to acquire Norfolk Southern Railway fell apart because of regulatory doubts. While Canadian National offered more money, Canadian Pacific offered certainty. Its voting trust had already been approved. None of its routes overlapped with Kansas City Southern, but some Canadian National routes did. Gerlach and Aquila argued those points to regulators and, via a proxy contest, Kansas City Southern’s shareholders. “Canadian Pacific was running what amounted to a lobbying campaign from before we signed with Canadian National to the time when the STB rejected the Canadian National voting trust,” says Wachtell, Lipton, Rosen & Katz corporate partner Steven Rosenblum, who represented Kansas City Southern alongside corporate partner Elina Tetelbaum. As shareholders prepared for a mid-August vote on the Canadian National deal, the STB announced it would soon rule on the voting trust. The target railway postponed the vote and, sensing opportunity, Canadian Pacific upped its bid to $300 per share. When the STB ruled against Canadian National, Canadian Pacific moved to close the deal by putting a time limit on its revised bid. In mid-September, Kansas City Southern terminated its deal with Canadian National and signed with Canadian Pacific. For the Wachtell team, playing a cool, neutral hand as the Canadian railways squared off helped earn their client the best deal possible. “It requires calmness and patience and open mindedness that you try to maintain over a long period of time and not get lost in rooting for one deal over another because that’s the one you have in hand,” Tetelbaum says. “That’s the discipline I’ve certainly taken away from this.” —Dan Roe
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Todd France (wachtell)
Mark Thierfelder Dechert
Elizabeth Cooper & Naveed Anwar Simpson Thacher & Bartlett
s buyout firms have begun returning to the mega-deals of yesteryear, the market for club or consortium deals (choose your nomenclature) has surged back as well. After falling out of favor in the wake of the Great Recession, these group-led buyouts in which multiple private equity firms gather together to take over a company are gaining popularity once again. And no deal defines the growing trend more than the $34 billion buyout of medical supplier Medline. For Simpson Thacher & Bartlett partners Elizabeth Cooper and Naveed Anwar, who represented a consortium composed of Blackstone, Carlyle and Hellman & Friedman, the deal was something of a throwback, but one with an important twist: The Mills family, the company’s founders and owners for over 55 years, wanted to play a part in Medline’s future. “It was like we were doing two deals at once,” Cooper says. “We had to divide and conquer to get everything done.” In one portion of the deal, the attorneys had to navigate the complexities of the biggest leveraged buyout since the financial crisis, and in the other they had to find a structure that would satisfy the founding family. In the end, the Mills family remained the single largest shareholder and its senior management stayed in place. “If you explain this deal: Three major sponsors, a family, tons of co-investors, regulatory approvals in multiple jurisdictions, big financing, and you get it done within six months from sign to close,” Cooper says. “That’s a lot.” Among those co-investors was GIC, a Singaporean sovereign wealth fund, which was represented by Dechert’s Mark Thierfelder. In the quick-moving deal, just 18 days elapsed between the fund getting involved with the consortium and the buyout wrapping. “Any consortium deal’s got some unique aspects to it,” Thierfelder says, “but here with a significant and very influential rollover shareholder in the business, that added a new level.” He describes the pace of the deal and the work ethic from everyone involved as “breathtaking.” It moved so quickly, in fact, that he found himself signing off on it from his daughter’s dorm room, where he was helping her pack up from her freshman year of college. Thierfelder expects more consortium deals to go down in the coming years as private capital continues pouring into the market. As Cooper points out, however, whether those deals can rival the size of this one may depend on the strength of the market and the status of interest rates. “I don’t know that you could get Medline done even this year given the choppiness of the financing markets right now,” she says. —Ben Seal
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Catherine Dargan & Michael Riella Covington & Burling
n an uncertain and evolving antitrust regulatory environment, it took a quick, clean closing for Covington & Burling partners Catherine Dargan and Michael Riella to complete one of the largest biotech deals in 2021. Covington’s client, Merck, agreed to acquire Acceleron Pharma, an American clinical stage biopharmaceutical company, in an $11.5 billion deal. The acquisition gave Merck access to Acceleron’s rare-disease drug candidate sotatercept, which is in a late-stage study to treat pulmonary arterial hypertension, a type of high blood pressure that Merck expects to create a market in the billions later this decade. “The goal is always to make sure that patients are the priority and in doing the acquisition they are able to help bring needed drugs to market,” Dargan says. “I think the choices that were made were fundamental in terms of getting the deal done on time in the terms that were originally negotiated between the parties. It could have had a very different outcome, but I think that the decisions that were made, based on the work that was done, were very effective in getting it through.” In order to complete the deal, Dargan and Riella had to overcome a number of hurdles, including a very intricate set of collaboration agreements for the key products that Acceleron had with Bristol Myers Squibb, various leaks of the deal before closing, and several lawsuits from shareholders opposed to the deal. The effort posed key questions to the attorneys, Riella says, including, “How do we structure the deal to make sure the deal goes through? Also, how do we get it done as quickly as we can, understanding the environment in which we’re operating?” Despite the setbacks, Dargan and Riella were able to move quickly between the time the deal was announced and its closing. Aside from one pull and refile from the Federal Trade Commission and some foreign filings, the entire process took four months. The deal was officially announced Nov. 22. “One of the fun moments of every deal like this is when the tender offer period closes and you’re waiting to see if you’ve made it over the threshold to enable closing,” Dargan says. “We really did feel—like we often do when we’re working with Merck—that we were fighting the good fight.” —Jacob Polacheck
Krishna Veeraraghavan Paul, Weiss, Rifkind, Wharton & Garrison
Kimberly Petillo-Décossard Cahill Gordon & Reindel
n about six months, two dealmakers helped turn some common ground and thousands of sheets of paper into one of the largest contract research companies in the world. Their work, ICON’s $12 billion acquisition of PRA Health Sciences in 2021, showed how much value can be created when industry leaders come together and place their faith in talented negotiators like Kimberly Petillo-Décossard of Cahill Gordon & Reindel and Krishna Veeraraghavan of Paul, Weiss, Rifkind, Wharton & Garrison. For Petillo-Décossard, who has represented the buyer, ICON, since she walked in the door at Cahill in 2005, the deal was the culmination of the company’s “string-of-pearls” growth strategy over multiple decades. “They have been very slowly and methodically and thoughtfully preparing for this for years,” she says. For PRA and Veeraraghavan, a deal was attractive not only because the two companies fit nicely together—PRA’s strength was more U.S.-based while ICON had more to offer from an international perspective, and a combined entity could provide a more comprehensive set of products and services to clients at greater scale—but also because of the outlook in the industry. “Our client had a growing sense that over time there would be really significant consolidation in the industry, and they had this opportunity to combine with ICON, who they viewed as their best partner,” he says. The COVID-19 pandemic wasn’t the sole reason these two research companies found it prudent to combine when they did. But it did underscore the benefits of the merger. Veeraraghavan says it may have shown the value of getting patients enrolled in studies, and having real organizations that could put together trials in a virtual environment. Petillo-Décossard says the pandemic also pushed up demand at ICON. The pandemic forced all communication on the deal to go virtual, and it also factored into some of the protective language PRA sought. Because it believed there would be significant consolidation, it wanted to ensure ICON remained committed to the deal even if it got a superior offer during the process. PRA also wanted to prevent the pandemic from being used as a material adverse event that could void the deal. A third covenant prevented ICON from materially changing its business model prior to getting regulatory approval. Veeraraghavan says the carve-outs for material adverse events were “some of the most, if not the most expansive and favorable for the target company” that he’s seen. There was also the possibility a deal of this size could raise anti-competitive concerns. In spite of those challenges and uncertainties, the parties worked at a lightning pace. The deal went from the exclusivity agreement to announcement stage in just over three weeks. “As lawyers, you are conditioned to tell your client all of the reasons this deal will not close on July 1. And it was a very long list. All of these things have to happen on exactly the right day for this to work,” Petillo-Décossard says. “And it did.” —Andrew Maloney
Valerie Ford Jacob Freshfields Bruckhaus Deringer
hen billionaire British entrepreneur Alex Ches-terman wanted a lawyer to shepherd the largest-ever U.S. listing of a U.K-headquartered company, there was no one else with the expertise, innovation and team leadership of Freshfields Bruckhaus Deringer’s Valerie Ford Jacob. Chesterman already had two online business successes under his belt—the 2018 sale of British real estate portal Zoopla to private equity group Silver Lake for £2 billion, and the 2011 sale of DVD-by-post service LoveFilm to Amazon for £200 million. After building Cazoo, the most popular online car dealer in Britain, Chesterman aimed at listing his latest creation for $7 billion on the New York Stock Exchange. Jacob put together a deal with blank-check acquisition vehicle AJAX I—the special purpose acquisition company of Dan Och, founder of hedge fund Och-Ziff. The deal called for a business combination between Cazoo and AJAX I, as well as an $800 million private investment in public equity. The de-SPAC of a British company was a complex undertaking in and of itself, requiring deft navigation of U.S. and U.K. securities laws and tax and structural considerations on both sides of the Atlantic. But adding to the complexity was the fact that this was a direct purchase from the shareholders. On one side stood more than 70 loyal shareholders who had followed Chersterman into Cazoo—some would want to cash out while others would want to remain invested. On the other side were Och’s own investors and their intentions for the deal. “When you have that many shareholders, complexity just is a natural consequence,” Jacob says. To satisfy both Chesterman’s original backers and Och’s new investors, Jacob created a charter and merger agreement featuring shareholders’ consents, transfer provisions and something for everyone. Existing shareholders could mix and match how they received consideration in the deal—keep their equity, take their cash, a bit of both, or invest further. Drag-along rights protected the majority shareholder interests, and a lock-up—restricting everyone from selling for six months—protected the company’s value and minimized volatility. The whole deal structure exemplified Jacob’s extensive experience in capital markets, M&A and corporate matters, as well as her creativity and innovation—all executed in a short timeframe to satisfy all parties, including British and American regulators. “Ultimately, it was a very cooperative transaction on all sides,” Jacob says. “People were very enthusiastic—certainly on the different management teams. And the lawyers executed well together to get the result.” —Bruce Love
Raaj Narayan Wachtell, Lipton, Rosen & Katz
achtell, Lipton, Rosen & Katz partner Raaj Narayan had worked with next-generation financial services company Social Finance since 2016, advising it on capital raises and a large financing round in 2019. The company had started out by giving personal student loans, but by 2021 had diversified into a one-stop shop for consumer finance. In order to keep growing, it needed more money—and it needed to get a bank charter. Over the course of its growth as a private entity, Social Finance had developed a very complicated and unique capital structure, which fueled its growth but also created impediments to taking it public and obtaining the bank charter it needed to lower rates. “The company was evaluating strategies for its next stage of growth, and part of that was taking seriously the SPAC option,” Narayan says. “A lot of companies take serial preferred stock and it all looks the same. Finding a capital structure that worked for everyone in this case was a bit more challenging.” Narayan says part of that challenge was the sophistication of the stakeholders, which included Silver Lake Partners, Softbank and Qatar Investment Authority. Narayan and his team acted as a negotiation hub, leading multi-party negotiations involving at least five counterparties at any time. They also needed to create a capital structure that could thrive in public markets and provide different merger considerations for the several classes of capital stock through five different exchange ratios. “It wasn’t plain vanilla,” Narayan says. “It is more interesting to work with sophisticated lenders. People have stronger viewpoints when they are used to negotiating every element of this.” The deal came together at the height of the SPAC boom (which had its own difficulties given a SPAC is a hybrid mix of a merger and a going-public transaction) and ultimately gave Social Finance, now SoFi Technologies, what it needed while also keeping the various investors happy. Shortly after the transaction, Narayan’s team was able to acquire a small community bank called Golden Pacific in order to gain the bank charter. The company’s shares soared when it cleared the final regulatory hurdle in January. Narayan says he and his team have been asked by Social Capital, the SPAC in the deal, to do its next round of de-SPACs as well. “It’s satisfying when the other side in a deal respects your work and hires your firm for their subsequent transactions,” he says. —Patrick Smith
Jim Pinckney
