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Firms busy with mergers, acquisitions
Premium content from Portland Business Journal - by Andy Giegerich
Date: Friday, February 11, 2011, 3:00am PST
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After a dormant two years, Portland law firms are again bustling with renewed merger and
acquisition work.
Among Portland’s eight largest firms that advise companies on mergers and acquisitions,
six report that business is up significantly - in some cases, triple what it was a year ago.
M&A activity can be extremely profitable for law firms. Deals involving mergers between
$50 million and $125 million can earn firms paydays of $150,000 and more.
Firms with revived transaction practices include:
K&L Gates LLP, which hosts an 18-attorney Portland office, closed five deals during the
last six months. During 2010’s first half, it didn’t close any. The firm is expected to close
Vigor Industries’ $130 million purchase of Todd Shipyards Corp. by Feb. 16.
Ater Wynne LLP, whose transactional attorneys are working on 60 percent more pending
deals this month than the firm’s 36-attorney office handled last January.
Miller Nash. LLP, which closed four transactions in 2010’s second half after finalizing just
two deals between January and June. At least three clients this year have enough cash to
seek "one or more deals," said Mary Ann Frantz, a Miller Nash partner.
ScbwbWilliamson & Wyatt PC has 30 merger and acquisition deals brewing, compared
to 15 last year.
Perkins Coie is managing between two and three times the number of deals it handled
last January. The transaction side picked up dramatically during 2010’s second half, said
Perkins attorney Roy Tucker.
Perkins handled Portland-based Leatherman Tool Group’s October purchase of Zweibrder
Optoelectronics GmbH & Co. KB, a $100 million German flashlight maker.
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Nationally, the dollar volume spent by acquiring companies rose from $42 billion to $115
billion in January 2011, a 72 percent increase when compared to January 2010, according
to New York-based merger researcher Dealogic. Global mergers and acquisitions have
totaled more than $300 billion since Jan. 1, up 69 percent since 2009, according to
Thomson Reuters.
"Timing-wise, local and regional (transactional) activity often trails ’big deal’ national and
global activity, but it does tend to follow it," said Jeffrey Cronn, co-chair of Tonkon Torp’s
mergers and acquisitions practice group. "The recent increase ... may be another sign that
local and regional activity will continue to pick up."
The increase would reverse recession-era trends. The number of Oregon companies and
nonprofits either participating in or formed by mergers dropped by 7.5 percent between
2008 and 2010, according to Oregon’s Corporations Division.
Deals are significant
Along with the Leatherman/Zweibrder and Vigor/Todd deals, YoCream_Internt1pa! was
sold to the French company Danone for $103 million. Ater Wynne represented YoCream.
Tonkon Torp handled eBay’s purchase of Portland-based Critical Path Software, which
closed Dec. 15. Terms of the Leatherman and Critical Path deals weren’t disclosed.
Companies are making more deals as they loosen their hold on cash that many have
hoarded since the recession began in August 2008. The state’s 10 largest public companies
collectively held $6.3 billion in cash and short-term investments during 2010’s third quarter,
far more than in previous years.
More middle-market companies are also looking for deals, said Jeff Wolfstone, a Lane
Powell PC shareholder. The search has become easier because target valuations continue
to drop.
Another factor: Private equity firms that accumulated pre-recession investments have until
2012 to spend that money. Firms typically must invest such funds within five years.
"They hadn’t necessarily found the investments they’ve wanted for the last few years," said
Brendan McDonnell, a partner in K&L Gates’ Portland office.
Whereas acquirers in 2009 and 2010 were frequently hostile to their targets, today’s
pending agreements are more likely initiated by willing partners.
"We’re seeing parties working to put deals together in their best interests," said Doug
Morris, an Ater Wynne partner. "Before, when one party was at the mercy of another, it
wasn’t necessarily good news for both parties involved."
Fast facts
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Transactional attorneys typically formulate deal structures, overseeing paperwork related to
regulatory and tax issues. They also perform due diligence, which involves investigating
potential deal partners and advising clients when they need to add safeguards to
agreements.
[email protected] 1503-219-3419
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