Big Deals

Biomet, Inc., turned to the private equity crowd after talks with a rival medical devices company, London-based Smith & Nephew plc, fell through.

Biomet announced December 18 that it had agreed to sell for $10.9 billion to The Blackstone Group L.P.; GS Capital Partners, L.P.; Kohlberg Kravis Roberts & Co.; and Texas Pacific Group. At $44 per Biomet share, the deal came at a 27 percent premium to Biomet's closing price on April 3, the last trading day before news of a potential sale of the company broke.

Smith & Nephew announced November 2 that it was in talks with Biomet about a deal that would have combined the world's fourth- and fifth-largest producers of joint replacements (primarily for knees, hips, and shoulders).

Biomet also makes a variety of other products, including bone cements and various bone implants. But with a market capitalization of about $10 billion, Smith & Nephew would have had to pay with stock, a less attractive currency than the cash that the PE consortium offered.

The parties hope to close the deal by October 31 pending shareholder and regulatory approval.

For acquisition group led by Texas Pacific Group (Fort Worth) The group also includes The Blackstone Group L.P., GS Capital Partners, L.P., and Kohlberg Kravis Roberts & Co., which are all based in New York.

Cleary Gottlieb Steen & Hamilton: M&A: Robert Davis and associates Brandon Gardner and Michael Mooney. Financing: Sang Jin Han, Margaret 'Meme' Stowers, and associates Victor Chiu and David Suh. Intraconsortium issues: Michael Gerstenzang, senior attorney Lisa Lenas, and associate Miree Kim. Employee benefits and executive compensation: David Becker, Robin Bergen, Robert Raymond, counsel Kathleen Emberger, and associate Amy Gilday. Tax: Jason Factor and associate Reed Carey. Antitrust: Michael Lazerwitz and associate Jeremy Calsyn. E.U. competition: James 'Jay' Modrall. (All are in New York except for Becker, Bergen, Lazerwitz, and Calsyn, who are in Washington, D.C.; and Modrall, who is in Brussels.) Cleary, which is TPG's regular outside counsel, is representing the entire consortium.

Epstein Becker & Green: Health care regulatory: David Matyas. (He is in Washington, D.C.) Epstein, which is representing the entire consortium, has worked with private equity firms in the past, including on the buyout of HCA Inc. by KKR; Bain Capital, LLC; and Merrill Lynch Global Private Equity [Big Deals, October 2006].

O'Melveny & Myers: Intellectual property: John Kappos and associates Michael Myers and Alison Taub. (All are in Newport Beach, California.) O'Melveny represents a venture capital group specializing in medical device companies that recommended the firm to Warburg Pincus LLC, a New York private equity shop that was part of the TPGled consortium but dropped out. Despite Warburg's departure, O'Melveny continued to represent the entire consortium on IP issues.

Fried, Frank, Harris, Shriver & Jacobson: Corporate: Karl Groskaufmanis, Robert Schwenkel, and associates Abigail Bomba and David Perez. Tax: Jack Jacobson. (All are in New York except for Groskaufmanis and Perez, who are in Washington, D.C.) Fried, Frank is only representing GS Capital Partners, a regular client.

Latham & Watkins: M&A: Luke Bergstrom and Peter Kerman. Finance: I. Scott Gottdiener and Joshua Tinkelman. (Bergstrom and Kerman are in Menlo Park, California; Gottdiener and Tinkelman are in New York.) Latham is only representing KKR. Last year Latham represented KKR in its joint acquisition of VNU NV along with several other private equity firms [Big Deals, August 2006].

For target Biomet, Inc. (Warsaw, Indiana)

In-house: Acting general counsel Bradley Tandy. Previous GC Daniel Hann became Biomet's CEO in March 2006, a week before the company announced that it was exploring its options.

Kirkland & Ellis: Corporate: Robert Hayward, Richard Porter, and associates Brian Axelrad, Theodore Peto, and Jesse Sheley. (All are in Chicago.) Porter and Hayward have represented Biomet on prior acquisitions, including the company's 2004 acquisition of spinal device specialist Interpore International Inc. for $280 million.

Hogan & Hartson: Food and Drug Administration issues: Jonathan Kahan, John Smith, and associate Michael Heyl. Corporate and securities: Peter Romeo. (All are in Washington, D.C.) Hogan has been Biomet's primary outside FDA counsel for more than a decade.

Sommer Barnard: Indiana counsel: James Strain. (He is in Indianapolis.) Biomet is incorporated in Indiana.

For Special Committee of Biomet independent directors Simpson Thacher & Bartlett: M&A: Richard Beattie, Caroline Gottschalk, Gary Horowitz, and associate Keri Richardson. Executive compensation and employee benefits: Gregory Grogan. Tax: Robert Holo. Antitrust: Kevin Arquit. Litigation: Michael Chepiga and associate Zachary Feingold. Bank finance: Marissa Wesely and associate Ashkan Tehrani. Capital markets: Richard Fenyes. (All are in New York.) Biomet's bankers at Morgan Stanley recommended Simpson to the special committee.

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