Burger King Holdings Inc. and 3G Capital Management LLC had a problem: They both wanted to get a deal done in the fall of 2010, but could not agree on a structure. Kirkland & Ellis LLP partner William B. Sorabella helped lead a team with an innovative solution that cinched the $4 billion deal and earned him a spot on Law360's list of M&A MVPs.
The private equity group had identified the Burger King fast food chain's parent company as a potential acquisition target as early as 2010, Sorabella said. The two parties had engaged in initial discussions in the spring of that year, but nothing came of them.
Later in the year, however, 3G and Burger King got serious, but they encountered a problem. Burger King wanted to do a deal via tender offer, which would get money to shareholders more quickly than a merger done by shareholder vote, Sorabella said.
"They vote with their wallets by saying 'I would like to be acquired,'" he said.
3G and its lenders, on the other hand, did not want to do a deal where they risked not getting all of Burger King's outstanding shares. The private equity firm preferred going the statutory merger route, which required only a majority vote of shareholders, Sorabella said.
Rather than concede that the deal was not meant to be, Sorabella and his team of Kirkland attorneys devised a two-pronged merger strategy that satisfied both sides, and has since become known as the Burger King structure.
"It was the most efficient way of getting the transaction done quickly," Sorabella said. "It was good for 3G. It was good for Burger King. And it was good for the lenders."
Burger King and 3G agreed to a tender offer employing "top-up" shares, which gave 3G the option option to purchase, upon successful completion of a short-form merger, a number of newly issued shares of Burger King necessary to take total control of the company, Sorabella said.
At the same time, Burger King and 3G entered into a long-form merger agreement that would go into effect as a backup.
That back up was never needed, Sorabella said.
After the deal was announced in September 2010, shareholders voted for the deal in overwhelming numbers by participating in the tender offer, and the deal was closed in October 2010 after only 47 days, Sorabella said.
Since Sorabella and his team devised the Burger King structure just over a year ago, it has been used on several major deals, including by Golden Gate Capital in its deal for California Pizza Kitchen.
The thrill of coming up with a new deal structure and the fluidity of negotiations are what attracted Sorabella, 37, to corporate M&A work when he completed his studies at the Georgetown University Law Center in 2000.
"I liked the excitement of trying to get a deal done," he said. "It stuck. I've been doing it ever since."
Sorabella joined Kirkland's New York office in 2003 after spending about three years at Fried Frank Harris Shriver & Jacobson LLP working with partner Stephen Fraidin.
Sorabella followed Fraidin to Kirkland, and was named partner at the firm in 2006.
His M&A practice has grown steadily ever since.
Even as new business has come in, however, clients have remained loyal to Sorabella and kept coming back when a new deal needs to be done.
Sorabella has worked with Constellation Energy Group Inc. since 2005, including serving as its legal counsel in Exelon Corp.'s $7.9 billion purchase of the power generating company in April.
He also represented Solutia Inc. in 2005 when the specialty chemical company filed for bankruptcy protection. Sorabella helped the company with a series of divestitures and acquisitions as it has reshaped its business, including in its $113 million purchase of Southwall Technologies Inc. in October.
Paul J. Berra III, Solutia's vice president and general counsel, said that he got to know Sorabella well when Solutia sold off its nylon division for around $2 billion in 2009.
Since then, the two have worked on several transactions.
"Bill takes a very practical approach to the practice of law and the M&A practice," Berra said. "He's very zealous in his representation of his clients, but he also works to reach business solutions that are of a service to his clients."
Sorabella said he sees his practice maintaining a high pace, no matter the economic conditions.
"The deal market will obviously continue and I believe it will be robust," he said.
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