Milbank Closes Complex Cross Border Transaction in $650 Million
Private Equity Deal
One Equity Partners And DC Chemical Co., Ltd. Purchase Columbian
Chemicals Unit Of Phelps Dodge
NEW YORK, NY, March 30, 2006 – Completing a strategic acquisition in the chemical industry, One Equity Partners LLC, a private equity affiliate of JPMorgan Chase & Co., and South Korea-based DC Chemical Co., Ltd. have closed on their joint purchase of Columbian Chemicals Company (“CCC”) from Phelps Dodge Corporation. The international law firm Milbank, Tweed, Hadley & McCloy LLP, led by New York-based partners Charles J. Conroy and John Franchini, represented One Equity Partners (“OEP”) and DC Chemical Co. (“DCC”) in negotiating, structuring and closing the leveraged transaction.
The transaction involved a series of complex foreign subsidiary share purchases by certain acquisition vehicles jointly owned by OEP and DCC and a subsequent merger of the non-foreign entities. Under the terms of the agreement, OEP and DCC purchased Columbian Chemicals in its entirety. Total consideration received by Phelps Dodge (excluding post-closing adjustments) equaled $543 million plus approximately $100 million of CCC’s foreign-held cash.
Mr. Conroy noted, “With more than $33 billion of chemical industry M&A deals having been reported for 2005 and private equity firms continuing their push into this sector, global expansion and consolidation have evolved as significant industry trends. In these types of complex cross-border transactions it is essential to combine global M&A, private equity and international tax expertise to effectively negotiate and structure the deals from both an economic and operational standpoint. This deal was challenging because it was one of the first instances in which a U.S.-based private equity firm joined forces with a South Korean chemicals company to purchase a U.S.-based chemicals company with international operations. We developed a series of transactions in order to minimize the tax implications and foreign currency fluctuations for all of the parties involved.”
In addition to Messrs. Conroy and Franchini, the Milbank team representing OEP and DCC included partner Dale Ponikvar (Tax), Of Counsel Scott Price (Employee Benefits), and associates Russell Kestenbaum, Laurie Duke and Henry Bodenheimer, all in New York.
About Milbank:
Milbank’s Global Corporate Group is renowned for its leadership in sophisticated cross-border transactions and combines both the transactional and regulatory expertise necessary to successfully negotiate and close mergers & acquisitions and other transactions across a wide range of industries. Milbank is particularly strong in the private equity arena, representing private equity sponsors, hedge funds and their portfolio companies in investment, acquisition, restructuring, disposition and fund-of-fund transactions. The Group’s lawyers have extensive experience in representing public and private companies in connection with mergers, acquisitions, divestitures and other corporate transactions, including stock-for-stock mergers, tender offers, private stock and asset purchases, complex joint ventures, private placements of equity securities and restructurings.
Milbank, Tweed, Hadley & McCloy LLP is a premier global law firm headquartered in New York, with offices in Los Angeles, Washington, D.C., London, Frankfurt, Munich, Tokyo, Hong Kong and Singapore. Milbank is a recognized leader in capital markets, corporate finance, project finance, acquisition finance, and other major fields of legal practice. The Firm's practice includes cross-border mergers and acquisitions and global securities transactions as well as assisting multinational clients with their cross border investments. Milbank provides a full range of services to many of the world’s leading financial, industrial and commercial enterprises, as well as governments, institutions and individuals.