King & Spalding lawyers represented an affiliate of client Roark Capital Group in its acquisition of Wingstop Restaurants Inc., a chain of chicken-wing eateries whose marketing materials say the company has sold more than 2 billion wings since its founding in 1994.

Roark, an Atlanta-based private equity firm that specializes in franchising, formed Wing Stop Holding Corp. to acquire the Richardson, Texas-based chain, which has 650 restaurants open or in development and posted more than $300 million in revenue in 2009. Terms of the deal were not disclosed.

A team of lawyers from several King & Spalding offices worked on the deal. The primary Atlanta partners were Raymond E. Baltz and William G. Roche on corporate matters, Les A. Oakes on environmental issues and Donald S. Kohla on tax matters.

Wingstop was represented by Countryman Law in Southborough, Mass. The acquirer's financial adviser was Cowen & Co.

Roark, which focuses on middle-market investments in companies that have revenues ranging from $20 million to $1 billion, also holds other restaurant brands in its portfolio, including Carvel, Cinnabon and Moe's Southwest Grill.

Earlier this year, King & Spalding represented Roark when it acquired a majority ownership interest in Marietta-based Peachtree Business Products.

In a market largely bereft of real estate deals, federal stimulus programs and funds are creating work for dirt lawyers—and tax and bond counsel, too.

Althea J.K. Broughton at Arnall Golden Gregory is one of those lawyers. Her team recently closed two multifamily affordable housing transactions, one in the City of Decatur, the other in Union City. Both deals involved a complex mix of funding sources and took more than a year to complete.

The $5.8 million Decatur project, called Allen Wilson Phase I, will be located in downtown Decatur at Robin Street, Electric Avenue and Commerce Drive. Broughton, along with Arnall lawyers Alison M. Drummond, James T. Rauschenberger and A. Rian Perry, represented the Decatur Housing Authority and two affiliates to negotiate financing for the city’s first mixed-finance transaction of this type. The housing authority’s general counsel, Alan E. Rauber of McCurdy & Candler, also was involved.

“I think this deal is somewhat unusual,” Broughton said. “Typically, first of all, there are not very many bond deals that are closing in this environment, so when I say unusual, I mean that. Also, this was not your typical bond deal with an issuer and an indenture and a trustee. This was a little bit different in that you had the housing authority issuing notes that were purchased by Fannie Mae as part of a tax-exempt execution.”

Broughton said she helped her client get various approvals from the Department of Housing and Urban Development, which requires them in mixed-finance transactions. She said the tax-exempt bonds required HUD approval because the Decatur Housing Authority was essentially borrowing against a future stream of funds from HUD, then using those rights as collateral on a tax-exempt loan from Fannie Mae. The lawyers also got HUD approval for the receipt of stimulus funds under the American Recovery and Reinvestment Act, or ARRA.

Caryl Greenberg Smith of Hunton & Williams, who served as bond counsel on both the Decatur and Union City deals, said that Fannie Mae is trying to promote affordable housing by purchasing notes directly rather than having the housing authority market the notes publicly. Such deals, she said, can offer a “huge, huge reduction in the interest rate compared to what you would have gotten in the market.”

The bond aspect of the Decatur deal also yielded 4 percent housing tax credits from the Georgia Department of Community Affairs, Broughton said, which were then sold to equity investor Peachtree Investment Solutions, LLC, represented by Aaron J. Kowan at Taylor English.

Kowan said his client invested about $2 million, but that the deal’s sophistication and complexity was on par with $30 million projects. “For the size of the deal, it was probably the most complicated deal I ever worked on. I wish I’d known that before I took the deal,” he said, and laughed. “I was working on a flat fee.”

Kowan, a tax lawyer who worked on the transaction with associate Brandon C. Hardy, said the deal was complex because it involved three to four levels of debt, each with unusual business and tax issues related to the public-private partnership, and unusual guaranty provisions related to HUD backing.

In the Union City deal, Broughton’s team represented Ambling Development Partners, which plans to build a 150-unit elderly housing complex known as Woodbridge at Parkway Village at the intersection of Southwood Road and Thompson Road.

Broughton said this deal, worth $16 million, included ARRA stimulus funds through HUD and bonds which were credit-enhanced by the Federal Housing Administration to make them more marketable. The bonds, which are tax-exempt and yield a 4 percent tax credit, were purchased by equity investor Community Affordable Housing Corporation, represented by Robert G. Coberly from Bryan Cave’s Washington office.

Broughton said stimulus funding was crucial to both deals, and is providing a boost to real estate work in general. “I really think the stimulus funds have actually helped save some deals or made some deals viable and have gotten them to closing,” she said. “Initially we all had to figure out how those funds would work, but I think they’ve promoted a lot of development activity.”

Represented by King & Spalding, Roark Capital Group, an Atlanta-based private equity firm, joined forces with another private equity shop, Philadelphia's Entrepreneur Partners, to acquire Marietta-based Peachtree Business Products.

Peachtree, represented by lawyers from Sutherland, is a direct marketer of specialty business products and marketing materials for residential property managers, parking facilities and other end markets. It will be combined with one of Entrepreneur's portfolio companies, AmeriFile, a St. Louis-based direct marketer of specialty business products to physicians, dentists and other health care practitioners. The combined company will be based in Marietta.

Roark specializes in business and consumer service companies with revenue between $20 million and $1 billion. Blank Rome represented Entrepreneur, which focuses on direct marketing companies with revenue between $15 million and $250 million.

GE Capital Corp. and Golub Capital have co-arranged a credit facility to support the acquisition.

If you’ve ever bought a copy of The New York Times, a doughnut and a read-it-in-an-hour paperback from airport concessionaires, chances are that you were buying from The Paradies Shops Inc., a 50-year-old Atlanta-based business.

Now, with the help of its lawyers at Paul, Hastings, Janofsky & Walker and Nelson Mullins Riley & Scarborough, Paradies—which has more than 500 stores in airports and hotels in the U.S. and Canada—has entered into an agreement to receive a significant investment and form a new partnership with private equity firm Freeman Spogli & Co.

Terms of the deal were not disclosed, but Paul Hastings partner Walter E. Jospin said his client’s ability "to obtain an investment from one of the leading private equity shops in the country reflects that the private equity business is vibrant, but they’re looking for quality.”

Karen K. Leach, a partner at Nelson Mullins, said Paradies was attracted by Freeman Spogli’s history of working with family-owned businesses.

Jospin, who has represented Paradies since 1997, and Leach, who spent almost a decade representing the company with Jospin, reunited to handle this deal. Leach left Paul Hastings in April, and said she’d handled some restructuring work in past years for Paradies—which she said had more than 50 legal entities and a complex organizational structure—in preparation for the right opportunity. 

Paul Hasting’s Philip J. Marzetti handled tax matters, and Nelson Mullins lawyers from several offices also were in on the deal, including partner William R. Gaines Jr. on lending matters and associates Bradley M. Burman and Steve B. Park, all in Atlanta. Leach said that Genesis Capital served as the investment bank for the transaction.

Freeman Spogli’s lawyers were from Bingham McCutchen’s New York, Los Angeles and Orange County, Calif., offices.

New private equity funds—especially ones which actually invest—are a bit of a rare breed these days. But DLA Piper partner Gerry Williams managed to land one as a client and help it make its first investment recently.

Williams’ client, the Bethesda, Md.-based RLJ Equity Partners, is a portfolio company of The RLJ Companies, founded by Robert L. Johnson, the owner of the Charlotte Bobcats. Its new fund closed in June with $230 million of committed capital.

Its first investment was the purchase of what Williams calls “a significant minority ownership stake” in LAI International from Minneapolis-based private equity firm Spell Capital.

LAI, which is based in Scottsdale, Ariz., and has outposts around the country, uses state-of-the-art lasers and water jet processing to manufacture precision-engineered components for a variety of industries, including healthcare, power generation, aerospace and defense. LAI has annual revenues of about $55 million, according to Spell Capital’s portfolio description.

The financial terms of the deal were not disclosed.

Williams said RLJ became his client when Rufus H. Rivers, whom he met through a mutual friend about seven years ago, became RLJ’s managing director.

The legal aspects of the deal took about 90 days to put together, and Williams said his team of lawyers handled all the mergers and acquisitions work, as well as issues related to real estate, environmental, intellectual property, employee benefits and tax matters.

“I think the unique aspect is, that given the current environment in the debt markets, the deal was done keeping the senior debt lenders in place,” he said. “It became a partnership between the then-existing private equity fund [Spell Capital] that owned the business and RLJ Equity Partners.”

Spell Capital was represented by Fredrikson & Byron in Minneapolis. The investment bank for LAI was Lincoln International.

Bill Rowland and a team of Jones Day lawyers just put the finishing touches on what's become an almost-unheard-of transaction these days: a private equity deal.

Rowland represented TorQuest Partners, a Canadian private equity fund manager, in its agreement to purchase a Brunswick, Ga.,-based refined wood rosin and natural wood terpenes business from a subsidiary of Ashland Inc. for about $75 million.

“The exciting thing for us is to see some activity in the market,” said Rowland. “It's a private equity buyer, and there's acquisition financing. Those are good signals for a return to health in the market. … Private equity in general has been very quiet.”

This transaction, which is expected to close in about 60 days, involves $60 million in cash and a $15 million note from the buyer, payable over time, which Rowland said essentially functions as seller financing and will serve as security for any post-closing claims, and will help bridge any valuation gap.

That valuation gap—not uncommon in today's market, where businesses sell for less than their actual or perceived value—comes into play here because the wood rosin business, owned by Covington, Ky.-based Ashland's subsidiary, Hercules Inc., generated revenues of about $85 million in fiscal year 2009.

The business, which will be called Pinova once the transaction closes, is touted as the world's only supplier of wood rosin, which is used in a variety of applications in the adhesives, construction, beverage, personal care and agriculture markets.

Rowland said that Ashland acquired the wood rosin business when it purchased Hercules about a year ago. “Ashland was looking to dispose of nonstrategic business lines that they inherited when they bought Hercules,” he said. “Hercules had previously disposed of other parts of its rosins business, and coincidentally we were involved in that [sale representing] Eastman Chemical.”

Jones Day lawyers handled a variety of issues for TorQuest, including antitrust advice, employment, corporate, tax and transactional work. A big part of the deal, he said, involved representation by the firm's environmental team.

“The kindest way to put it is, it's a very messy site; it's an old chemical site with a wide range of issues,” Rowland said. TorQuest, he said, particularly as a financial buyer looking to build the business and then sell it in a few years, was concerned with understanding and resolving environmental issues.

The other challenges of the deal, he said, were the typical ones that arise when a business and assets are carved out of an entity that is not a free-standing corporation.

TorQuest also was represented in the deal by Canadian law firm Stikeman Elliott. Ashland was represented by its in-house counsel. Other Jones Day lawyers who worked on the deal included TorQuest's longtime environmental counsel, Charles Perry, as well as partners Scott Specht, Mike Lee, Doug Gosden and Tim Bratcher; of counsel Chris Morgan, Elaine Rogers Walsh and Arthur Kent; and associates Casey Fernung and Sarah Watts.

One of the largest U.S.-based textile manufacturers recently relied on a Greenville, S.C. law firm for advice on acquiring a private equity fund’s portfolio company.

Milliken & Co. was advised by a legal team from Wyche, Burgess, Freeman & Parham on its acquisition of carpet maker Constantine LLC. Heading up the Wyche team was partner Kevin Hendricks, a former associate in Jones Day’s Atlanta office. The deal closed on Tuesday and terms weren’t disclosed.

Milliken, a privately held company that’s headquartered in Spartanburg, S.C., manufactures modular carpet, apparel, fabrics and chemicals. Constantine is based in Calhoun, Ga., and is owned by the Boston private equity fund Lineage Capital LLC. Constantine makes broadloom and modular carpet tile, as well as other types of floor-covering products.

Working with Hendricks on the Milliken deal were Wyche partner Cary Hall and associates John Harvey, Maurie Lawrence and Rita Barker, all located in Greenville. Ropes & Gray advised Lineage Capital.

Wyche, a 38-lawyer firm, has weathered the economic downturn well because there were few examples of companies and lenders in the Greenville area that became overextended leading up to the recession, Hendricks said.

“Greenville never went crazy in the last few years in terms of growth and massive deal flow,” Hendricks said.

With an even split between litigation and transactional work, Wyche is able to handle clients’ needs on most deals, in spite of its size, Hendricks said. Occasionally Wyche will partner with a Washington firm when a client needs specific regulatory advice.

The Wyche firm is known for its work in some specific areas. Founding partner Tommy Wyche has authored several books about the South Carolina mountains, and he helped lead the redevelopment of downtown Greenville, including the creation of a park centered on the Reedy River waterfalls. Wyche’s office is situated on a parcel overlooking the falls. The Wyche firm has also carved out a niche, led by partner Wallace Lightsey, as a specialist in representing architectural firms in copyright infringement litigation.

Hard on the heels of handling more than $1 billion in financing transactions for Delta Air Lines earlier this month, Kilpatrick Stockton partner Benjamin W. Barkley found himself wondering—in these deal-starved times—what he’d be doing next.

But before he even had time to catch up on his sleep, he was representing longtime client Five Star Food Service in its recapitalization by Navigation Capital Partners. Chattanooga-based Five Star, which provides vending, coffee and food services, has long been a portfolio company for Atlanta-based private equity firm Navigation.

Though financial terms of the deal were not disclosed, Barkley, who worked on the transaction with partner Todd C. Meyers, said, “It was a refinancing, a paying off debt and additional investments. Like everybody else.”

The deal increases Navigation’s majority ownership stake in Five Star, and also makes Five Star a franchisee of Canteen Vending Services, an operating company of Charlotte-based Compass Group North America, according to information from the companies.

Attorneys from Reed Smith represented Navigation in the deal.

A group of triathletes and a merchant bank staffed by athletes went on a run for their money recently, when, with the help of some Seyfarth Shaw lawyers, they purchased a company which makes devices designed to speed the recovery of sports injuries.

Seyfarth partner Louann Bronstein, along with partner Jay Myers, both in Atlanta, and Boston partner Brian Michaelis represented Ponte Vedra Beach, Fla.-based acquirer Recover Gear Acquisition in its purchase of Recover-Gear LLC, a private company based in the Jacksonville, Fla., area.

The acquirer, Bronstein said, is a company formed by merchant bank Harbor View Advisors, also of Ponte Vedra Beach, and a group of athlete-investors called Ironmen LLC solely for this purchase. Collectively, according to information from Bronstein, Ironmen and Harbor View’s principals have competed in more than 25 ironman competitions.  

“These investors … use the products in their training,” Bronstein explained. The primary product Recover-Gear makes, she continued, is “a compression garment with a pocket for holding an ice pack or a heat pack, and they can be worn … after a race or if you’re a baseball player, for example, after a game. They’re also designed to be worn during a … training run.”

The products include an array of stretchy sleeve-type devices that can slide over an elbow or knee, or garments that look like tight-fitting bike shorts or shirts, each with pockets for ice or heat packs. The products are used by athletes and physical therapists, Bronstein said, adding that Recover-Gear has applied for a patent.

The company was founded by Steve Petitt, a former right-hand pitcher for the St. Louis Cardinals and a seven-time Hawaii Ironman triathlete. Petitt came up with the idea, according to the company’s Web site, while sitting in an ice bath after a hard run thinking that there had to be a better way to engineer his recovery.

Seyfarth, Bronstein said, got the work as the result of its relationship with Jim Philip, an athlete who is a Harbor View partner. The firm represented Philip’s former company, human resources software marketer and developer Vurv Technology, where he was president, in its merger with public HR company Taleo Corp. in 2008.

Recover-Gear was represented by Mark Young, a patent attorney in Jacksonville.

Terms of the deal were not disclosed.

Lawyers from Greenberg Traurig’s Atlanta office have kept busy on the deals front this summer.

Earlier this month, partners David I. Schulman and Stephanie D. Ratcliffe, along with David J. Gellen from the firm’s Palm Beach County, Fla., office represented Servigistics when it was acquired by Marlin Equity Partners. Los Angeles-based Marlin immediately merged its new acquisition with the service networks solution division of another recent purchase, Click Commerce, to form a single company.

That company, now operating under the Servigistics name, is based in Atlanta and focuses on software that helps companies manage and monitor their post-sale service business processes, including service parts, field technician scheduling, routing and pricing management, as well as management of returns, repairs and warranty decisions.

Financial terms of the deal were not disclosed.

In a separate deal, Greenberg Traurig partners Daniel B. Brown and Gerald L. “Jerry” Baxter represented Carmel, Ind.-based Dormir LLC, a company whose subsidiaries offer patient care to those suffering from sleep disorders, in its successful bid to raise $8 million in growth capital from investors CHL Medical Partners and Noro-Moseley Partners.

CHL, based in Stamford, Conn., and Noro-Moseley, based in Atlanta, were represented by attorneys from Morrison & Foerster’s Palo Alto, Calif., office.