© 2014 The Texas Lawbook.
By Natalie Posgate – (November 4) – A group of Baker Botts lawyers primarily from Dallas helped Kimberly-Clark close its previously announced spin-off of its health care business, Halyard Health, Inc.
Irving-based Kimberly-Clark’s spin-off is one of the first to close with new Internal Revenue Service rules that permit companies to turn exclusively to their own tax advisors to approve their spin-offs.
Before August 2013, the IRS issued private letter rulings to companies, which essentially provided the tax advice companies needed to receive the green light for a spin-off transaction.
Corporate partner Don McDermett, who led the deal for Baker Botts, said he anticipates the IRS’s recent private letter ruling to greatly affect the number of tax-free spin-offs that corporations and the transactional legal community will see.
“We believe that tax-free spin-offs are going to continue to explode as tax efficient vehicles to unlock value and bring greater management focus on discreet business lines.”
Also assisting McDermett on the corporate team were partners Samantha Crispin, Chad Burkhardt and Luke Weedon and associates Jon Platt, Steve Mann, Kevin Henderson, Kevin Douglas, Cole Davis, Jon Finelli and Ariella Fuchs.
Partner Steve Marcus and associate Aaron Pinegar handled the tax aspect of the tax-free spin-off. More Dallas attorneys who were on the deal team included employee benefits partner David Schiller, trademarks partner Paul Reilly and associates Krisa Benskin, Elizabeth Stanley, Jenny Lazo, Julie Albert, Cecily Porterfield and Jill Errera. Attorneys from the firm’s Brussels and Washington, D.C. offices handled the antitrust matters of the spin-off.
McDermett said that Kimberly-Clark’s “exceptionally strong and talented” in-house lawyers “were critical to the success of this transaction.” The in-house team included General Counsel Tom Mielke, Deputy General Counsel Jeff Melucci, Rob Westover, Jeff McFall, Tricia Kinney, John Broderson, Pat Wheeler and Debra Aidun.
Baker Botts has worked with Kimberly-Clark in the past on deals, including a $2.1 billion public offering of debt securities the company executed in 2007.
Halyard handled the deal primarily in-house, seeking advice from General Counsel John Wesley and Deputy General Counsel Ross Mansbach.
Halyard is a global technology company focused on preventing infection, eliminating pain and speeding recovery. The company had a market capitalization of approximately $1.8 billion at the time of the spin-off. Halyard has approximately 16,500 employees and is headquartered in Alpharetta, Ga.
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