Simpson Thacher recently advised Best Buy Co., Inc. in connection with its acquisition of a 50% interest in the retail business of The Carphone Warehouse Group PLC and the financing of a portion of the purchase price for the acquisition, including Best Buy’s “debut” debt offering and amendments to its principal credit facility to facilitate the acquisition.
Best Buy is the leading U.S. specialty retailer of consumer electronics, home office products, entertainment software, appliances and related services. Best Buy currently has its main operations in the United States, Canada and China.
The Carphone Warehouse Group PLC is a leading U.K. retailer of mobile handsets and connections, laptop computers, MP3 players and related products and services across Europe. The Carphone Warehouse also has a major fixed-line telecom business in the United Kingdom. Best Buy purchased, in effect, a 50% interest in The Carphone Warehouse’s retail business, but not its U.K. fixed-line telecom business.
In the debt offering, Best Buy offered and sold $500 million of 6.75% Notes due 2013. The offering was conducted in reliance on Rule 144A and Regulation S, with the investors to have the benefit of registration rights. The initial purchasers were led by JPMorgan and Goldman, Sachs & Co.
The credit facility amendment process involved renegotiation of certain covenants to enable Best Buy to complete, and fund a portion of the purchase price for, the acquisition. JPMorgan is the lead bank for Best Buy’s credit facility.
The Simpson Thacher team for the transaction included, among others, Glenn M. Reiter; Kirsten Davis, Samantha Shipp and summer associate Christopher Muller (capital markets); James Buresh (credit); Alan Klein, James Wallace, Dov Gottlieb and Emma Walton (M&A); Michael Isby (environmental); and Jonathan Cantor and Jennifer Klein (tax).