Microsoft’s Strategic Investment in Barnes & Noble

On April 30, 2012, Barnes & Noble Inc. and Microsoft announced the formation of a strategic partnership that will bring together, in a new subsidiary to be formed by Barnes & Noble (“Newco”), the Digital and College businesses of Barnes & Noble. Cravath represented Barnes & Noble in connection with this transaction. Microsoft will make a $300 million investment in Newco at a post-money valuation of $1.7 billion in exchange for an approximately 17.6% equity stake. Barnes & Noble will own the remaining approximately 82.4% equity stake in Newco, which will have an ongoing relationship with Barnes & Noble’s retail stores.

The Cravath team included partner Andrew R. Thompson and associates Matthew C. Merkle, Travis J. Wofford and Thomas H. McElroy on corporate matters; partner Stephen L. Gordon and associates J. Leonard Teti II and Rachel H. Kiwi on tax matters; partner Paul H. Zumbro, practice area attorney Sarah F. Rosen and associate Sarah Dunn Davis on banking matters; partner Eric W. Hilfers and associate Jarrett R. Hoffman on executive compensation and benefits matters; partner Roger G. Brooks on litigation matters; and partner Christine A. Varney, practice area attorney Robin C. Landis and associate Margaret T. Segall on antitrust matters. Andrew B. Langworthy also worked on corporate matters.