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Law360 (April 23, 2020, 11:01 AM EDT) -- Expedia Inc. has secured roughly $3.2 billion in financing, including a $1.2 billion investment from two major private equity firms, and announced a pair of new executives, some executive pay cuts and furloughs for some employees as a reaction to the coronavirus pandemic, which has decimated the travel industry.
In addition to the $3.2 billion in financing, which features an equity investment of $1.2 billion from Apollo Global Management LLC and Silver Lake Partners and $2 billion in new debt, the online travel giant said Thursday that it has appointed Peter Kern as CEO and Eric Hart as chief financial officer. Expedia also announced that senior executives will take a 25% reduction in salary for the rest of 2020 and said it will be implementing furloughs and reduced work week programs for certain employees.
As part of the announcement, David Sambur, co-lead partner of Apollo's private equity business, and Greg Mondre, co-CEO and managing partner of Silver Lake, will join the Expedia board of directors.
All of the moves are meant to help Expedia maintain financial strength as it grapples with a difficult business environment amid the ongoing COVID-19 outbreak.
Kern, who in addition to becoming CEO is also vice chairman of the Expedia board, said in the press release, "We are excited to have Apollo and Silver Lake as valued partners in this effort as they share our strong belief in the long-term growth of Expedia and look forward to David and Greg's invaluable insights as board members."
"Between the significant steps Expedia Group continues to take to simplify the business, the talented leaders I have gotten to know over the last several months, and this new funding, we are in better position to continue to rise to the current challenge and come out even stronger than before — we understand the financial challenges ahead and we will continue to prudently address those needs," Kern said.
Kern has been a member of the Expedia board since 2005, has been the vice chairman since 2018, and previously served as CEO of Tribune Media. Hart, meanwhile, has been with Expedia for 11 years and has held many roles. He has served as acting CFO throughout the coronavirus crisis.
"[Hart is] a strong executive who's been truly tested these past five months as acting CFO during both the reorganization and the Corona crisis," said Barry Diller, chairman and senior executive for Expedia. "He has fully earned permanent status as CFO."
Details of the furloughs and reduced work week programs were not disclosed, and the company said that its intention is that employees impacted will continue receiving Expedia health care benefits coverage. Expedia plans to reevaluate how things are going by Aug. 31.
Wachtell Lipton Rosen & Katz is acting as legal counsel to Expedia, with J.P. Morgan and Moelis & Co. LLC serving as joint financial advisers and placement agents.
The Wachtell Lipton team is led by corporate partner Andrew J. Nussbaum, finance partner Joshua A. Feltman, corporate partner Edward J. Lee and finance counsel Neil M. Snyder, and includes corporate counsels Nancy B. Greenbaum and Kathryn Gettles-Atwa and associates Chelsea N. Darnell, Michael Ye and Helen A. Diagama; finance associate Elyssa C. Eisenberg; and tax partners Jodi J. Schwartz, Tijana J. Dvornic and associate Swift S.O. Edgar.
Sidley Austin LLP and Paul Weiss Rifkind Wharton & Garrison LLP are serving as legal counsel to Apollo, with Evercore acting as lead financial adviser. Goldman Sachs & Co. LLC is also acting as a financial adviser.
The Sidley team is led by M&A and PE partner Adam Weinstein and includes M&A and PE partner John Butler; capital markets partner Sam Gandhi; employee benefits partner Ben Rosemergy; privacy and cybersecurity partner Alan Raul; technology and IP transactions partner Jennifer Coplan; securities and shareholder litigation partner Alex Kaplan; and tax partners Tracy Williams and Scott Heyman. Also advising were counsels Daniel Ray, James Weiss and Andrei Pinchuk; and associates Lanna Lan, Betsy Mead, Karam Pirani, Richard Schneider, Shay Banerjee, Joshua Card, Martha Clarke, Pragyan Patnaik, Daniel Pruze and Alan Sun.
Simpson Thacher & Bartlett LLP is serving as legal counsel to Silver Lake.
The Simpson Thacher team includes M&A partner Kathryn Sudol and associate Janet Yu; credit partner Jennifer Hobbs and associate Mimi Cheng; capital markets partners Ken Wallach and Sunny Cheong; tax partner Katherine Moir; and funds partner Jonathan Karen and associate Jordan Cross.
--Editing by Alyssa Miller.
Update: This story has been updated to include additional counsel information.
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