On July 6 the New York-based buyout firm, co-founded by former Donaldson Lufkin & Jenrette Inc. CEO John Castle, bought Norcast Wear Solutions, a supplier of mill liners and other products to the mining industry, from
The deal begged several questions, namely: Why wouldn’t Pala sell to Bradken to begin with? And how did Bradken and Castle Harlan orchestrate their deal so fast?
Now Pala Investments has hired the law firms Allens Arthur Robinson, in Australia, and Chadbourne & Park LLP, in the United States, to find out, a spokesman for the firm confirmed to Buyouts after published reports.
Specifically, the law firms are investigating if there could have been a breach of confidentiality agreements.
Castle Harlan declined to comment on the legal preparations beyond a prepared statement: “We are highly confident of our legal position and would vigorously defend any action taken against us,” the firm said in an e-mail.
Meanwhile, Buyouts was getting conflicting accounts about Bradken’s involvement in the initial deal process between Pala and Castle Harlan. One source familiar with that process, which was run by UBS Securities, told Buyouts that Bradken was intentionally left out of the auction because it is a competitor to Norcast and the latter did not want to divulge sensitive business information. But another source close to the deal said that is not true: in fact, Bradken was included but did not pursue the deal, this source said.
Castle Harlan and Bradken have had a decade-long relationship.
“In the last ten years Castle Harlan and our Australian affiliate CHAMP have successfully partnered with corporate co-investors many times,” Howard D. Morgan, co-president of Castle Harlan, said in a prepared statement on July 7. “In several instances the corporate partner decided to own the business outright, and we at Castle Harlan saw immediate value-added from the partner and the possibility of a long term strategic fit.”