© 2013 The Texas Lawbook.
By Mark Curriden, JD
Senior Writer for The Texas Lawbook
(October 25) – If author Howard Franklin decides to write a sequel to The Big Year, he should focus on mergers and acquisitions in the oil patch, instead of birds on Attu Island.
The competition to represent energy and private equity companies involved in big dollar deals is far more aggressive and significantly more rewarding than identifying species of fowl.
Houston oil and gas transactional lawyer Jeff Floyd would have a leading role if The Big Year 2 focused on 2013, especially if the past few months have been any measure.
This week alone, the Vinson & Elkins partner led on two major transactions: Devon Energy’s $4.9 billion midstream deal with Crosstex Energy and Plains All American Pipeline’s $1.4 billion merger with PAA Natural Gas Storage.
Just last month, Floyd represented Huntsman Corp. in its $1.1 billion acquisition of Rockwood Holdings Inc. In April, he led the legal team that advised St. Luke’s Episcopal Health System in Houston in its $1 billion transaction with Catholic Health Initiatives.
“We’ve been incredibly busy and I think that’s going to continue,” he says. “We’re at an inflection point where some people believe things are getting better and they want to buy now before prices get too high.”
On the flip side, Floyd says, energy companies see that their assets are now valued higher and are willing to sell in order to raise capital for other investment purposes.
“In the near term, we are going to see more M&A activity in the midstream, particularly among MLPs (master limited partnerships),” he says. “I’m seeing a lot of the second-tiers interested in deals as those companies reposition their asset portfolios.”
The energy M&A market is likely to see a plethora of transactions in the $750 million to $1.5 billion range over the next six to 12 months, according to Floyd.
“I think private equity firms are going to remain active because they have a lot of cash on hand and the only way for them to make money is to put it to work,” he says. “The Fed keeping interest rates low in the long-term may actually slow deal-making because companies feel they will have access to cheap cash for a while and there’s no urgency to make a deal.”
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