John Goodgame is having a very good year.
A corporate partner at Akin Gump Strauss Hauer & Feld in Houston, Goodgame has led more mergers and acquisitions during the first seven months of 2015 than any other lawyer in Texas.
The Texas Lawbook’s Corporate Deal Tracker shows that Goodgame has led or co-led 11 corporate transactions so far this year valued at $5.5 billion.
Goodgame’s clients are in the energy industry. Most of the companies are in the midstream sector.
Goodgame has worked on smaller deals (Bison Midstream’s $35 million acquisition of Summit Investments) and billion-dollar transactions (Energy Transfer Partner’s $2 billion deal with subsidiary Sunoco).
Asked why he has been so busy, Goodgame said it was partially the “luck of the draw.” He said the last couple of months have been busier for him than usual on the M&A side, but the year-to-date activity is overall typical to the norm.
“A number of my clients identified opportunities to deals, and I was fortunate to be involved,” Goodgame said. “To a large extent, though, [my busyness] is because of my colleagues at the firm. I did not do any of those transactions by myself.”
Goodgame, who has worked on both the buyer’s side and seller’s side, said it has been predominantly a seller’s market over the past decade for deals involving midstream assets, which meant buyers often had to agree “to all of the seller’s demands except the most egregious” to complete the deal.
But those golden days for the sellers could disappear if oil and gas prices remain low, he said.
“If oil and gas prices stay weak, we will likely be in a more distressed situation in the upstream and midstream businesses; I expect that it will not be a seller’s market,” Goodgame said. “That will likely mean that representing sellers will be a lot harder, both in terms of negotiation and also in the fact that the assets or businesses sold will not generate the value that the sellers had once hoped.”
In his biggest transaction, Goodgame, along with law partner Chris LaFollette, led Dallas-based pipeline giant ETP in its agreement to drop down 100 percent of Susser Holdings to its subsidiary, Sunoco LP for $1.94 billion. Goodgame also co-advised ETP with LaFollette in another transaction – his second highest-dollar deal – when the master limited partnership agreed to exchange $1.2 billion worth of common units with parent company Energy Transfer Equity for distribution rights.
Though larger-value deals often require more time, negotiation, legal and financial advice and regulatory compliance, Goodgame did not discount the complexity a small- to mid-sized deal can also bring.
“Contrary to what people might think, big deals can be simple, and small deals can be very complex,” he said. “One reason for that is, just because a deal is relatively small doesn’t mean that it is small to the party you are representing.
“That having been said, larger deals often involve whole companies, and that’s where things get really more complex,” he added. “The larger the transaction, the more likely you are to have additional work streams to manage in connection with the acquisition itself – SEC reporting, bank or other financings and related capital markets transactions.”
So far, the largest Texas lawyer-led deal of 2015 is the $18 billion merger of ETP and Regency Energy Partners, two MLPs controlled by Energy Transfer Equity. Latham & Watkins’ Ryan Maierson and Debbie Yee and Baker Botts’ Neel Lemon and AJ Ericksen led the merger, which closed on April 30.
Goodgame worked on the deal as well, but was not considered a lead by the Corporate Deal Tracker because he was not on the buyer’s or seller’s side (he represented Regency’s conflicts committee, which approved the terms of the transaction).
When asked what’s in store for the second half of 2015, Goodgame was quick to add a disclaimer: “You should never listen to a lawyer on matters of economic forecasting.”
But his clients say that M&A activity will escalate if hydrocarbon prices stay weak.
“We will continue to see distress situations develop or worsen, especially in the most upstream-exposed sectors – E&P, oil field service and gathering & processing, Goodgame said. “Even if we’re not talking distress, we will probably continue to see consolidation as industry players search for efficiencies and cost reductions.
“I for one hope that this scenario doesn’t occur, though,” he added. “I’d rather see my clients and their industry do deals in a market where they’re making money as opposed to one where they’re trying to protect against a loss or failure.”