Texas corporate dealmakers had another a brisk week. Power producer Vistra Energy announced it was buying cross-state competitor Dynegy for $1.7 billion, plus there was activity in the food, financial services, chemicals, mining and waste industries, along with oil and gas.
Thirteen transactions with a combined value of $4.7 billion were announced between Oct. 23 and Oct. 30. The companies employed 17 law firms and 94 Texas attorneys to advise their clients.
Here is a summary of the week in Texas M&A and securities offerings:
Vistra, Dynegy use Simpson, Skadden for $1.7B merger
Irving-based Vistra Energy General Counsel Stephanie Zapata Moore is overseeing her first mega-transaction since the new power company was formed a year ago from the remains of bankrupt Energy Future Holdings.
Vistra announced Monday that it is acquiring Houston-based Dynegy for $1.7 billion. The two energy companies will have a combined enterprise value of $20 billion and a market cap of $10 billion.
It is an all-stock deal in which Vistra shareholders will own 79 percent of the combined company and Dynegy shareholders will hold 21 percent.
The GCs for the two companies turned to New York and Washington, D.C. lawyers as legal advisers on the transaction. Moore hired Simpson Thacher & Bartlett, while Dynegy General Counsel Catherine Callaway James turned to Skadden, Arps, Slate, Meagher & Flom for its outside legal work.
Simpson M&A partner Breen Haire did pitch in for Vistra out of Houston.
The transaction is being led by Moore, a former lawyer at Gardere and former GC at power generating giant Luminant. Moore took over the corporate legal department’s reins of Vistra, which is the parent holding company of TXU Energy and Luminant, last fall when the two power companies were spun-off from EFH as part of EFH’s restructuring.
Several other members of the Vistra legal department are playing key roles, including associate general counsel Dan Kelly and Cecily Gooch; managing counsel Greg Santos, Sam Siegel and Amanda Doncarlos; and counsel Seth Rasmussen.
Weil aids Kainos on Trilliant sale to Blackstone-backed Badger
Weil, Gotshal & Manges said Oct. 24 that Dallas partner Glenn West advised private equity Kainos Capital on its sale of Trilliant Food and Nutrition to an entity sponsored by the Blackstone Group.
Weil didn’t reveal any more details about the deal. But according to a Moody’s Investors Service report on Sept. 12, Kainos sold the company to an entity called Badger Finance for $389 million, with Blackstone kicking in $291 million in cash. Badger paid the balance with part of the proceeds from a $250 million, seven-year secured term loan, the rest of which will be used to repay existing net debt and fund capital investments.
West has advised Kainos before, including on its acquisition of JTM Foods and Del Monaco Foods by its portfolio company, Kettle Cuisine, and in the sales of its other portfolio companies, Healthcare Solutions and InterHealth Nutraceuticals.
Wisconsin-based Trilliant produces tea and coffee products, including the Victor Allen’s Coffee brand, to food service and retail industries and offices. Kainos acquired it from Norwest Equity Partners in 2015 for an undisclosed sum (it typically invests $50 million to $150 million its portfolio companies).
Dallas-based Kainos is led by former Hicks, Muse, Tate and Furst principal Andrew Rosen, who established and led the U.S. food and consumer products group. The group ended up investing $2 billion in equity in more than 28 companies. Last year, Kainos closed its second fund at $895 million.
V&E, Locke Lord counsel on C&J Energy’s $240M O-Tex purchase
Onetime bankrupt C&J Energy Services said Oct. 25 it acquired O-Tex Holdings and its subsidiaries, including O-Tex Pumping, from private equity firm White Deer Energy for $240 million. O-Tex was founded in 2007 and is the fourth largest provider of oilfield cementing services in the U.S.
Vinson & Elkins advised C&J, with a team led by partners Steve Gill and Creighton Smith, senior associate Scott Rubinsky and associates Michael Marek, Sara Bloom and Alex Lewis, all of Houston.
Assisting were partner John Lynch and senior associate Lina Dimachkieh in Houston (tax); senior associate Matt Dobbins in Houston (environmental); partner Sean Becker in Houston (labor/employment); partner David D’Alessandro in Dallas (executive compensation/benefits); associate Courtney Hammond in Dallas (real estate); and senior associate Sarah Mitchell in Dallas (litigation/insurance). The firm also received antitrust assistance from its Washington, D.C. office.
C&J’s general counsel is Danielle Hunter, a Tulane-trained lawyer who joined the company in 2011 after working as an associate at V&E.
Locke Lord assisted O-Tex with a team led by partner Joe Perillo in Houston. Additional advice was provided by partners Michael Blankenship, Steve Boyd, Walker Clarke, Jerry Higdon, Paul Pruett, Ed Razim and Buddy Sanders; associates Lauren Corbeil, Elizabeth Corey, Rachel Fitzgerald and Burke Wendt (all of Houston); and partner Van Jolas (Dallas).
The combination of O-Tex and CJ’s cementing businesses should provide some cost-saving opportunities while consolidation is a natural positive with respect to pricing, analysts at Piper Jaffray’s Simmons & Co. said in a note.
C&J filed for Chapter 11 last year and emerged from bankruptcy this past January. Debt investors became stockholders in the reorganized company, including Blackstone and Solus Alternative Asset Management. Patrick Murray, the former CEO of Dresser Inc., was named as C&J’s new chairman in January.
Kirkland represents Linn Energy on $285M Williston asset sale
Formerly bankrupt oil and gas explorer Linn Energy continued with its asset sales program, announcing Oct. 24 it had agreed to sell its interest in properties in the Rockies’ Williston Basin to an undisclosed buyer for $285 million.
Houston lawyers from Kirkland & Ellis, which worked on Linn’s restructuring, advised Linn on the sale with a Houston team that included corporate partners Rahul Vashi and Anthony Speier and associate Lindsey Jaquillard. Tax partner Chad McCormick and associate Joe Tobias also pitched in. Linn’s general counsel is Candice Wells.
RBC Richardson Barr and Jefferies LLC were Linn’s co-financial advisers.
Linn Energy Inc. was formed in February 2017 as the reorganized successor to Linn Energy LLC. Its focus is the upstream and midstream development of the Merge, Scoop and Stack plays in Oklahoma but it’s also pursuing emerging horizontal opportunities in the Mid-Continent, Rockies, North Louisiana and East Texas.
MWSW counsels Gibraltar Cable on sale to Tecum, Framework Capital
Basil Mahmoud, a partner at Metcalfe Wolff Stuart & Williams in Austin, represented Gibraltar Cable Barrier Systems on its sale to Western Allegheny Capital Partners and its unit Tecum Equity Partners for an undisclosed sum. Framework Capital also participated in the purchase, which was announced Oct. 24.
Gibraltar CFO Jim Bryer, a University of Texas-trained lawyer, did most of the heavy lifting on the transaction, a source said. Jones Day advised Western Allegheny out of its Cleveland office.
Mahmoud represents businesses from startup to sale. He previously was a partner with Drenner & Golden Stuart Wolff in Austin after working as an associate at Brobeck, Phleger & Harrison in Austin and Bracewell & Patterson (now Bracewell) in Houston.
Austin-based Gibraltar makes and distributes high tension cable barrier products designed to contain and redirect errant vehicles from road hazards. Framework Capital is led by Jerry McGee and has offices in Houston and Newport Beach, Calif. Pittsburgh-based Tecum Equity Partners is a fund backed by family office Western Allegheny Capital and is led by Stephen Gurgovits Jr.
Porter Hedges, Hoover Slovacek advise on Quality Oil Tools’ $1.75M purchase by Sequitur’s Chromatic
Asset sales by distressed companies continue in the oil patch, despite rising oil prices. Valve maker Chromatic Industries, a unit of Sequitur Energy Resources, said Oct. 25 it acquired certain assets and the principal business of the bankrupt oil equipment provider, Quality Oil Tools, for $1.75 million. Oil States Industries was the second-highest bidder with an offering of $1.5 million.
Porter Hedges bankruptcy partner Aaron Power advised Jennings, La.-based Quality Tools on the sale while Hoover Slovacek partner Ed Rothberg assisted Chromatic. Both attorneys are out of Houston. Simmons & Co.’s Sanjiv Shah in Houston provided financial advice to the seller.
Quality Oil Tools filed for bankruptcy in June, saying it had assets of between $1 million and $10 million and liabilities of $10 million to $50 million. Affiliate QOT Holding Co., which also filed, disclosed that it had assets of less than $50,000 and liabilities of $10 million to $50 million.
T&K advises BP Energy Partners on Pinnacle sale to I Squared
Thompson & Knight picked up a midstream deal this past week, saying Oct. 24 it advised T. Boone Pickens-backed private equity firm BP Energy Partners on its sale of Pinnacle Midstream to I Squared Capital through its ISQ Global Infrastructure Fund II for an undisclosed sum.
The T&K team was led by partner Steven E. Bartz and included partners Wesley P. Williams, Gaye White Lentz, J. Dean Hinderliter, Jason Patrick Loden, Ashley T.K. Phillips, William J. Schuerger, Greg W. Curry, James Morriss III, Anthony J. Campiti, William M. Katz Jr. and Andrew P. Flint. All attorneys are based in Dallas except for Lentz, Phillips and Morriss, who are in Austin, and Flint, who is in Houston.
A T&K spokeswoman said the firm wasn’t able to provide BPEP’s counsel. But according to the firm’s website, BPEP’s outside general counsel is Warren Garden, a partner at Block Garden & McNeill, a boutique business law firm in Dallas he co-founded in 2007. RBC Capital Markets provided financial advice to Pinnacle.
Pinnacle provides crude and natural gas gathering, natural gas processing and related midstream services in the hot Delaware portion of West Texas’ Permian Basin. Pinnacle’s management, including founder and CEO Greg Sargent, is staying on.
From a non-legal perspective, Managing partner and founder Michael Watzky led the deal for Dallas-based BP Energy Partners and founding partner Adil Rahmathulla headed the transaction for New York-based I Squared, which has an office in Houston.
Akin Gump, Baker Botts, Bracewell work on Valero’s $508M asset deal
Valero Energy Corp. dropped down more assets to its master limited partnership, Valero Energy Partners, on Oct. 26 for $508 million. Texas lawyers from three different firms benefited from the work.
Akin Gump Strauss Hauer & Feld represented the conflicts committee of the board of Valero Energy Partners’ general partner, Valero Energy Partners GP. The team included partner David Elder and associate Cynthia Perez Angell in Houston.
Providing financial advice to the committee was Evercore, which received outside legal counsel from Bracewell partner Will Anderson and associate Charlotte Keenan in Houston.
Baker Botts advised Valero Energy Corp., including partner Jeremy Moore, associate Jude Dworaczyk, partner Rachael Lichman, associate Malory Weir and partner Steve Marcus. All are based in Houston except for Marcus, who is in Dallas. The deal team also received assistance from its Washington, D.C. office.
Valero’s general counsel is Jay Browning. The Texas Tech-trained lawyer was an associate at Akin Gump in San Antonio and an attorney in the corporate/transactional practice of Baker Botts in Austin before joining Valero in 1993.
The deal includes terminal assets at Valero’s Port Arthur refinery as well as the Parkway Pipeline, which links Valero’s St. Charles refinery with the Plantation and Colonial pipeline systems in Collins, Miss. The assets are expected to boost EBITDA by $60 million in the first 12 months of operation.
Duane Morris, T&K work on Energy Hunter Resources’ $43M IPO
Dallas wildcatter Gary Evans is back in the game, taking his new company, Energy Hunter Resources, public with a $43 million offering. The IPO priced at $9 per share this week, at the low end of its expected $9 to $11 per share range. The proceeds will be used to pay for the company’s $22.6 million purchase of properties in the Permian Basin.
Duane Morris partners Joel Ephross and Dean Colucci in Houston are representing Energy Hunter.
Thompson & Knight is assisting the underwriters, with a team that was led by partner Kenn Webb in Dallas and included Houston associates Stephen Grant, Walker Brierre and Cesar Leyva. The underwriters include Stifel, B. Riley & Co. and FBR Capital Markets.
Evans previously led Magnum Hunter Resources, which borrowed a great deal of money to fund acquisitions during the good times but then was forced to file for bankruptcy last year amid lower commodity prices. It emerged five months later without Evans at the helm. He founded Energy Hunter shortly thereafter; its headquarters is in Grapevine.
It’s not clear from public documents whether Energy Hunter has a general counsel. Evans’ previous general counsel, Paul M. Johnston, is serving in the same capacity at Irving, Texas-based Blue Ridge Mountain Resources, Magnum Hunter’s successor company.
Haynes and Boone represents KMG Chemicals on $186M offering
Haynes and Boone said it advised Fort Worth-based KMG Chemicals Inc. in a $186 million public offering of common stock that closed Oct. 23. The offering included 3 million shares of common stock of KMG and an additional 450,000 shares purchased by the underwriters.
Houston partner Bill Nelson led the Haynes and Boone team representing KMG. He was assisted by partner Kristina Trauger and associate Sameer Saxena, also of Houston.
New York firm Davis Polk & Wardwell counseled the underwriters, which included Goldman Sachs and KeyBanc Capital Markets.
Gibson Dunn, Baker Botts assist on WM’s $750M debt offering
Gibson, Dunn & Crutcher’s new Houston office scored securities work this week, assisting the underwriters on Waste Management’s $750 million offering of senior notes on Oct. 30.
The Gibson Dunn team included partner Hillary Holmes, associate Harrison Tucker and tax partner James Chenoweth. The team also had assistance from the firm’s San Francisco and Denver offices.
Holmes’ previous firm, Baker Botts, advised Waste Management, including partners Jason Rocha and Mike Bresson and associates Jude Dworaczyk and Gita Pathak, all of Houston. Courtney Tippy, assistant general counsel at Houston-based Waste Management, led the in-house team.
Latham represents Consol Mining on $350M notes offering
Latham & Watkins’ Houston office also snared securities work this week, representing Consol Mining Corp. on a $350 million notes offering announced Oct. 23.
Partner David Miller is leading the deal team, which includes counsel Pamela Kellet, associates Sean Ehni, Bryan Ryan and A.J. Million, tax associate Michael Rowe and environmental partner Joel Mack.
Not Previously Disclosed:
Weil advises Orix on reported $300M Lancaster Pollard purchase
Weil Gotshal & Manges’ Dallas office said Oct. 24 it had won some financial services deal work, counseling Orix USA Corp., the Dallas-based unit of Japanese financial services group Orix Corp., on its acquisition of Lancaster Pollard from Stone Point Capital. The terms were undisclosed.
One report put the sale price at $300 million. The deal was announced on June 9 and closed Sept. 12.
The Weil deal team was led by partner James Griffin and included associates Ryan Gorsche, Michael Andrews and Camille Walker. They received support on executive compensation/benefits, labor, technology/intellectual property transactions, tax, environmental/regulatory and insurance matters from attorneys in its New York, Silicon Valley and Washington, D.C. offices.
New York-based Kramer Levin Naftalis & Frankel represented Columbus, Ohio-based Lancaster Pollard, which provides investment banking, mortgage banking, balance sheet lending and private equity services to senior living and healthcare clients.
Beekman Advisors Inc. and Houlihan Lokey Inc. provided financial advice to Orix while Credit Suisse Securities (USA) did so for Lancaster Pollard.