Merger and acquisition, capital market and venture capital activity picked up this past week, reaching 13 transactions worth $14.2 billion versus eight deals valued at $6.3 billion the previous week.
Fourteen law firms and 80 lawyers were involved in the deals, versus eight firms and 96 Texas lawyers the prior week.
Deal values were off 30 percent from 2018’s weekly high of $20.4 billion reached in May and 14 percent off from the previous high of $16.5 billion hit in January.
Levels this past week were pushed higher by large capital raises by a New York private equity firm that involved a law firm in Texas and billion-dollar notes offerings by energy companies. There also were transactions involving software, crypto finance, pet foods and gauges.
Private equity activity and a strong economy are pushing M&A levels across the country higher and higher, with $2.1 trillion worth of deals announced so far this year, up 56 percent over the same period last year, according to the Wall Street Journal citing figures from Dealogic. If the pace continues, 2018 would break 2007’s record of $4.3 trillion, the newspaper said.
STB advises two Blackstone funds on $9.4B in capital raises
Simpson Thacher & Bartlett said last week it advised Blackstone on two fund raisings worth $9.4 billion.
The first fund is Blackstone Real Estate Partners Asia II, which rounded up $7.1 billion in capital commitments – the largest ever dedicated to real estate investing in Asia, according to a statement June 13.
The second fund is Blackstone Capital Partners Asia, which has $2.3 billion in capital commitments. It’s Blackstone’s first Asian private equity fund and will have at least $3.8 billion to invest when coupled with associated commitments from Blackstone’s global buyout fund.
Simpson counsel James Hays in Houston was involved in both matters, including heading the structuring and set-up for European investors. For BCP Asia, he worked with Yianni Georgeton, who is an associate in the firm’s Houston office.
Attorneys in the firm’s New York and Hong Kong offices also worked on the funds.
HuntonAK, Latham aid on Energy Transfer’s $3B notes offering
The Houston offices of Hunton Andrews Kurth and Latham & Watkins aided on Energy Transfer Partners’ $3 billion notes offering.
The HuntonAK team, which counseled the underwriters, included partners Mike O’Leary, Jordan Hirsch, Tom Ford and Robert McNamara and associates Mike Hoffman, Brooke Milbauer and Leslie Slaughter.
The Latham team, which assisted the Dallas-based midstream services provider, included partners Debbie Yee and Bill Finnegan and associates Kevin Richardson, Dan Harrist, Madeleine Neet and Lexi Udeh.
Energy Transfer Partners’ general counsel is Tom Mason, who has been at the partnership since 2007. Before that, the UT Law grad was a partner at Vinson & Elkins in Houston for five years.
The underwriters were led by Mizuho Securities USA, MUFG Securities Americas, SMBC Nikko Securities America and TD Securities (USA).
The offering included $500 million in 4.2 percent senior notes due 2023, $1 billion in 4.95 percent senior notes due 2028, $500 million in 5.8 percent senior notes due 2038 and $1 billion in 6 percent senior notes due 2048.
ETP intends to use the net proceeds to repay other notes due in June and July of this year, repay borrowings under its revolver and for general partnership purposes.
Gibson Dunn, Mayer Brown work on Concho’s $1.6B notes offering
Gibson Dunn & Crutcher and Mayer Brown also grabbed securities work, advising on Concho Resources Inc.’s $1.6 billion senior secured notes offering.
Gibson Dunn’s team, which represented Midland-based Concho, included Houston corporate partner Hillary Holmes, Dallas corporate partner Doug Rayburn and Houston corporate associates Harrison Tucker and Melissa Pick along with a corporate associate in the firm’s San Francisco office. Specialists included Houston tax partner James Chenoweth.
Mayer Brown’s team, which advised the underwriters, included Houston corporate partners Jeff Dobbs and Bill Heller along with a corporate partner in the firm’s New York office and Houston corporate associate Vince Cangolosi. Specialists on that team include Houston tax partner Ed Osterberg.
Concho’s general counsel is Travis L. Counts, who has been at the company for five years. Before that the Tulane-trained lawyer was vice president of legal and deputy general counsel at Halcon Resources Corp., associate general counsel of corporate at Petrohawk Energy and a member of Hinkle Elkouri Law Firm in Kansas.
The issue includes $1 billion in 4.3 percent senior unsecured notes due 2028 and $600 million in 4.85 percent senior unsecured notes due 2048.
BofA Merrill Lynch, J.P. Morgan and Wells Fargo Securities are joint bookrunning managers for the offering.
After the closing of its $9.5 billion acquisition of RSP Permian Inc., Concho intends to use the net proceeds to redeem RSP’s 6.625 percent senior notes due 2022 and 5.25 percent senior notes due 2025 for $1.2 billion.
The company also plans to repay part of the outstanding indebtedness under RSP’s credit facility, which had outstanding borrowings of $445 million as of March 31. The rest will be invested in cash, cash equivalents and U.S. government securities.
HuntonAK represents underwriter on $81M USA Compression block trade
HuntonAK said June 15 it advised underwriter JP Morgan Securities on a $81 million block trade of USA Compression Partners units.
The team included partners Mike O’Leary, Taylor Landry, Robert McNamara and Matt Grunert and associates Mike Hoffman, Erin Juvenal and Audra Herrera.
The sale, by USA Compression Holdings, consisted of 5 million of its common units representing limited partner interests with a variable price reoffering.
The transaction was announced June 12 and closed June 15.
Bracewell advises Pioneer Natural on sale of Raton assets for $79M
Bracewell said June 15 it represented Dallas-based Pioneer Natural Resources on its sale of its assets in southeastern Colorado’s Raton Basin to Evergreen Natural Resources for $79 million. Pioneer expects to close the deal by the end of July.
The team included partners G. Alan Rafte, Bruce R. Jocz and Rebecca L. Baker and associate Sidney Troy Nuñez. Attorneys from the firm’s Washington, D.C. and New York offices pitched in.
Pioneer’s general counsel is Mark Kleinman, who joined the company in 2004 as vice president, corporate secretary and chief compliance officer.
The UT Law grad started his legal career in 1986 as an associate at Dallas-based Jackson Walker and later was assistant general counsel of Sterling Software, which Computer Associates International bought in 2000, and general counsel of Inet Technologies, which Tektronics purchased in 2004.
Baker Hostetler advised Evergreen with an attorney out of its Denver office.
The assets represent all of Pioneer’s interests in the field, including its producing gas wells and related infrastructure. The assets produced 84 million cubic feet of natural gas per day, or 14,000 barrels of oil equivalent per day, in the first quarter.
Pioneer expects to book a pretax noncash loss of $65 million to $75 million on the sale in the second quarter.
V&E represents Clovis Point on $60.6M sale of position in MediaPRO
Vinson & Elkins confirmed last week that it advised Clovis Point on the sale of a majority of its position in MediaPRO to private equity firm Frontier Capital for $60.6 million.
Partners Chris Rowley and James Garrett represented Clovis Point while partner David Peck assisted them on tax matters.
MediaPro used Cairncross & Hempelmann out of Seattle and Frontier tapped Womble Carlyle Sandridge & Rice in Charlotte.
DA Davidson was MediaPro’s investment banker.
V&E advised Clovis Point on its preferred equity investment in MediaPro.
Houston-based Clovis Point said June 7 that the transaction resulted in a 5.3 times multiple of invested capital and a 100 percent internal rate of return on its investment.
MediaPRO is a Bothell, Washington-based provider of security, privacy, and compliance awareness training software solutions.
Chris Joseph is managing partner and principal of Clovis Point, which is a lower middle-market private equity fund that focuses on software and technology-enabled business services companies.
Egan Nelson, V&E aid on Unchained Capital’s $2.9M seed round
Egan Nelson and Vinson & Elkins worked on the closing of a $2.9 million seed round of venture funding for Austin-based crypto-finance company Unchained Capital.
Brian Alford was part of the team at Egan Nelson, which also tapped an attorney in its New York office. Wes Watts worked on it from V&E.
The funding, which was announced June 7, will go toward expanding Unchained Capital’s team and innovating its proprietary financial services and wealth management offerings.
Several strategic investors participated in the venture round, including Michael Komaransky, formerly of Cumberland Mining; Brian Spaly, an angel investor and co-founder of Bonobos and Trunk Club; Mike W. Erwin and Whurley of Ecliptic Capital; and Ezra Galston, founder of Starting Line and an early venture investor in the crypto sector.
Komaransky, Erwin and Galston will join Unchained Capital’s board.
Galston said in a statement that crypto assets are a nearly $500 billion asset class and Unchained Capital aims to help consumers use their holdings to obtain a mortgage, gain credit or serve as collateral.
The company is led by Joe Kelly, who previously co-founded and led DFJ Mercury-backed Infochimps. That company was sold to IT products and services giant CSC in 2013 for an undisclosed sum.
Skadden aids New Mach Gen owner Talen Energy on restructuring
Skadden Arps Slate Meagher & Flom said last week it advised equity holder Talen Energy on the restructuring of New Mach Gen, the company’s second time in bankruptcy in four years.
The team included restructuring and energy and infrastructure attorneys in the firm’s New York and Washington, D.C. offices. But also assisting were M&A partner Eric Otness in Houston along with energy and infrastructure projects associate Mark Schlackman and corporate associate Rebekah Reneau, also of Houston.
Evercore was New Mach Gen’s financial advisor, Alvarez & Marsal North America was its restructuring advisor and Young Conaway Stargatt & Taylor was its legal advisor on the bankruptcy. White & Case represented first lien lender Beal Bank out of New York.
The restructuring will be implemented through a prepackaged Chapter 11 case that began in the U.S. Bankruptcy Court in the District of Delaware on June 11 and should be completed in the second half of this year. The owner of three natural gas-fired power plants listed more than $700 million in secured debt.
New MachGen plans to transfer its interests in its plant in Arizona to its first lien lenders in exchange for a reduction in its indebtedness under its refinanced credit facility.
Talen, a spinoff by PPL Corp., bought Mach Gen in 2015 for $1.175 billion. The next year, equity holder Riverstone Holdings bought the 65 percent it didn’t own of Talen for $1.8 billion.
CEO Dale Lebsack and CFO John Chesser took over management of the company in June of last year and have been working with the company’s lender and equity owner to improve its capital structure.
”The company’s existing balance sheet assumed higher capacity payments and higher margins from our three assets, but poorer-than-expected results delivered lower cash flows, impeding our ability to service debt,” Chesser said in a statement.
Jones & Spross represents Nulo Pet Food on investment from Main Post
Robyn Siers of Austin law firm Jones & Spross represented Nulo Pet Food on its undisclosed investment from San Francisco private equity firm Main Post Partners.
Morrison & Foerster represented Main Post with an attorney outside of Texas.
Austin-based Nulo Pet Food claims to be an industry leader in pet nutrition and innovation, with all of its recipes high in meat protein and grain-free with low glycemic carbohydrates and a patented probiotic for immune and digestive health.
Nulo is led by founder Michael Landa. Josh McDowell and Jeff Mills led the investment from Main Post.
HuntonAK advises 1Derrick on sale to Drillinginfo for undisclosed sum
Hunton Andrews Kurth said June 13 it advised 1Derrick on its sale to Drillinginfo for an undisclosed sum.
The team included Phil Haines, Tony Eppert, Robert McNamara, Gary Abelev, Chris Adcock, Amanda Thienpont, Oliver Fankhauser, Emily Cabrera and Marshall Horton. Lawyers in the firm’s New York and Washington, D.C. offices also helped.
Austin-based Drillinginfo tapped Willkie Farr & Gallagher out of New York.
Drillinginfo also bought the research and database business of Houston-based PLS, which tapped solo practioner Patrick Devine in Houston for legal advice.
Drillinginfo said the acquisitions offer solutions for sourcing, valuing and analyzing asset and corporate transactions, positioning it as a leader in delivering intelligence on oil and gas mergers, acquisition, divestment transactions, lending activity, equity investments and assets for sale.
CEO Jeff Hughes said the company has been looking to acquire PLS and 1Derrick since 2016 to fulfill its vision of delivering a comprehensive platform for quickly identifying and valuing transaction opportunities in the U.S. and across the world.
PLS has 2,200 corporate clients and 12,500 users worldwide. 1Derrick serves 180 clients.
ExxonMobil, Plains sign letter of intent to pursue Permian pipeline JV
ExxonMobil and Plains All American Pipeline announced June 12 that they signed a letter of intent to pursue the creation of a joint venture to construct a pipeline to transport crude oil and condensate from multiple locations in the Permian basin to the Texas Gulf Coast.
Neither company would reveal its outside or inside counsel on the deal, given that it’s preliminary.
Richard McGee is general counsel of Plains. He joined the company in 2009 from Duke Energy, where he was president of Duke Energy International.
Randall Ebner is general counsel of ExxonMobil, having taken over from the retiring Jack Balagia in 2016.
The proposed common carrier pipeline would be designed to ship more than 1 million barrels of crude oil and condensate per day, providing an efficient and cost-effective option to transport ExxonMobil and other companies’ production to markets in Texas.
The pipeline would originate in Wink and Midland with delivery points in Webster, Baytown and Beaumont. A priority would be placed on using existing pipeline corridors to help limit potential community and environmental disruptions, ExxonMobil said.
Hallett & Perrin aids Gas Equipment on sale of Rochester Gauges to Renovo
Hallett & Perrin partner Scot O’Brien advised Gas Equipment Co. on its sale of Rochester Gauges to Renovo Capital for an undisclosed sum.
DLA Piper assisted Renovo with an attorney in its Atlanta office.
Renovo said June 12 that the acquisition launches a new platform investment in the sensor and measurement space in partnership with industry executive and Renovo operating partner Frank Guidone.
Guidone previously led Measurement Specialties, which was sold to TE Connectivity in 2014 for $1.7 billion.
Founded in 1913, Dallas-based Rochester makes gauges and sensors that measure liquid levels of various fuels, including propane, gasoline and diesel. Renovo’s investment will provide Rochester the resources and expertise to accelerate development of its products to better serve its customer base.
Renovo is a special situations private equity fund currently investing out of its second fund, which has $132 million in committed capital. It has offices in Dallas and Denver.
Jones Day, Orrick advise on Total’s petrochemicals JV with Borealis, Nova
The previously announced petrochemical joint venture of Total, Borealis and Nova Chemicals Corp. closed and Texas lawyers from Jones Day had a big hand in getting it there.
The firm said June 15 that it advised France’s Total with a team led by partner Jeffrey Schlegel and David Stringer. Schlegel said the overall team consisted of more than 55 lawyers from 12 offices representing 13 practice areas.
The firm’s Texas partners who worked on the deal included Todd Wallace, Louis Jenull, Joe Beauchamp, Bruce McDonald, Michelle Brown, Joanne Bush, Scott Cowan, Katherine Ettredge and Anna Raimer. The associates were Kit Rockhill, Alexandra Wilde, Alixandra Charles, Micah Doak, Viddy Harris, An Tran, Matthew Harper, Connor Kring and Will Mason.
Orrick counseled Borealis and Nova with a team that included partners Blake Winburne and Jonathan Ayre and associates Alessandra Grace and Joe Lawlor.
The joint venture, which was announced in February, closed May 23 after receiving all required regulatory approvals.
The JV, Bayport Polymers, is 50 percent owned by Total and 50 percent owned by Novealis Holdings, a joint venture between Borealis and Nova. It includes a $1.7 billion ethane steam cracker being built in Port Arthur (its startup date has been set for 2020); Total’s polyethylene facility in Bayport; and a new polyethylene unit at Total’s Bayport site.
President Diane Chamberlain said in a statement that the partnership will create a major player in the U.S. polyethylene market and take advantage of low-cost feedstocks in the U.S. to meet the growing global demand for plastics.
Nova is headquartered in Calgary and owned by Mubadala Investment Co. of the Emirate of Abu Dhabi, United Arab Emirates. Borealis is based in Vienna and 64 percent owned by Mubadala and 36 percent held by Austrian oil and gas company OMV.
UPDATE: AT&T’s contentious merger with Time Warner Inc. finally closed last week at a value of $108 billion, including debt, making it the largest corporate merger announced in 2016 and the fifth largest deal in recent years.
As the Texas Lawbook previously reported, Gibson, Dunn & Crutcher partners Rob Walters, Mike Raiff and Sean Royall in Dallas were trial counsel to AT&T in the Department of Justice’s antitrust challenge to the acquisition. But Akin Gump Strauss Hauer & Feld litigation partner Mike Warnecke in Dallas also pitched in, serving as lead antitrust counsel for the pre-merger integration planning effort.
AT&T general counsel David McAtee, associate general counsel John J. O’Connor and assistant general counsel David Lawson led the inhouse legal team. Others on the team were assistant general counsel Bill Drexel, assistant general counsel James Meza III, senior legal counsel and appellate law expert Heather New, corporate counsel over external affairs Krissy Turner and senior legal counsel Brendan McMurrer.