The M&A market is so hot, it could boil over.
Companies announced $2.35 trillion worth of mergers and acquisitions globally in the first half of this year, about 57 percent over the same period last year, according to Dealogic. If the market continues at that rate, this year would reach $4.8 trillion worth of deals, surpassing 2007’s $4.3 trillion record, the data firm says.
Thank economic growth, low interest rates, technology shifts and the Trump-driven tax cuts for the brisk activity, observers say.
Texas attorneys are benefiting from the deal action. Last week they advised on everything from asset sales in the oil patch (including one to a Japanese company that hopes to be a big consumer of liquefied natural gas) to the purchases of a smart transportation services provider and an environmental, compliance and waste manager by special purpose acquisition companies, known as SPACs.
The renewable industry also saw some action, with some solar power plants trading hands and a new wind farm being developed in the Texas Panhandle, the first financing deal to close in two years. There were also capital markets transactions, including a large notes offering by a large oilfield services provider.
The last week of June generated 13 deals worth $7 billion involving Texas lawyers, versus 15 deals amounting to $8.8 billion the previous week. The transactions involved 81 lawyers and seven law firms that have a Texas presence, versus 97 lawyers and 13 firms the previous week. Those aren’t bad numbers for the week before the July 4th holiday.
Weil aids Gores II on purchase of Verra Mobility, valuing it at $2.4B
Weil Gotshal & Manges Dallas partner James Griffin was involved in a big deal in late June, advising special purpose acquisition company Gores Holdings II Inc. on its purchase of Platinum Equity-backed Verra Mobility that values it at $2.4 billion.
Stockholders of Verra Mobility, a developer of smart transportation services, will get a combination of cash and shares of Gores II.
In addition to the $400 million in cash held in Gores II’s trust account, investors including Gores chairman and CEO Alec Gores and institutions GIC, Hamilton Lane and Northwestern Mutual committed to participate in the transaction through a $400 million private placement.
The transaction, announced June 21, values Verra Mobility at 11 times its expected 2018 EBITDA of $219 million, the companies said.
Griffin has worked with Gores before, counseling it on its acquisition of a majority stake in Hostess Brands in a deal that valued that target at $2.3 billion.
Gibson, Dunn & Crutcher represented Platinum Equity and Verra Mobility with lawyers outside of Texas.
Gores used Deutsche Bank as lead capital markets adviser, lead private placement agent and financial adviser; Goldman Sachs as joint capital markets advisor, joint private placement agent and financial advisor; and Moelis & Co. and Credit Suisse LLC as financial advisors.
Griffin has been involved in some big deals recently. In May he helped represent previous client SoftBank Vision Fund on its $2.25 billion investment in General Motor’s autonomous vehicle unit, GM Cruise Holdings. That same month he also led a team advising a consortium led by Abu Dhabi’s Mubadala Investment Co. on its sale of its 60 percent stake in EMI Music Publishing to Sony Corp. of America for $4.75 billion.
The parties expect to close the Verra Mobility transaction in the third quarter if Gores shareholders and regulators approve it.
Once the deal and private placement are completed, Platinum Equity and other minority owners of Verra Mobility expect to hold 42 percent of the company.
Mesa, Arizona-based Verra Mobility claims to be a global leader in smart mobility serving the world’s largest commercial fleets and rental car companies. It manages tolling transactions and violations for 8.5 million vehicles and operates 4,000 red-light, speed and school bus stop arm safety cameras.
CEO David Roberts leads the company, which previously was known as American Traffic Solutions before it acquired Highway Toll Administration and Euro Parking Collection. It now operates in 15 countries.
Platinum Equity partner Jacob Kotzubei is leading the investment. Mark Stone is CEO of Gores Holdings II.
Lime Rock Partners closes $1.9B acquisition fund
Lime Rock Partners, which invests in oil and gas exploration and production and services companies in the U.S., said June 28 it closed the $1.9 billion acquisition fund Lime Rock Partners IV AF.
The fund also has acquired the remaining assets formerly owned by Lime Rock Partners IV, a 2006 vintage fund, and received $741 million in new capital commitments from secondary and primary investors and existing investors in Fund IV, who had the choice of reinvesting or receiving full or partial liquidity.
HabourVest was the lead investor and Lime Rock employees as a group represent the single largest investor in the fund.
Morgan Lewis & Bockius counseled Lime Rock with attorneys outside of Texas. Evercore was its financial adviser.
Lime Rock’s in-house counsel on the fund was Anu Mehta, the firm’s Houston-based deputy general counsel who recently was promoted to general counsel.
The Harvard-trained lawyer has been with Lime Rock since 2012 after working as an M&A product manager at Bloomberg for a year and as an associate at Vinson & Elkins, King & Spalding and Latham & Watkins.
The vast majority of the asset value in Lime Rock Partners IV AF is a controlling interest in CrownRock LP, a Midland-based oil and gas producer operated by CrownQuest Operating.
CrownRock is the largest private equity-backed private oil and gas company in the Permian Basin, with 90,000 operated acres in the core areas of the Midland Basin and recent production of 40,000 barrels of oil equivalent per day.
Jonathan Farber is co-founder and managing director of Lime Rock, which has offices in Connecticut and Houston and has raised $8.6 billion in private equity funds since its 1998 inception. J. McLane is managing director of Lime Rock.
Baker Botts represents Transocean on $750M notes offering
Baker Botts said June 28 it advised Transocean Ltd. on a $750 million senior secured notes offering by unit Transocean Guardian.
The team included partners Gene Oshman and A.J. Ericksen, senior associate Laura Katherine Mann and associates Ieuan List and Emmie Proctor, all of Houston.
Specialists included Dallas partner Luke Weedon, Houston partner Rachael Lichman, Austin senior associate Clint Culpepper and associates David Nimmons in Houston and Jennifer Ybarra in Dallas on finance. Partners Derek Green and Jon Lobb in Houston assisted on tax while Austin partner Aileen Hooks and Houston associate Laura Williams pitched in on environmental matters.
Senior associate general counsel Daniel Ro-Trock handled the offering in-house at Transocean.
Vinson & Elkins represented the initial purchasers with a team that included partners Mark Kelly, David Stone and Mike Telle, counsel Dan Spelkin, senior associate Doug Lionberger and associates Andrew Klein and Maggie Webber.
Specialists included partner Wendy Salinas and senior associate Mary Alexander on tax; partner Tzvi Werzberger, counsel Noelle Alix and associate Carter Olson on finance; and partner John Michael and associate Ben Glass on energy transactions/projects.
The notes are due 2024 and will bear interest at the rate of 5.875 percent per year and be callable after July 15, 2021. They will be guaranteed by Transocean Ltd., Transocean Inc. and units that own the Songa Enabler and Songa Encourage rigs and secured by a lien on those assets and other assets related to them.
The offering is expected to close on or about July 13. Transocean Guardian expects to receive $732.5 million in proceeds, which it will use to refinance existing debt secured by the rigs.
Jones Day aids J.F. Lehman on $662M NRC sale to Hennessy SPAC
Jones Day said June 26 that Dallas partner Alain Dermarkar was the lead lawyer advising longtime client J.F. Lehman & Co. on the sale of interests in NRC Group Holdings LLC to special purpose acquisition company Hennessy Capital Acquisition Corp. III for $662 million.
Blank Rome counseled J.F. Lehman on Jones Act matters and Stifel and Houlihan Lokey Capital were its financial advisers.
The parties expect to close the transaction in the third quarter.
The NRC Group provides environmental, compliance and waste management services globally to 5,000 customers across diverse industries and end markets. It was formed earlier this year by combining National Response Corp., which J.F. Lehman acquired in 2012, and Sprint Energy Services, which it picked up in 2015.
CEO Chris Swinbank is staying on. NRC’s chairman is Alex Harman, a partner at J.F. Lehman.
After the transaction closes, the newly named NRC Group Holdings Corp. will apply to keep listing its common stock and warrants on the New York Stock Exchange. J.F. Lehman affiliates will continue to own a big equity position in the public company.
J.F. Lehman is a middle-market private equity firm focused on the aerospace, defense, maritime, government and environmental sectors.
Gibson, Sidley work on NuStar Energy’s $600M unit sale to EIG, Greehey
Gibson Dunn & Crutcher represented Bank of America as placement agent in NuStar Energy’s sale of units to funds managed by EIG Management and others and William E. Greehey for $600 million.
The team included Houston partner Hillary Holmes, Dallas corporate associate Louis Matthews, Houston finance partner Shalla Prichard, Houston corporate associate Justine Robinson and Houston tax partner James Chenoweth.
Sidley Austin partner George Vlahakos in Houston represented NuStar.
The transaction, announced June 26, involves the $590 million sale of preferred units to EIG and FS/EIG Advisor, which advises the FS Energy & Power Fund, for $25.38 each. It also involves the sale of $10 million worth of common units to Greehey, chairman of NuStar general partner NuStar GP, at $24.17 per unit.
The partnership expects to use the net proceeds to repay debt and fund capital expenditures.
NuStar CEO and president Brad Barron said the financing is a key part of the partnership’s plan to position for long-term financial strength and sustainable growth. He said the offering, plus NuStar’s planned sale of $200 million to $400 million in non-core assets, will allow it to reduce debt, strengthen its balance sheet and liquidity and fund its capital programs this year and next.
NuStar Energy and NuStar GP previously agreed to merge to create a single partnership with an enterprise value of $7.9 billion.
V&E aids Goldman renewable energy fund on $350M Marina purchase
Vinson & Elkins advised Goldman Sachs’ renewable energy fund on its acquisition of solar assets from Marina Energy, a unit of South Jersey Industries, for $350 million in cash.
The deal, which was announced June 28, includes 76 distributed solar energy projects with capacity of 204 megawatts at 143 sites in New Jersey, Maryland, Massachusetts and Vermont. They provide power to schools, hospitals and commercial and industrial facilities.
The V&E corporate team members in Texas included partners Kaam Sahely and Peter Marshall. They had assistance from senior associates Luke Edney and associates Claire Smyser Campbell, Bassam Chain, Cesar Leyva, Caroline Kuehn, Mike LeFevre, Michael Zarcaro, Jeremy Tripp, Ben Glass, Jack Moxon, Josh Rocha, Edward Vaunder, Caroline McDonald and Jackson Gayle.
Also advising were counsel Debra Duncan, partner Randy Jurgensmeyer and associate Victoria Short.
Guggenheim Securities and lawyers from Akin, Gump, Strauss, Hauer & Feld in Washington, D.C. and California advised South Jersey Industries.
V&E said it regularly represents the Goldman fund on acquisitions. It also represented Global Atlantic Financial Group on its $1.175 billion acquisition of a 33 percent interest in the solar portfolio of Southern Power.
The agreement called for South Jersey Industries to receive $63 million of the purchase price within the next week and the balance over the next several months as individual projects in the portfolio satisfy closing conditions, which is expected by Dec. 31.
South Jersey Industries said it might use the proceeds to repay debt and reduce share issuance under its forward equity agreement as it continues to reshape its business.
Analysts at Williams Capital Group said the solar asset sale should reduce the company’s equity forward draw to the $100 million to $150 million level, reducing the equity dilution previously expected.
DLA Piper advises Oasis Petroleum on $283M asset sale
DLA Piper advised Oasis Petroleum on the sale of oil and gas properties in the Rockies’ Bakken formation to unnamed buyers for $283 million.
Houston partner Jack Langlois and associate Jibin Luke led the deal team.
Oasis managing counsel Natara Williams led the in-house effort with help from counsel Davis Zapffe, general counsel Niko Lorentzatos said.
Lorentzatos has been in the position since 2010. He previously was senior counsel at Targa Resources and counsel and senior counsel at Burlington Resources. The University of Houston-trained lawyer also was an associate at what was then known as Bracewell & Patterson.
Oasis reached two agreements to sell 65,000 net acres in non-core assets, which include Foreman Butte and certain non-operated acreage.
Analysts at Tudor, Pickering, Holt said the divestitures account for more than half of Oasis’ planned $500 million divestiture target, which they think could include properties in the Red Bank and Montana areas. The proceeds will be used to pay down debt and to fund the company’s acquisition of Forge Energy last year.
Raymond James analyst John Freeman said the sale came in modestly above expectations and puts Oasis in a good position to meet its disposal goal.
V&E, Hunton AK aid on Sabine $144M natural gas asset sale to Osaka
Vinson & Elkins said June 29 it advised Oaska Gas USA Co. unit OG East Texas on its purchase of a 30 percent working interest in natural gas properties in East Texas’ Haynesville Shale from Sabine Oil & Gas Corp. and unit Sabine East Texas Basin for $144 million.
The V&E corporate team was led by partners John B. Connally and Shay Kuperman with senior associate Luke Edney and associate Josh Rocha.
Specialists included partner Sean Becker (labor/employment); partner Todd Way, senior associate Julia Pashin and associate Megan James (tax); counsel Brad Foxman (restructuring); partner Billy Vigdor (antitrust); and partner Larry Nettles (environmental).
Hunton Andrews Kurth partner Ashley Muehlberger in Houston advised Houston-based Sabine, which emerged from bankruptcy in 2016. Other HuntonAK members working on the sale were partners Parker Lee, Lisa Shelton and Tony Eppert, associate Ming Lei and a lawyer in the firm’s Washington, D.C. office.
Sabine assistant general counsel Jeffrey Lawson and Tom Owen were Sabine’s in-house legal team.
Sabine and Osaka plan to jointly develop the acreage, which is in Harrison and Panola Counties, Texas. Osaka already is a buyer of liquefied natural gas from Texas and a 10 percent owner of the Freeport LNG export facility.
Lennox sells Australian industrial site to unnamed buyer
Air conditioning, heating and refrigeration giant Lennox International sold an Australian industrial site to an unnamed buyer as part of its plan to focus on North America and Europe.
Terms weren’t disclosed. Jones Day said June 25 it counseled Lennox with attorneys in Australia.
Lennox’ chief legal officer is John Torres, who has served in that post since 2008. He previously was general counsel at Freescale Semiconductor, which was originally part of Motorola, where he worked as senior counsel and general counsel for the semiconductor business.
Before Motorola, the University of Chicago-trained lawyer spent 13 years in private practice in Phoenix specializing in commercial law.
Jones Day counsels acquirer of minority stake in Mobility Experience
Jones Day partner Alain Dermarkar worked on another deal recently, advising the undisclosed Swiss acquirer of a minority stake in Dallas-based ride-sharing business Mobility Experience Corp.
The deal closed June 1, Jones Day said in a June 26 release.
Jones Day advises Quest Software on Metalogix acquisition
Jones Day announced its involvement in another deal this week, Quest Software’s acquisition of Metalogix for an undisclosed sum.
Partner Michael Considine led the deal team advising Quest. Lawyers at Fried Frank Harris Shriver & Jacobson in New York counseled the target.
Detroit-based Metalogix provides migration, management and security solutions for Microsoft SharePoint and Office 365. It’s led by CEO Trevor Hellebuyck, who has been at the company since 2010 after stints at BlueThreat Technologies and NuSoft Solutions.
Quest announced the deal June 29, saying it extends its commitment to helping organizations maximize the value of their Microsoft investments.
Quest is a global systems management and security software provider led by chairman and CEO Jeff Hawn. The company previously was part of Dell Software, which Dell Inc. sold to Francisco Partners and Elliott Management in 2016 for undisclosed terms.
NOV signs JV with Saudi Aramco to make land rigs, equipment in the kingdom
National Oilwell Varco Inc., known as NOV, said June 28 it signed an agreement with Saudi Aramco to form a joint venture to make high-spec land rigs and equipment in the kingdom.
The companies also agreed to set up an education center to train Saudi technicians in the maintenance and operation of sophisticated drilling technology.
The joint venture will be supported by a commitment from the previously announced Saudi Aramco Nabors Drilling Co. alliance that will purchase 50 onshore drilling rigs from the entity over 10 years.
NOV’s general counsel is Craig Weinstock, who joined the company in 2014 after a 29-year career at Locke Lord in Houston. Before that, the Vanderbilt-trained lawyer clerked for the Hon. Robert Parker, judge for the U.S. District Court in East Texas who went on to the Fifth Circuit and is now retired.
McGuireWoods aids Macquarie on 200-megawatt wind farm project
McGuireWoods said the firm represented Macquarie Capital in the development, tax equity financing and debt financing of a 200 megawatt wind farm project called Canadian Breaks in north Texas.
Partner Becky Diffen in the firm’s Austin office led the deal team.
Other McGuireWoods attorneys in Texas who worked on the deal were Houston partner Durham McCormick (tax and employee Benefits); Houston partners Jay Hughes and Matt Kapinos (M&A, energy and private equity transactions); and associate Hayden Harms.
Macquarie also announced the launch of its Green Investment Group in North America in conjunction with Canadian Breaks’ financial close. It already has such a group in Europe, which has invested $20 billion in green energy projects since 2010.
The $400,000 Canadian Breaks wind farm is the first U.S. greenfield wind project Macquarie has developed from inception. Macquarie also established a partnership with a solar development team called Candela Renewables.
Macquarie has a large infrastructure, utilities and renewables group in Austin. Earlier this month it appointed a new global head of energy technology, former Tesla development director Greg Callman, to drive opportunities in battery storage and distributed technology.
Macquarie said it believes that the renewables sector in North America is set for a prolonged growth period as falling technology costs combined with growing demand from corporations and utilities drive increasing deployment.