(Aug 7) – The deal spigot was turned on full blast this past week, with 16 transactions announced worth $68.6 billion – a weekly record this year for The Texas Lawbook‘s Corporate Deal Tracker. Eleven law firms and 106 lawyers in Texas were involved.
Thanks for such a belt-busting week should be given to Energy Transfer Equity’s $62 billion purchase of affiliate Energy Transfer Partners, which involved 19 lawyers at Vinson & Elkins and Latham & Watkins.
But there were also three other transactions valued at more than $1 billion each and seven middle-market transactions worth between $100 million and $615 million that boosted the total.
M&A deals made up the bulk of the activity, involving 10 law firms and 71 Texas lawyers on 13 deals worth $67.259 billion. There also was an $815 million midstream deal that was canceled.
On the capital markets side, there were three transactions amounting to $1.34 billion that involved four law firms and 35 Texas lawyers.
Industries making a showing this past week were energy, of course, along with financial services, software and restaurants.
V&E, Latham advise on Energy Transfer Equity’s $62B purchase of affiliate
As The Texas Lawbook reported last week, Dallas-based Energy Transfer Equity announced plans to acquire affiliate Energy Transfer Partners for $62 billion: $27 billion in stock and $35 billion in debt assumption.
The merger will create a $90 billion energy infrastructure giant.
Energy Transfer Equity currently owns the general partner of Energy Transfer Partners.
The deal is expected to close in the fourth quarter if it clears a majority of the unaffiliated unit-holders of Energy Transfer Partners.
The transaction is similar to what Kinder Morgan did in 2014 when it hoovered up its various master limited partnerships for $70 billion, creating a $140 billion company. That prompted further combinations among related entities in the midstream industry.
Vinson & Elkins counseled Energy Transfer Partners on the transaction. Partners Lande Spottswood and Steve Gill and senior associate Brittany Sakowitz led the team with assistance from associates Yong Eoh, Burke Wendt and David Lassetter.
Partner Ryan Carney provided tax advice with help from associate Christine Mainguy and a partner in the firm’s Washington, D.C. office.
Latham & Watkins represented Energy Transfer Equity on the merger. Houston partners Bill Finnegan and Debbie Yee and associates Kevin Richardson, Thomas Verity and Daniel Harrist led the group.
Specialists included Houston partner Tim Fenn and associate Bryant Lee on tax matters along with a partner in the firm’s Los Angeles office: and Houston partner Craig Kornreich with counsel Pamela Kellet on finance.
Energy Transfer Equity’s conflicts committee used financial advisor Citi (Michael Jamieson, Claudio Sauer and Jason Miner) and legal advisor Potter Anderson & Corroon.
Energy Transfer Partners’ conflicts committee tapped Barclays as its financial advisor (Keith Burba and Jeremy Michael) and Richards Layton & Finger as its legal counsel.
Tom Mason is the general counsel of Energy Transfer Equity. The University of Texas law graduate previously was a partner at V&E. Jim Wright is the general counsel of Energy Transfer Partners. The South Texas College of Law graduate previously was associate general counsel of Enterprise Products and senior counsel at El Paso Corp.
Analysts at Tudor, Pickering, Holt said the transaction was long awaited and will streamline the partnerships’ structure and alleviate overhang. But they noted that the offer of 1.28 of a unit of Energy Transfer Equity for each Energy Transfer Partners unit represents only a “modest” 11 percent premium.
Genstar sells Accruent to Fortive for $2B
San Francisco private equity firm Genstar Capital said July 31 it sold Austin-based Accruent to Fortive Corp. for $2 billion.
Accruent used Lazard as financial advisor and Irell & Manella in Los Angeles as its legal counsel. Jamie Ryan, corporate counsel at Accruent in Austin, also worked on the deal.
Ryan previously was an associate at Winstead in Austin and Orrick, Herrington & Sutcliffe in Los Angeles. He earned his law degree from Harvard.
Founded in 1995 by founder and chairman Mark Friedman, Accruent claims to be the world’s top provider of software to manage real estate, facilities and physical assets, a market that’s grown to more than $7 billion.
The company has 10,000 customers and 1,100 employees and 20 percent of its sales come from global markets with a business partner network in 150 countries.
Accruent CEO John Borgerding said in a statement that the company has doubled in revenue, acquired nine companies and expanded internationally under Genstar’s ownership.
Thirty-year-old Genstar focuses on investments in software, industrial technology, healthcare and financial services. It has $10 billion worth of assets under management. Managing director Eli Weiss led the Accruent investment from Genstar.
V&E, STB, Gibson aid on KKR’s Discovery Midstream purchase for $1.173B
As The Lawbook also reported last week, KKR and Williams Cos. agreed to buy Dallas natural gas gathering and processing provider Discovery Midstream from TPG Growth for $1.173 billion.
Vinson & Elkins advised TPG Growth, the middle market and growth equity platform of alternative asset firm TPG. The corporate team was led by partners Keith Fullenweider and John Grand and associate Robert Hughes.
Simpson Thacher & Bartlett partner Breen Haire and associate Jacqui Bogucki in Houston counseled KKR.
A partner in Gibson Dunn’s Denver office led the deal for Williams but Houston and Denver associate Melissa Persons and Houston associate Danny Nordstrom were part of the team.
Williams’ in-house team included assistant general counsel John Gammie and senior attorney Jessie Pierre-Jack, both in Tulsa.
Jefferies provided financial advice to TPG Growth on the sale. Christopher Ortega led the investment from TPG out of New York.
Williams and KKR used Simmons managing director Spencer Rippstein in Houston as their financial advisor.
The parties expect the transaction to close in the third quarter. KKR will own 60 percent of Discovery Midstream while Williams will hold the rest. Williams agreed to provide additional capital when needed to bring its stake to 50 percent.
Bracewell advises Harvest Midstream on $1.125B acquisition from Williams Partners
The Lawbook also reported that Hilcorp Energy-backed Harvest Midstream Co. of Houston agreed to buy assets in the Four Corners area of New Mexico and Colorado from Williams Cos. affiliate Williams Partners for $1.125 billion.
Bracewell partners Cle Dade and associate Lytch Gutmann in Houston advised Harvest Midstream. Davis Polk & Wardwell was Williams’ legal advisor and Morgan Stanley was its financial advisor.
Other attorneys working on the deal were partners Rebecca L. Baker, Mark D. Holmes, Aaron P. Roffwarg, Scott C. Sanders, Dale D. Smith, Tony L. Visage and Timothy A. Wilkins, counsel Tamara L. McKenzie and associates John L. Stavinoha III and Hobie Temple. Lawyers in the firm’s New York and Washington offices assisted.
Hilcorp lawyers involved in transaction were general counsel Michael Fertitta, deputy general counsel Spencer Kerr and senior legal counsel Chris Miller.
Davis Polk & Wardwell was Williams Partners’ legal advisor and Morgan Stanley was its financial advisor.
Williams Partners’ parent Williams Cos. aims to close the deal in the second half of the year after it completes its already announced acquisition of what it doesn’t already own of Williams Partners.
Discovery was founded in 2015 by Steven Meisel and Drew Chambers, former executives at Highstar Capital-owned Wildcat Midstream, and was purchased by TPG Growth last year.
The Four Corners acquisition included 3,700 miles of pipeline, two gas processing plants and one carbon-dioxide treating facility. The assets generated $85 million in Ebitda last year and are forecast to be $82 million this year.
Williams Cos. CEO Alan Armstrong said in a statement that pressure on natural gas prices from adjacent basins like the Permian demands consolidating and integrating production with infrastructure to optimize throughput and lower costs. The company plans to redeploy the proceeds into better growth opportunities.
V&E advises KKR-backed Focus Financial on $615M IPO
Vinson & Elkins also handled a financial services deal this past week, advising KKR-backed Focus Financial Partners Inc. on its initial public offering of Class A common shares for $615 million. The offering closed July 30.
The corporate team was led by lawyers in the firm’s New York office.
The Texas attorneys involved were partners David Peck and Lina Dimachkieh and associates Allyson Seger and Neil Clausen on tax; partner David D’Alessandro, counsel Regina Ibarra, senior associates Melissa Spohn and Dario Mendoza and associate Gina Hancock on executive compensation/benefits; and senior associate Sarah Fortt on corporate.
Davis Polk & Wardwell represented the underwriters, which were led by joint book-running managers Goldman Sachs, BofA Merrill Lynch, KKR Capital Markets, BMO Capital Markets, RBC Capital Markets and SunTrust Robinson Humphrey. Fifth Third Securities, Stifel unit Keefe Bruyette & Woods, MUFG, Raymond James, Regions Securities and William Blair were co-managers.
Simpson Thacher & Bartlett counseled KKR with an attorney out of its New York office.
Focus said the underwriters exercised their option to purchase 2.4 million shares of its stock at $33 per share less underwriting discounts and commissions, or 18.6 million in total.
The company expected to receive $615.4 million in gross proceeds, which it intends to use to redeem outstanding limited liability company units in Focus Financial Partners LLC from holders and contribute the rest to Focus LLC in exchange for Focus LLC units. Focus LLC will use the proceeds to reduce debt under its credit facilities and for acquisitions and general corporate business purposes.
Focus is a partnership of independent fiduciary wealth management firms.
Stone Point Capital and KKR bought a majority interest in Focus last year from an investor group including Centerbridge Partners, Summit Partners and Polaris Partners for around $17 per share, valuing the company at $2 billion. V&E counseled Focus on that deal as well.
HuntonAK, Latham advise on Energy Transfer’s $445M preferred unit offering
Hunton Andrews Kurth said July 30 it advised the underwriters on Energy Transfer Equity’s $445 million offering of preferred units. The deal closed July 23.
The team included Mike O’Leary, Jordan Hirsch, Phil Haines, Tom Ford, Robert McNamara, Shemin Proctor, Lisa Shelton, Rob Taylor, Chris Adcock, Brooke Milbauer and Leslie Slaughter.
The underwriters were J.P. Morgan Securities, Merrill Lynch, Pierce, Fenner & Smith, Morgan Stanley, RBC Capital Markets and Wells Fargo.
Energy Transfer Partners tapped Latham & Watkins for legal advice, including partners Debbie Yee and Bill Finnegan and associates Kevin Richardson, Dan Harrist and Bryan Ryan.
The offering included 7.625 percent Series D fixed-to-floating rate cumulative redeemable perpetual preferred units. Energy Transfer Partners intends to use the net proceeds to repay amounts outstanding under its revolving credit facility and for general partnership purposes.
Brinker sells 98 restaurant sites for more than $314.3M
Dallas restaurant operator Brinker International agreed to sell 98 restaurant sites to two separate buyers for $314.3 million as part of lease-back deals, according to Securities and Exchange Commission filings Aug. 1.
The casual restaurant chain is shedding up to 48 sites to Four Corners Property Trust Inc. unit FCPT Acquisitions for $155.7 million and up to 50 to SunTrust Banks unit SunTrust Equity Funding for $158.6 million.
Brinker didn’t respond to requests for its legal counsel. Its general counsel is Scarlett May.
SunTrust is one of the parties to Brinker’s $1 billion revolving line of credit and provides other banking services to the company, Brinker said in a statement.
Led by CEO Wyman Roberts, Brinker owns 1,634 Chili’s and 52 Maggiano’s restaurants.
V&E aids Crestview-backed W Energy on $292.8M asset sale to Northern
Vinson & Elkins said July 31 it advised Crestview Partners-backed W Energy Partners on its sale of oil and gas properties to Northern Oil and Gas for $100 million in cash and $192.8 million worth of stock.
Minneapolis-based Northern Oil & Gas said in a statement that it’s the largest acquisition in its history.
V&E’s corporate team was led by partners Keith Fullenweider, Shay Kuperman and Ramey Layne with assistance from associates Claire Smyser Campbell and Emma Jiang. Also advising were partners Larry Nettles (environmental) and John Lynch (tax).
Faegre Baker Daniels was Northern’s legal advisor. RBC Richardson Barr provided financial advice to W Energy Partners.
The assets produce 6,750 barrels of oil equivalent per day of production and cover 10,600 net acres in the core of the Williston Basin.
Northern said the assets will add $95 million to cash flow in 2019 with a capital plan of $42 million, which translates into a 17 percent free cash flow yield based on the deal’s purchase price.
The company said the acquisition, combined with its Pivotal purchase, will help it generate free cash flow so it can reduce its debt. It expects to exit this year with $100 million of cash on hand.
Northern’s founder and president Mike Reger said the assets fit well with the company’s existing core leasehold and drilling inventory and complement the Pivotal purchase.
The parties expect to close the transaction in two months.
Latham represents underwriters on $281M Viper offering
Latham & Watkins said Aug. 3 it counseled the underwriters on the $281 million public offering by Midland-based Viper Energy Partners LP, a unit of oil and gas explorer Diamondback Energy.
Houston partners Michael Chambers and David Miller led the offering. The underwriters included UBS Securities and Credit Suisse.
Akin Gump Strauss Hauer & Feld partner Seth Molay counseled Viper Energy Partners LP. His team included tax partner Alison Chen, senior counsel Irina Maistrenko and Alex Reuss and associates Chase Armbrust, Michelle Moreland and Cabell Massey.
The offering involved 9 million units at $31.25 per unt.
Viper Enegy Partners LP intends to use the net proceeds to purchase units of Viper Energy Partners LLC, which will use its net proceeds to repay some of the outstanding borrowings under Viper Energy Partners LP’s revolving credit facility.
ConocoPhillips sells Barnett assets to Lime Rock Partners for $230M
ConocoPhillips said Aug. 2 it agreed to sell its interests in the Barnett shale play to Lime Rock Resources for $230 million plus net customary adjustments. The parties expect to close the transaction by year-end.
ConocoPhillips handled the asset sale in-house, including senior counsel Katharine Newman and managing counsel John Granmayeh.
Lime Rock used inhouse counsel Debra Sandefer, who is senior counsel of acquisitions and divestitures in Houston. Foley partner Jerry DeVault, who has since retired from the firm, assisted.
ConocoPhillips plans to use the proceeds for general corporate purposes.
The assets produced an average of 9,000 barrels of oil equivalent per day for the first half of the year, with about 55 percent natural gas and 45 percent natural gas liquids.
RealPage acquires marketing tools firm Leaselab for $103M
Richardson apartment software and services provider RealPage agreed to buy LeaseLabs for $103 million in cash and stock and another $14 million if certain financial objectives are met.
RealPage handled the deal inhouse with a team led by chief legal officer David Monk. Monk won an Outstanding Corporate Counsel Award from the Association of Corporate Counsel’s DFW Chapter and The Lawbook earlier this year.
Monk’s team members included deputy general counsel Cori Ulrich, corporate counsel Paul Beck and associate general counsel Joe Wagner and Lori Finkelston.
LeaseLabs used Holland & Knight attorneys in the firm’s Tysons, Virginia, office.
San Francisco-based LeaseLabs provides digital marketing services and software to about 800,000 apartments.
RealPage COO Ashley Glover said in a statement that the acquisition and launch of its Go Direct Marketing Suite will help company address the emerging change in spending patterns as clients shift marketing spending away from indirect lead sources and build long-term equity value in their brands.
RealPage has been acquisitive over the past several years, paying $218 million for ClickPay; $250 million for On-Site Manager; $70 million for American Utility Management; $300 million for Lease Rent Options; and $75 million for Axiometrics.
The company now has 12,400 clients in North America, Europe and Asia. It earned $8.5 million on sales of $216.3 million in the second quarter, a 36 percent increase in profits and a 34 percent boost in revenue over the same period last year.
RealPage chairman and CEO Steve Winn said development initiatives and acquisitions should help it reach its 2020 sales goal of $1 billion.
Doherty & Doherty aids Pedevco on $21.35M purchase from Hunter Oil
Doherty & Doherty partner Casey Doherty in Houston counseled Pedevco Corp. unit Pacific Energy Development Corp. on its purchase of almost all of the oil and gas assets of Hunter Oil Corp. for $21.35 million.
An attorney in Vancouver, British Columbia, assisted Hunter, which announced the sale Aug. 1.
The purchase price represents gross proceeds of $1.63 per share based on 13 million shares outstanding, Hunter said. Hunter intends to distribute the available portion of the purchase price after payment of liabilities and obligations to its shareholders, or about $1.25 per share.
Hunter said the transaction provides shareholders with a large premium over the present market valuation in cash and avoids the dilution associated with raising the $20 million to $30 million management estimated would be needed to do initial field development on the properties.
The transaction is structured as a sale of assets of Hunter’s holding companies, Milnesand Minerals Inc. and Chaveroo Minerals Inc., and a sale of shares of the company’s operating companies Ridgeway Arizona Oil Corp. and EOR Operating Co.
The parties expect to close the deal August 31 if it clears shareholders, including two-thirds of the votes cast at the meeting. Certain directors and shareholders of the company who own 68% of the outstanding shares have agreed to vote their shares in favor of the transaction.
Baker Botts aids First Reserve’s TNT Crane on Allison purchase
Baker Botts said Aug. 2 it counseled First Reserve-backed TNT Crane & Rigging Inc. on its purchase of Allison Crane & Rigging for an undisclosed sum.
The team included corporate partners Edward Rhyne and Natasha Khan and associates Katie Belleville, Emmie Proctor and Mitch Athey. Helping on tax were partner Bobby Phillpott and associate Ryan Phelps.
Simpson Thacher attorneys in New York and Palo Alto, California, counseled TNT Crane on financing.
Morgan, Lewis & Bockius represented Allison Crane, including lawyers in Philadelphia and New York.
TNT Crane & Rigging is one of the country’s top lifting services providers. Allison provides mobile cranes primarily in the Utica and Marcellus shale basins from its branch in Williamsport, Pennsylvania, and the Permian basin from its branch in Pecos, Texas.
Cirro Acquires Customers from Two Electricity Competitors
Cirro Energy, the retail electricity provider owned by NRG Energy, recently acquired the customers of competitors Pioneer Energy of Sugar Land and Stat Energy of Richardson for an undisclosed sum.
Cirro’s counsel couldn’t be determined by press time. NRG Retail’s general counsel is Meigs Jones, who is based in Austin. He previously was associate general counsel of Green Mountain Energy Co., which NRG acquired in 2010 for $350 million.
Before Green Mountain, the University of Kansas-trained attorney worked in the legal departments of Cerner Corp., Cirrus Logic, Vectris, Bernstein-Rein Advertising and Sprint.
Cirro didn’t disclose how many customers it acquired in deal but said it will honor the contract terms, including the price of energy, through their durations.
NRG is the largest retail electric provider in Texas. It also owns Reliant Energy, Green Mountain Energy and Pennywise Power.
Hunton Andrews Kurth represents Texas Methodist on Heartspring merger
Hunton Andrews Kurth said Aug. 1 it counseled Texas Methodist Foundation on its purchase of Heartspring Methodist Foundation for an undisclosed sum.
The team included partner Jordan Hirsch and associate Amanda Thienpont.
Texas Methodist said in May that both foundations’ boards voted to approve the merger and that the Texas Conference affirmed the combination at its annual meeting.
Founded in 1938, Texas Methodist is the largest United Methodist foundation in the country serving United Methodists across Texas and New Mexico with advice on investments, loans, grants and leadership, strategic discernment, gift planning and endowment services. Heartspring, founded in 1978, serves the eastern part of Texas.
SCSL counsels Absolute Crane on sale to Pfingsten’s Crane 1
Pfingsten Partners-backed Crane 1 Services announced recently it acquired Absolute Crane, a Houston provider of overhead crane services and equipment, for undisclosed terms.
Katten Muchin Rosenman counseled Crane 1 with an attorney out of its Chicago office. Richard Seltzer at Seltzer Chadwick Soefje & Ladik in Houston represented Absolute Crane.
Absolute has been in business for 20 years and expands Crane 1’s market reach into the fourth largest city in the U.S., which has become known as “the crane capital of the world.”
Crane 1 CEO and president Bob Vevoda said in a statement that the acquisition represents the company’s first entrance into the fast growing Texas market and that it plans to aggressively expand through the rest of the state and the Gulf Coast.
Absolute owner Mark Lupo will remain with Crane 1 as division manager of its new Houston office.
UPDATE:
Dallas energy midstream provider Southcross Energy Partners said July 30 it cancelled its $815 million acquisition by Houston-based American Midstream Partners due to the buyer’s failure to fund the deal.
Southcross said its parent, Southcross Holdings, is entitled to receive a $17 million termination fee.
The deal, which was announced this past fall, was expected to close in the second quarter. On June 1 the parties extended the transaction’s outside closing date to June 15.
Gibson Dunn & Crutcher had counseled American Midstream on the merger, including partners Tull Florey and Hillary Holmes in Houston. Locke Lord had represented Southcross, including partners Michelle Earley in Austin and partner Bill Swanstrom in Houston.
Financial advisors had included Deutsche Bank and BofA Merrill Lynch for American Midstream and RBC Capital Markets and Wells Fargo Securities for Southcross Holdings and Southcross Energy. Tudor, Pickering, Holt & Co. advised Southcross Holdings’ special committee and Jefferies aided Southcross Energy’s conflicts committee.
American Midstream said July 27 that its $138.5 million sale of two refined products terminals to DKGP Energy Terminals was facing regulatory approval delays, the proceeds from which was going to be used to pay for Southcross.
American Midstream said its $210 million sale of its marine products terminals to JP Morgan Investment Management should close this month.
Sidley Austin worked on both asset sales with a team led by partner Cliff W. Vrielink in Houston.
American Midstream also said July 27 that it’s identified about $350 million to $400 million of additional noncore assets that could be divested over the next year.
American Midstream successfully acquired JP Energy Partners last year for $2 billion.
Investors expect Southcross to look for other sale opportunities.