The Texas Lawbook

Free Speech, Due Process and Trial by Jury

CDT Roundup: 11 Deals, 12 Firms, 75 Lawyers, $565.1M

In late March at Bird, the Santa Monica-based electric scooter maker, 406 workers were laid off in what can properly be described as Coronavirus Style: They were dumped in a two-minute Zoom conference call.

Followed by Lyft and Carta and Uber and other erstwhile “unicorns,” nearly 45,000 employees of venture capital darlings have lost their jobs since March 11, according to a new VC analysis by PitchBook.

The report (“US Venture Capital During Economic Uncertainty”), describes a venture capital space that looks pretty much like everything else: a defensive, shelter-in-place market with money to invest and too few attractive price points to place it.

For their modeling, PitchBook reached back and retraced what they regard as a similar moment in time: the tail of the Great Recession of 2008 (or, in their description, the Great Financial Collapse). M&A off. Valuations down. IPOs holding scant appeal.

But even before the pandemic hit, VC investments were in decline. The Q2 Angel and Seed deal count was the lowest since 2012, bumping its way downhill since early 2019. But the global effects of the pandemic, coupled with historically low interest rates, likely will further alter the ways in which emerging companies and investors will respond.

Here’s what PitchBook expects:

Deals/Values: During the Great Recession VC exit values decreased dramatically (-82%) and early-stage deals dropped by a third in volume and 45% in value. And although they aren’t projecting a similarly dramatic value collapse, they are expecting deal values to decline well into 2021.

Fundraising: Despite strong fundraising in Q1, a slowdown is likely. A pullback by non-traditional investors, mainly corporate venture capital, will depress what had been a growing trend. In the last two years, for instance, such non-traditional venture capital contributions accounted for two-thirds of all venture capital fundraising. As companies constrain their own spending to reconfigure debt loads, that level of investment cash is unlikely to be available.

Decision-making: In a world of declining market valuations, VC investors may become more selective. In fact, like their PE counterparts, they already were. Since 2008, dry powder fund reserves at VC firms have increased 37%. And according to PitchBook, that represents as much as 3.3 years of deal activity potential.

Moreover, constraints on the normal nature of deal-making, like more limited opportunities for face-to-face meetings, are likely to slow down the process meaning even the mostly appealing deals are likely to be spread over time.

Exit Strategies: M&A is likely to remain the most dominant path of exit, but with lower valuations the broader public appeal of IPOs may become more attractive, not to mention an increased role of debt financing to take advantage of those historically lower interest rates.

Now that we’ve all sobered up, there are 11 deals to report this week, 10 M&A/Funding deals and one capital markets transaction. The total reported value was a miserable $565.1 million with $500 million of that coming from the week’s single capital markets offering. This meant work for 75 lawyers at 11 different firms.

Weekly Corporate Deal Tracker Roundup Stats

A compilation of weekly stats from The Lawbook's CDT Weekly Roundup
(Deal Values in Millions)
Week EndingDeal CountAmountFirmsLawyersM&A CountM&A Value $MCapM CountCapM Value $M
March 25, 202315$8,779.5101415$2,36210$6,416.5
March 18, 20237$14,048.86695$13,3452$703.8
March 11, 202321$11,5761616516$8,1315$3,445
March 4, 202320$9,6681122816$8,2094$1,459
February 25, 202313$5,3351313012$4,2351$1,200
February 18, 202314$5,743.7131588$898.76$4,845
February 11, 202316$12,0881213712$9,9654$2,123
February 4, 202317$8,0661514013$5,6144$2,452
January 28, 20237$2,1807755$1,692.752$488
January 21, 202317$5,7681617412$1,9185$3,850
January 14, 202311$2, 800101028$4213$2,400
January 7, 202318$8,2961116714$6,4613$1,835
December 31, 202214$2,732119912$2,0922$640
December 1714$7,9191311512$7,4191$500
December 10, 202214$10,093128811$7,0933$3,000
December 3, 202226$12,800.91117220$4,1416$8,659.9
November 26, 20228$2,266.7853$765$2,190.7
November 19, 202221$2,8861521219$2,5502$336
November 12, 202213$15,093.79819$14,2004$893.7
November 5, 20222519,337.21650922$8,267.23$11,070
October 29, 202215$7,805.3911614$7,180.31$625
October 22, 202220$8,193.51325313$5,4427$2,751.5
October 15, 20229$3,046.191397$2,588.32$457.8
October 8, 202219$2,011.81211416$833.83$1,178
October 1, 202223$5,532.91615618$4,952.35$580.6
September 24, 202218$5,1941421615$4,0503$1,144
September 17, 202221$8,352.31232015$4,759.66$3,592.7
September 10, 202215$19,853.51012613$19,403.62$450
September 3, 20229$2,3129629$2,31200
August 27, 202216$30,891.71013515$30,666.41227.7
August 20, 202212$1,977815299253$1,052
August 13, 202218$8,004.71124211$2,844.77$5,160
August 6, 202224$7,948.91224017$3,5777$4,371.9
July 30, 20228$6,9419787$6,8391$102
July 23, 202211$801119210$80110
July 16, 202214$3,6501012214$3,65000
July 9, 202210$3,557.77689$3,557.710
July 2, 202218$8,609.41315215$2,754.43$5,855
June 25, 202215$6,142131469$2,0176$4,125
June 18, 202217$11,890.11422815$11,4102479.7
June 11, 202217$7,6001212310$2,3007$5,300
June 4, 202212$2,937101279$6923$2,245
May 28, 20229$3,197.611869$3,197.600
May 21, 202214$7,284.51218511$6,6093$675.5
May 14, 202211$306.698010$306.61$225
May 7, 202216$10,451.751210812$1,8274$8,624.75
April 30, 202216$2,296.51615712$895.54$1,401
April 23, 202210$2,24111588$16412$600
April 16, 202211$6,64371568$2,3593$4,284
April 9, 202217$4,4291418411$1,6906$2,739
April 2, 202213$1,75588410$1,1453$610
March 26, 202211$3,2058656$2005$3,005
March 19, 202213$2,239.17910613$2,239.1700
March 12, 202218$12,0161123915$11,9652$51.35
March 5, 202217$6,7861313713$5,1614$1,625
February 26, 202212$5,09581499$4,437.53$658
February 19, 202217$22,2291717414$21,3543$875
February 12, 202212$2,344.710738$641.74$1,703
February 5, 202211$2,50389911$2,50300
January 29, 202211$3,8721210112$3,87200
January 22, 202213$5,143.5109912$4,842.51$301
January 15, 202212$7,60591559$6,4803$1,025
January 8, 202213$8,256.21110213$8,256.200
January 1, 20229$1,273.86509$1,273.800
December 25, 202121$4,734.751117616$3,4105$1,324.75
December 18, 202126$7,325.21519318$3,640.28$3,685.2
December 11, 202116$5,0171010913$1,4173$3,600
December 4, 202114$2,3108868$2,3106$1,882.05
November 27, 20219$3.460.1101016$1,7583$1,702.6
November 20, 202120$22,7921515712$18,864.58$3,928
November 13, 202121$26,7291217813$11,8228$14,907
November 6, 202112$8,3031315710$6,6823$1,621
October 30, 202121$10,3681521815$9,24.46$1,103.
October 23, 202121$18.783.11522211$12,31410$6,468.6
October 16, 202115$3,8681111815$2,2932$1,575
October 9, 202120$8,6101617516$7,7954$815
October 2, 202114$6,2501113710$5,2004$1,050
September 25, 202111$11,4609937$10,2004$1,250
September 18, 202111$16,6038998$15,0843$1,519
September 11, 202117$10,6531110313$8,5034$2,150
September 4, 202113$7,222108911$6,7152$507
August 28, 202112$76396311$6631$100
August 21, 202112$29,65977911$29,5791$80
August 14, 202122$17,8451119912$12,80510$5,04
August 7, 202117$13,6701213915$11,7662$1,904
July 31, 202121$8,1601113410$3,57410$4,586
July 24,202121$6,3671113915$3,7126$2,655
July 17, 202114$4,0091112412$2,0152$1,994
July 10, 202116$3,9971314311$1,5974$2,4
July 3, 202124$7,492139416$3,7698$3,722
June 26, 202110$4,9957858$3,8472$1,148
June 19, 202128$16,83082289$1,86119$14,968
June 12, 202126$27,2381520919$25,6027$1,636
June 5, 202115$15,5391310013$14,7092$600
May 29, 202135$20,2791114528$18,647$1,639
May 22, 202124$53,2081417417$51,0477$2,161
May 15, 202118$10,6201322011$5,8707$4,809
May 8, 202117$10,4001115615$8,3862$2,500
May 1, 202121$7,2001611512$3,8089$3,392
April 24, 20218$20,2009318$20,20000
April 17, 202114$6,270810211$4,01803$2,260
April 10, 202115$8,9401312914$7,9901$950
April 3, 202118$19,5131015112$16,9236$2,590
March 27, 202127$13,9421524414$4,30013$9,633.5
March 20, 202111$2,04641023$2708$1,776
March 13, 202115$3,27091096$5389$2,732
March 6, 202124$13,6171019613$10,39511$3,222
February 27, 202119$8,1051213915$4,9704$3,135
February 20, 20219$8,82091538$8,5201$300
February 13, 202112$4,852.678172,7665$2,086.6
February 6, 202118$9,7521315314$5,2224$4,530
January 30, 202118$9,449918215$8753.83$695.3
January 23, 202114$8,15081186$4,0008$4,150
January 16, 202117$6,7831313811$2,4006$4,382.9
January 9, 202122$6,8291413518$3,139.34$3,690
January 2, 20217$1,4667607$1,46600
December 26, 202018$15,9001216316$5,3001$600
December 19, 202018$9,7691411014$8,4264$1,343
December 12, 202010$7,20091009$3,3251$3,830
December 5, 202015$4,26191229$2,7806$1,481
November 28, 202019$7,7581011013$4,0036$3,755
November 14, 202014$864.11415712$289.12$575
November 7, 202013$6,33291299$2,483.54$3,849
October 31, 202010$3,995.881036$3,231.14$754.7
October 24, 20206$18,1006585$17,7091$350
October 17, 20208$351.95558$351.900
October 10, 20207$5,2293504$7353$4,494
October 3, 202014$21,42891739$17,5355$3,893
September 26, 202010$12,7708935$10,3005$2,470
September 19, 202014$8,36591016$1,0208$7,345
September 12, 20206$4,4068593$1,2703$3,136
September 5, 202011$5,19181179$4,0612$1,130
August 29, 202011$2,5319945$1,1306$1,401
August 22, 202018$6,574121407$1,93011$4,644
August 15, 202013$4,99110977$1,2166$3,775
August 8, 202012$32,092111129$30,4573$1,635
August 1, 20207$5,2878765$3,6872$1,600
July 25, 20209$18,7516677$18,4032$348
July 18, 20206$1,982.55504$1,407.52$575
July 11, 202011$565.1127510$65.11$500
July 4, 202010$8,8898989$8,7881$100.3
June 27, 20208$6,87410505$4,972.53$2,081.5
June 20, 202012$4,44491157$2,8295$1,615
June 13, 20206$3,5824372$3504$3,232
June 6, 202011$3,213.78657$4704$2,743.7
May 30, 20208$7,3357486$4,6392$2,697
May 23, 20204$432.44343$432.410
May 16, 20206$3106345$31010
May 9, 202018$5,6301612414$3,1804$2,450
May 2, 20201510,40010908$1,9007$,8,500
April 25, 20208$3,4009365$1,0003$2,450
April 18, 202019$9,50014928$185.711$9,360
April 11, 202012$6,0009405$1907$5,800
April 4, 202014$8,200116810$2,2004$6,000
March 28, 202016$6,500139610$3,7006$2,800
March 21, 202011$11,9107337$2,2504$9,960
March 14, 20207809.86346684.81125
March 7, 202016$2,500157013$6693$1,400
February 29, 202013$15,2601312811$11,7602$3,500
February 22, 202012$3,700109210$2,5602$1,130
February 15, 202016$1,250108412$354$1,222
February 8, 202018$6,0801412314$2,5954$3,485
February 1, 202021$20,9001210114$17,8607$3,060
January 25, 202013$7,430136212$6,4301$1,000
January 18, 202023$9,5801512019$6,5804$3,000
January 11, 202021$14,2001819916$1,0205$13,200
January 4, 202022$6,4001111916$3,2046$3,245
December 28, 201922$7,1501917518$6,8004$327.4
December 14, 201924$36,3002316719$9,5005$26,800
December 7, 201911$10,40011557$1,0824$9,370
November 30. 201914$2,4501212612$1,7602$692.5
November 23, 201916$1,995104111$6155$1,380
November 16, 201915$3,8201313511$2,5004$1,271
November 9, 201925$12,9001718223$12,2002$575
November 2, 201910$2,470126192,4503$22
October 26, 201912$5,560147011$3,8601$1,700
October 19, 20198$6,60081388$6,60000
October 12, 201919$4,300145516$3,8003$500
October 5, 201918$14,5001916615$11,1003$3,400
September 28, 201919$8,1001813218$7,5601$550
September 21, 201914$6,300166611$2,1603$4,170
September 14, 201915$23,800125611$21,2504$2,570
September 7, 201917$3,500159814$1,9003$1,600
August 31, 20195$8,7006505$8,70000
August 24, 201916$10,000148215$4,2501$5,750
August 16, 201910$1,6805527$6503$950
August 9, 201917$17,700156814$3,9003$13,800
August 2, 201913$5,7601210813$5,760NANA
July 27, 201911$7,30013768$6,5703$730
July 20, 201913$11,8001312511$5,3002$6,500
July 13, 201910$7757468$542.52$233
July 6, 20197$2,5009857$2,50000
June 29, 201923$8,2901515417$2,3006$5,970
June 22, 201917$10,7001013914$7,7003$3,000
June 15, 201911$13,5001416011$13,500NANA
June 8, 201913$2,870175511$1,5702$1,300
June 1, 201910$4,46011608$4,1402$315
May 25, 201917$4,360147914$3,7003$612
May 18, 201922$9,0001715016$3,4006$5,600
May 11, 201918$19,8001717715$18,3003$1,500
May 4, 201910$7,0756328$6,9002$175
April 27, 201915$3,2001411714$3,1601$40
April 20, 201913$13,50010909$12,2004$1,300
April 13, 201916$38,900149114$37,8002$1,100
April 6, 201912$6,870119410$6,7302$50
March 30, 201915$6,470128410$7,91.55$5,677
March 23, 201918$6,450149114$5,0424$1,408
March 16, 201914$10,1801211511$8,8003$1,300
March 9, 20199$1,8006498$1,3001$500
March 2, 201920$3,0331610714$1,8176$1,262
February 23, 201912$2,0408699$614.63$1,430
February 16, 201916$9,970187716$9,97000
February 9, 201914$6,4001011014$6,40000
February 2, 201918$6,740159916$5,7202$950
January 26, 201913$2,770116711$918.952$1,850
January 19, 201915$3,819167612$2,5943$1,225
January 12, 201918$7,283149215$1,6833$5,600
January 5, 201910$529125010$52900
December 22, 201817$2,570138714$9413$1,629
December 15, 201810$2,8608268$2642$2,600
December 8, 201815$1,819166512$5523$1,267
December 1, 201812$7,50010909$1,2003$6,200
November 28, 201815$4,5001110714$4,0001$500
November 19, 201818$6,137139813$2,1425$3,995
November 14, 201818$9,2001315215$8,5003$694
November 6, 201816$17,3001618314$16,3612$950
October 29, 201814$14,4001812717$13,8001$600
October 24, 201813$6,1401312611$5,1222$1,018
October 17, 201818$18,3901512514$12,2924$6,098
October 10, 201829$3,1491810420$1,6479$819
October 2, 201818$9,300116714$7,3004$2,000
September 25, 201813$7,000117510$6,0003$995
September 18, 20189$3,5707449$3,57000
September 11, 201813$5,9001013213$5,90000
September 7, 201814$5,000158611$4,0003$1,000
August 29, 201815$20,700147913$4,7002$16,000
August 20, 201810$12,40011538$11,3803$1,057
August 14, 201812$19,900121329$18,8893$1,011
August 7, 201816$68,6001110613$67,2593$1,340
July 31, 201815$15,100159511$13,0604$2,060
July 23, 201813$2,130156010$1,8043$1,100
July 17, 201814$5,37017989$4,3105$1,100
July 9, 201816$11,200157410$11,0806$862
July 3, 201813$7,00078112$6,3301$750
June 25, 201815$8,80013979$4,9706$3,930
June 18, 201813$14,20014807$2216$14,290
June 11, 201812$6,3008968$5,9104$803
June 6, 201813$14,50010888$14,1545$579
May 31, 201811$4,89010638$3,2403$1,790
May 22, 201815$20,40011639$19,8086$885
May 15, 201815$4,7001510610$3,9005$643
May 9, 201811$1,40013889$1,3002$560
May 1, 20188$14,2507887$13,4001$450
April 24, 201812$5,30066111$4,4701$800
April 17, 20189$1,80010447$2,3302$1,434
April 11, 201811$2,5008326$1,6905$809
April 3, 201815$13,400111219$12,0206$1,090
March 28, 201810$4,00010927$3,8703$215
March 19, 201817$5,800135110$5907$5,165
March 12, 201815$3,130114311$2,3604$788
March 6, 201819$5,4001311610$1,5309$4,860
February 27, 201820$6,600136914$5,5306$1,030
February 19, 201815$5,5001411110$3,9906$1,980
February 12, 201823$10,9001715712$7,11011$3,840
February 5, 201816$8,600131007$1,3309$7,800
January 30, 201811$12,60011685$7,3006$4,982
January 24, 201819$9,400151295$2,01014$7,337
January 18, 201810$6,2808492$2,1008$4,188
January 9, 201812$16,50012929$15,8903$475
January 3, 201810$2,5009478$2,3502$150
December 27, 201715$9,000151139$7,5686$1,784
December 18, 201715$13,800161649$13,0107$1,118
December 11, 201714$9,7001012612$2,9404$8,500
December 4, 20176$1,8006315$1,5101$300
November 28, 20177$3,8508764$3,2603$285
November 16, 201710$2,70010486$1,8404$856
November 8, 201715$2,380179110$1,8605$516
November 1, 201712$4,70017949$3,4004$1,300
October 23, 201715$10,500106710$9,7804$1,530
October 18, 20176$2,000373$2253$1,820
October 10, 201712$6,5701009$3,8803$3,360
October 2, 20178$3,10011193$1,6305$1,750
September 25, 20178$4,8808795$2,6605$2,070
September 18, 20179$4,7703$3006$4,470
September 12, 201711$4,4308$2,0303$2,400
September 1, 20174$1,3103$3171$1,000
August 23, 201711$13,64098$11,8403$1,800

While the deal count was almost the same, the values were far lower than last week’s $8.9 billion. But maybe it’ll make you feel better to know that this time last year there were also only 10 deals for $775 million.

Perhaps consistency is the hobgoblin of little deals.

M&A/PARTNERSHIPS/FUNDING

Baker Botts Advise on Colonial Acquisition of Refined Products Terminals

A subsidiary of Colonial Enterprises announced that it has agreed to purchase three refined product terminals from Lincoln Terminal Company. The July 1 announcement did not include terms of the deal.

Baker Botts represented Colonial led by corporate partners John Kaercher of Austin and Mike Bengtson of New York. The team also included Dallas partner Eric Windwood on executive compensation and benefits, tax partner Jon Lobb of Houston, partner Paulina Williams of Austin on environmental issues and global projects special Pat Matthews of Dallas.

Bank of America is financial advisor to Lincoln.

The terminals are located Charlotte, North Carolina, Chattanooga, Tennessee and Fredericksburg, Virginia. Two are already connected to Colonial pipelines.

The acquisition marks an entry by Colonial into the terminal business.

Colonial Pipeline Company, founded in 1962, connects refineries ­– primarily located in the Gulf Coast ­– with customers and markets throughout the Southern and Eastern United States through a pipeline system that spans more than 5,500 miles.

Headquartered in Alpharetta, Georgia, the company operates a network of pipelines that stretch from Texas to New Jersey, delivering refined petroleum products such as gasoline, diesel, jet fuel, home heating oil, and fuel for the U.S. military.

Colonial is privately owned by five companies: CDPQ Colonial Partners; IFM Colonial Pipeline 2; KKR-Keats Pipeline Investors; Koch Capital Investments and Shell Midstream Operating. Before joining Colonial in 2017, president and CEO Joe Blount was CEO and co-founder of Houston-based Century Midstream. General Counsel is University of Pittsburg Law School grad David Gray.

Located in Greenville, South Carolina, Lincoln Terminal Company provides terminal services in the Southeast and Mid-Atlantic region for gasoline, diesel, biodiesel and ethanol products. They operate 27 biodiesel blending sites; 4 full-service petroleum terminals; and 3 terminal transload sites.

Willkie Advises on Carnelian-backed Energy Startup Hawthorne Energy

Though it may seem to some an inopportune time to crank up an energy company, Carnelian Energy Capital Management announced June 30 that it is funding startup Hawthorne Energy, a new Austin-based oil and gas investment platform by John Oberg and Marc Shatzer.

Michael De Voe Piazza, a partner in the Houston office of Willkie Farr & Gallagher advised Oberg and Shatzer on the transaction for which no terms were announced.

Hawthorne Energy is an oil and gas company focused on opportunistic acquisitions in select onshore basins in North America. Houston-based Carnelian Energy said the commitment was made through its Carnelian Energy Capital III fund.

Oberg, most recently a partner in Standard Asset Management, will be the CEO of Hawthorne. Shatzer comes to Hawthorne as senior reservoir engineer at Austin-based Three Rivers Operating Co. Oberg and Shatzer met at Three Rivers where Oberg was VP of business development.

“We have known John and Marc for a number of years and have been impressed with their multi-disciplinary expertise and accomplished track record,” said Preston Powell, a Carnelian Managing Director.  “We are eager to start growing Hawthorne with them during this compelling time in the market.”

Jeffrey Gilbert, a former associate at Bracewell, is COO and general counsel for Carnelian and a former legislative reporter for the Houston Chronicle. He received his training, first as a journalist and later as a lawyer, at the University of Texas.

Align Midstream, Sabine Gas Form J/V for TOPS

With the completion of its 30-mile TOPS pipeline, a gas-gathering facility near Carthage, Align Midstream Partners II announced that it has formed a joint/venture with Sabine Gas & Oil, a subsidiary of Osaka Gas USA.

The announcement did not include terms of the transaction, only that it was the first for Sabine since its acquisition by Osaka for $610 million in July 2019.

Tailwater-backed Align Midstream was represented by Porter Hedges with a team led by partner Kevin Poli. He was assisted by energy partner Ben Rajabi, tax partner Geoff Schultz and Aaron Brown.

Latham & Watkins advised Sabine Oil & Gas in the transaction with a Houston-based team led by partners Justin Stolte and Lauren Anderson, with associates Greg Sorensen, Ashley Nguyen and Anthony Tan. Advice was also provided on tax matters by Houston partner Jim Cole, with associate Jared Grimley.

Align Midstream Partners II focuses on servicing producers’ needs in East Texas with gathering, processing and treating assets across the Haynesville and Cotton Valley formations.

Houston-based Sabine Oil & Gas Corporation is a Houston, Texas based oil & natural gas company engaged in the acquisition, development, exploitation and exploration of oil and natural gas properties in the onshore United States.

The CEO of Align, Fritz Brinkman, said the move made long-term sense for both parties. “The TOPS Pipeline will bolster our existing East Texas footprint and enhance our ability to serve the growing Haynesville production, providing our customers with greater access to a number of attractive markets across the Carthage hub.”

Doug Krenek, CEO of Sabine, echoed that sentiment. “The TOPS investment is another step in vertically integrating Sabine and advancing our strategy of capturing value from the well head to the burner tip for our East Texas assets.”

Tailwater Capital is an energy private equity firm co-founded by Jason Downie and Edward Herring. It currently manages more than $3.7 billion in committed capital.

Providence Strategic Growth Acquires Majority Stake in Jobcase

Jobcase announced July 9 that Providence Strategic Growth has acquired a majority stake in the Massachusetts-based social platform. The purchase includes a $30 million capital investment and a new working partnership with the Workday Software Partner Program.

The investment provides funds for the exit of shareholder Link Ventures in favor of PSG, Workday Ventures and continuing investor Savano Capital Partners

Jobcase was advised on the transaction led by a Boston-based team from Weil, but the team included Dallas-based private equity partner Richard Frye.

The investment is intended to further development of key products on the platform, which characterizes itself as “dedicated to empowering and advocating for workers.” The company’s tools and products recently added are virtual hiring events and unemployment resources.

PSG is a private equity fund located in Providence, Rhode Island. Workday Ventures is a $250 million fund launched in February 2018 by Workday, Inc. founded by David Duffield, the former CEO of PeopleSoft following its hostile takeover by Oracle.

V&E Advise on Internalization of Global Medical REIT

Global Medical REIT announced July 9 that it had internalized its management functions through the purchase of its own management company for $17.6 million in cash.

Global Medical, a net-lease real estate investment trust said it had purchased Inter-American Group Holdings Inc., thereby internalizing the functions of Inter-American Management LLC. The deal was overseen by a special committee that included “independent and disinterested” members of the company’s board of directors.

Vinson & Elkins advised Global Medical with a team led out of Richmond by partner Daniel LeBey.

Stifel acted as financial advisor to the special committee and Saul Ewing Arnstein & Lehr as its legal advisor. BTIG was financial advisor to the manager, IAGH, with King & Spalding as legal advisor.

IAGH was owned 85% by Zensun Enterprises Ltd. and $15% by Jeffrey Busch, CEO of Global Medical REIT. Zensun Enterprises is a Hong Kong-based real estate development company headed by Zhang Jingguo who, according to the Global Medical website is the company’s board chairman ex officio.

In December V&E advised Global Medical on the pricing of a $78 million public offering.

TK Pro Bono Team Advises SPCA Texas on Ellis County Acquisition

Thompson & Knight assisted nonprofit SPCA of Texas with its acquisition of the assets of the Ellis County SPCA.

SPCA of Texas, the leading animal welfare organization in North Texas, acquired the Ellis County SPCA property (including its animal shelter and related assets) and assumed responsibilities for the provision of animal sheltering services, including returns to owner and adoptions, caring for 1,500 loose and stray animals in Ellis County each year.

The Dallas-based TK pro bono team included associates Angela Herrington, Lindsay Kirton, and John Phair, and partner Amy R. Curtis.

Four Firms Advise on Rosehill Resources Restructuring Agreement

Rosehill Resources announced July 2 that it has reached a restructuring support agreement with its creditors and will file bankruptcy by July 15.

The creditors include the company’s major shareholder, Tema Oil and Gas, as well as first lien lenders to its credit facility and holders of Rosehill’s second lien notes. The agreement includes a $17.5 million DIP loan, described as a junior convertible delayed draw facility.

Gibson Dunn advised Rosehill in the transaction, led from New York by the firm’s co-chair of restructuring David Feldman and partner Matthew Kelsey.

Bracewell and White & Case represented JPMorgan Chase, agents for the revolving credit lenders: Bracewell’s Houston credit partner Jason Cohen and Houston banking partner Mark D. Holmes for White & Case.

The Houston office of Kirkland & Ellis represent EIG Management, agent for the secured noteholders. The Kirkland team is headed by partners Chad Husnick, Mary Kogut Brawley and Christopher Koenig.

The prepackaged bankruptcy will include Rosehill Resources, Rosehill Operating and their subsidiary companies. The company said it expects to emerge from bankruptcy within 75 days of filing, after which equity in the company will be held by lenders and existing stockholders with the claims of unsecured creditors either unimpaired or paid in full. And because the company will be so closely held, it intends to remove itself from its current listing on NASDAQ.

Rosehill CEO David French said that because of the agreement, the company expects to move through bankruptcy with minimal impact on operations.

“We believe that the restructuring will result in a significantly deleveraged company that will provide us with the liquidity to more effectively navigate the macro oil and gas environment,” French said.

Kirkland, Thompson & Knight Advise on Alchemist, Vortus Partnership

Dallas-based Alchemist Energy announced July 6 that it had aligned itself in a partnership with Vortus Investment Advisors, a private equity group headquartered in Fort Worth.

Alchemist intends to focus on forward looking operational expertise and well-structured capital funding more in tune with the current oil and gas market. No terms were disclosed.

Kirkland & Ellis advised Vortus with a Houston-based team led by corporate partners Jhett Nelson and Shubi Arora, assisted by corporate associates Erik Shoemaker, Dustin Davis and Meghan Dupre. Partner Mark Dundon handled tax advice; Partner Stephen Jacobson, compensation.

Thompson & Knight advised Alchemist with a team led by Dallas corporate and securities partners Jesse E. Betts and J. Holt Foster, III and associate Courtney Jamison Roane. The team also included tax partner Brandon L. Bloom, tax associate Jessica L. Kirk, employee benefits partner Jason Patrick Loden, and labor and employment partner Anthony J. Campiti.

Alchemist is led by Morgan Hinchcliffe and Scott Nelson, both oil patch veterans with Pioneer Natural Resources in the Permian and Eagle Ford. More recently, they developed horizontal wells for small private operators in the Midland and Delaware Basins.

Vortus focuses on investments in successful small and middle market operators.

Said Nelson, “We believe this strategy will help preserve asset values in the short-term and increase values through development once commodities stabilize.”

Brian Hansen, principal at Vortus, agreed: “We believe many groups will find Alchemist’s creativity and flexibility attractive and look forward to implementing the strategy through a number of structured development programs.”

Bracewell Advises J&J Worldwide Services by Management Partnership

J&J Wordwide Services, an Austin-based provider of preventive maintenance to federal government sites, announced July 8 that it has been acquired by Arlington Capital Partners in a partnership with J&J’s current management team.

Terms of the deal were not disclosed.

A mostly Texas-based Bracewell team advised J&J in the transaction, led by corporate partners Tom Adkins (Austin) and Cleland Dade (Houston) assisted by corporate associates W. Jared Berg, Caroline E. Ellis and Sarah Ashley Byrd, all of Houston. Counsel Lance W. Behnke provided tax advice from Houston and counsel George W. Rendziperis provided help on energy issues.

Also pitching in from Austin were IP partner Michael Chibib and environmental partner Timothy A. Wilkins. Employee issues were handled by compensation partner Matthew B. Grunert and benefits partner Rebecca Baker, both of Houston, assisted by employment associate Amber K. Dodds in San Antonio.

Houston associates Kate Barrington McGregor and Emily A. Banse advised on finance, while issues of corporate governance were handled by partner Tony L. Visage and associate Benjamin J. Martin, both of Houston. Regulatory issues were reviewed by Andrew Monk.

Sheppard Mullin represented Arlington Capital with a team led from Washington, but it included finance partner Joel Bannister along with corporate associate Matthew McCalip, finance associate Evan Hall and labor & employment associate Jonathan Clark, all of Dallas.

J&J Maintenance, Inc. dba J&J Worldwide Services was founded in Austin in 1970 as a small disadvantaged business by Johnny Voudouris and James Lee. After Lee’s retirement, Voudouris and his wife, Sharron, transformed J&J into a major player in government maintenance contracting.

Neither company elaborated on the structure of the partnership.

J&J president and CEO Steven Kelley said, “In Arlington Capital, we found the ideal partner to carry on Johnny Voudouris’ legacy. They are committed to preserving and cultivating the mission and employee-focused culture that Johnny and Sharron Voudouris have imbued in the Company since its founding 50 years ago. The investment from Arlington will allow J&J to remain an independent entity and retain its strong culture.”

A 29-year veteran of J&J Worldwide, Kelley was appointed to head the company last August after 11 years heading the company’s business development.

Arlington Capital is a Washington, D.C.-headquartered is a PE fund focused primarily on businesses that rely heavily on government contract services. J&J is the fourth investment in from its $1.7 billion Arlington Capital Partners V fund.

Norton Advises Kansai Electric in Aviator Wind Project

Kansai Electric Power Co., a Japanese utility holding company based in Osaka, announced July 10 that it has purchased an ownership stake in the largest wind farm in Texas.

Terms weren’t announced, but the deal gives Kansai subsidiary, KPIC USA, a 48.5% interest the Aviator Wind Project in Coke County, Texas, a 191-turbine West Texas wind facility located between Abilene and San Angelo.

Norton Rose Fulbright advised on the deal with a team co-led from Austin by Becky Diffen, a transactions partner who specializes in renewable energy projects. The team also included Sam Porter, Josh Rocha, senior counsel Amy Mitchell and Eli Gaylor, all of Austin. Pitching in from Houston were Bob Greenslade, Geetika Jerath and Steve Kuntz. Other team members were based in Washington D.C. and New York.

The Aviator Project, owned and funded by Ares Management Infrastructure and Power, is targeted to begin commercial operation in August — the largest single-phase, single-site wind project in the U.S.

It is also Kansai’s first renewable energy project and first onshore wind farm investment in the U.S. The Japanese company owns four other projects in Ireland, the UK and Finland which, with the addition of Aviator, together generate 949 megawatts.

CAPITAL MARKETS

Latham Advises on $500M in Real Estate “Green Bonds”

Latham & Watkins said July 7 that it aided Kimco Realty Corp in its pricing of $500 million public offering of “green bonds” whose funds are intended for the financing or refinancing of environmentally sustainable real estate.

The transaction was led out of Washington, D.C., but included Houston associates Ryan Lynch and Jessica Sherman.

Kimco, a real estate investment trust headquartered in Jericho, New York, intends the proceeds of the issue for the development and acquisition of green buildings, energy efficient building upgrades, installation of sustainable water and wastewater management systems, and the development of renewable energy.

The company is one of the nation’s largest acquirers and developers of open air shopping malls featuring grocery store anchors.

The bonds are described as 2.700% notes due 2030 with an effective yield of 2.751%, maturing October 1, 2030. Closing is expected this week.

OTHER:

Locke Lord advised Hollingsworth Oil Company on a consent order from the Federal Trade Commission aimed at settling antitrust concerns about the company’s sale of fuel and convenience stores to Tri Star Energy.

An FTC complaint charged that the Tri Star acquisition of outlets in several Central Tennessee locations would adversely affect competition. Instead, Tri Star agreed to divest the concerned outlets to Cox Oil company within 10 days of the proposed acquisition.

Locke Lord Dallas partners Van Jolas and Brad Weber advised on the agreement.

*** ***

On June 30, bankrupt McDermott International successfully completed the previously announced sale of its Lummus Technology business. Lummus was sold to a joint partnership between Haldia Petrochemicals Ltd., a flagship company of The Chatterjee Group, and Rhône Capital. Proceeds paid off McDermott’s DIP loan with money left over for restructuring emergence costs and cash for the company’s balance sheet.

Kirkland represented McDermott in the transaction, as it does in the bankruptcy, with Evercore providing finance advice. Jackson Walker serves local counsel and Baker Botts is advising as corporate counsel.

Allen Pusey

Allen Pusey is a senior editor and writer at The Texas Lawbook.

©2023 The Texas Lawbook.

Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.

If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is content that is 100% true and accurate. Thank you.

© Copyright 2023 The Texas Lawbook
The content on this website is protected under federal Copyright laws. Any use without the consent of The Texas Lawbook is prohibited.