CDT Roundup: 12 Deals, 16 Firms, 168 Lawyers, $20.7B

Let’s begin with some dutiful reporting.

You can be forgiven if you confused numbers for the week ending Sept 7 (a dozen deals for $20.7 billion) with numbers for the week prior (a baker’s dozen for $20.6 billion). Both were dominated by M&A, with only one capital markets deal to boast.

But don’t be fooled. Last week, as described more fully below, seemed much weaker than the previous week, especially for Texas lawyers. First, the $20.4 billion valuation is the product of a single deal: the Verizon acquisition of Frontier Communications for $20 billion. Second, there were no Texas lawyers reportedly involved in that deal. Third, the Verizon/Frontier deal was the only deal reported last week above the $1 billion threshold. The previous week’s lineup saw five — and a couple more in the billion dollar neighborhood.

But maybe we are fooled. In fact, the numbers above may mean nothing.

Deal reporting is arbitrary, particularly when it comes to deal values. PE deals are far less likely to have a public value attached, even though the transactions are routinely in the hundreds of millions. More than half of the M&A reported to the Corporate Deal Tracker database are reported with undisclosed values — or with values reported to us confidentially for league table credit, but not for publication. So no news there.

But sometimes the deals themselves have a narrative that goes beyond a value undisclosed. Deals appear that are part of a flow that goes beyond the numbers. Such is the case this week.

Take the aforementioned Verizon deal, for instance. Verizon is, in essence, buying back a geographic system of fiber optic connections — in Florida, California and Texas — they sold to Frontier in 2016. Behind that story is another story of bankruptcy and about $10 billion in debt.

Then there’s EnCap Flatrock’s acquisition of Sinco Pipeline Edgewater Midstream, one of the deals with undisclosed terms. The purchase of Sinco’s pipeline is part of the well-documented and on-going consolidations within the energy sector, for sure. But it is also part of Shell’s simplification of its own portfolio the on-going scramble for connections with the LNG export business developing on the Texas Louisiana Gulf Coast.

Likewise, the acquisition by Pearl Energy’s Voyager Midstream of the DCP East Texas Gathering from Phillips 66 is more than the acquisition of 550 miles of natural gas pipeline for an undisclosed amount. Under the deal Voyager also acquires the Carthage Hub, the marketplace convergence point for NG pricing and connections to those same Gulf Coast LNG terminals.

And finally, there are two more deals worthy of special attention. One is the TPG Rise Climate acquisition of Tulsa-headquartered MIRATECH. The TPG Rise Climate interest is obvious. TPG RC is TPG’s arm for decarbonization investments. MIRATECH develops a variety of filtering technologies including after-market tools aimed at curbing effluents and emissions from power generations, particularly for the benefit of data centers. It’s a big deal. We don’t know how big a deal because the terms were undisclosed. But TPG is a $19 billion alternative investment fund nestled inside a $229 billion investment alternative investment fund.

Moreover, its investors include some strange bedfellows. In May, TPG announced the investment of $1.5 billion in TPG Rise by Hassana Investment Company, the investment management arm of the Kingdom of Saudi Arabia’s General Organization for Social Insurance.

In the same vein comes ExxonMobil’s announcement that ADNOC has agreed to take on a 35 percent interest in Exxon’s proposed venture in Baytown, Tex. for the low carbon production of hydrogen and ammonia. Exxon has suggested that, ultimately, the venture is part of a carbon capture plan that will require an investment of $100 billion. ADNOC is the Abu Dhabi National Oil Company. Again, terms of the deal were undisclosed. We’ll let you do the math.

The point is not that the numbers lie, but that they are simply the visible swirl of a deeper undercurrent. Numbers can help you define an arc or a vector, but sometimes they can distract us from the arc of a story that sits right in front of our eyes.

But to complete our dutiful reporting: during this same week last year we reported 12 deals for $6.4 billion. You can decide whether that’s fact or distraction, but it’s all in the table below.

M&A/FUNDING

Verizon to Acquire Frontier Communications in $20B Transaction

Deal Description: Verizon announced Thursday that it has agreed to acquire Frontier Communications. The $9.6 billion all-cash transaction is valued by the companies at $20 billion when it includes Verizon’s assumption of Frontier debt. Over the past four years Dallas-based Frontier has spent more than $4.1 billion upgrading its fiber network which currently includes more than 2.2 million subscribers across 25 states, deriving more than 50 percent of its revenue from fiber products. The Frontier network will now be folded into Verizon’s base of 7.4 million connections in 9 states and Washington, D.C. Debevoise & Plimpton advised Verizon. Cravath Swain & Moore counseled Frontier. Paul, Weiss, Rifkind, Wharton & Garrison advised the strategic review committee. Skadden & Arps advised PJT, Frontier’s financial advisors. For more information see our daily coverage here.

Unlock receives $280M in commitments through D2 Asset Management

Deal Description: Unlock Technologies, a fintech specializing in residential investment, announced Sept. 3, $280 million in commitments from Dallas-based D2 Asset Management. The transaction includes a $30 million Series B investment from D2, along with a $250 million capital commitment to finance the Tucson, Ariz., company’s future growth. Other Series B investors include Saluda Grade, Second Century’s Ventures and REACH, an investment subsidiary of the National Association of Realtors. Unlock’s signature product is a non-lending investment arrangement with homeowners referred to as a “home equity agreement” (HEA). Under such an agreement homeowners receive a lump sum of cash in exchange for a share in the future equity of their home, instead of a specific amount as defined under a home equity loan. The arrangement is currently available in 14 states.

D2 Outside Legal Counsel: Sidley Austin led by PE partners Brien Wassner in New York and Daniel Rawner in Boston.

Note: D2 was launched in July by brothers Ben and Luke Doramus in partnership with Koch Real Estate Investments with $1 billion in AUM. Sidley’s Wassner advised them on the launch.

Liberty Latin America acquires EchoStar assets for $255M

Deal Description: Liberty Latin America announced Sept. 4 the closing its $255 million acquisition from EchoStar of 100MHz in spectrum assets and approximately 85,000 prepaid mobile subscribers in Puerto Rico and the US Virgin Islands. The closing, which follows a favorable justice department review, allows the $255 million to be paid in four annual installments from local liquidity sources: cash on hand, cash generated from operations and/or revolving credit facilities.

Liberty LA Outside Counsel: Baker Botts led by New York partner Jonathan Gordon and Houston partner James Marshall. The corporate team also included partner Nicole Perez (New York); senior associate Grace Matthews (Austin) and New York associates Henry Klimowicz, Charlie Gili and Peter Frintzilas. They were assisted on antitrust issues from Washington, D.C. by partners Matt Adler, senior associate Andrew Lucarelli and associate Wyatt Carlock, along with Houston partner Jon Lobb on tax.

Denali Capital Acquisition signs $52.1M deSPAC merger with biomedical firm

Deal Description: Scilex Holding Company, a publicly traded company that invests in non-opioid pain treatment technologies, announced Sept. 3 that it has agreed to merge its wholly owned subsidiary, Semnur Pharmaceuticals, with a blank check company, Denali Capital Acquisition Corp. The deal is the second for Denali, which in June 2022 grossed $75 million from its SPAC IPO. In June 2023, Denali and Longevity Biomedical, Inc. mutually agreed to abandon a deSPAC merger announced six months prior. Semnur, valued at $2.5 billion prior to the merger announcement, is in late-stage clinical development of SEDEXA, described as “the first non-opioid novel injectable corticosteroid gel formulation” for patients with a severe, chronic form of sciatica. In its most recent SEC filings, Denali reports a current balance of $52.1 in its SPAC-related trust account.

Semnur Outside Legal Counsel: Paul Hastings

Denali Outside Legal Counsel: Winston & Strawn with a team led by Houston partner Mike Blankenship, assisted by Chicago partner Olga Loy, Chicago counsel Justin Trapp, associates Jacob Botros and Matthew Regens in Houston, along with associates Tony Busch in Washington, D.C. and Andrew Butler and Jeremy Jaewon Chang in New York.

TPG Rise Climate acquires MIRATECH from BP Partners

Deal Description: TPG Rise Climate announced Sept. 4 that it has acquired MIRATECH Corp., a major developer of emissions and noise reduction technologies, from Dallas-based BP Energy Partners. Terms were undisclosed. TPG Rise Climate is the carbon-sensitive investment arm of San Francisco/Fort Worth-headquartered TPG. MIRATECH manufactures catalysts, noise filters, monitoring systems and industrial emissions solutions aimed at achieving environmental regulatory compliance for hard-to-decarbonize industries in the energy, marine and construction sectors. Of particular recent focus are energy-needy data centers and the stationary power centers required to serve them. “As energy demand related to AI and cloud migration increases, there is an opportunity to expand MIRATECH’s market leadership amongst data center emergency backup power providers,” said MIRATECH CEO David Zenthoefer. “We are also seeing increasing emissions regulations and air quality standards around the world, including further caps on methane emissions, which our products are well-placed to address. With the capital and expertise from TPG Rise Climate, we look forward to capitalizing on the substantial growth and emissions reductions opportunities ahead.”

MIRATECH Financial Advisors: R.W. Baird & Co.

MIRATECH Outside Legal Advisors: The Garden Law Group and Locke Lord

BP Energy Partners’ Counsel: A Locke Lord team led by Rachel Fitzgerald and Lauren Richter (both of Houston). Additional assistance was provided by Buddy Sanders, Bill Swanstrom, Niha Ali, Andrew Nelson (all of Houston), Mark Backofen, Van Jolas, Jack Dougherty (Dallas), Lori Basilico and Andrew Capalbo (both of Providence).

TPG Rise Climate Outside Legal Advisors: Simpson Thacher & Bartlett and Paul, Weiss, Rifkind, Wharton & Garrison

The Simpson Thacher team advised TPG on the corporate transactional issues, led from New York by Katherine Krause and Anthony Vernace. They were supported by Robert Hausen, David Kim, Michael Lazris and Dashia Kwok (M&A); Jeannine McSweeney, Joshua Stephens and Warsame Elmi (Executive Compensation and Employee Benefits); Russell Light and Matthew Lester (Tax); Lori Lesser (Intellectual Property); Steven DeLott (Insurance); Krista McManus (Real Estate); Abram Ellis (Regulatory); and Michael Isby (Environmental).

Paul, Weiss advised on antitrust issues led by antitrust partners Annie Herdman and Marta Kelly, and included counsel Yuni Sobel and Todd Hahn.

Counsel to Direct Lenders: Latham & Watkins represents the direct lenders in the transaction, with teams lead by New York partners Nicole Fanjul and Jesse Sheff, with associates Victoria Basedow and Daniel Ovadia.

Note: Warren Garden is general counsel for BP Energy Partners. He is founder of The Garden Law Group, former founding partner at Block & Garden and earned his J.D. at Harvard Law.

ExxonMobil Sells Interest in Baytown Low Carbon Hydrogen Facility to ADNOC.

Deal Description: ExxonMobil announced Sept. 4 that it has agreed to sell a 35 percent stake in its proposed low-carbon hydrogen and ammonia facility in Texas to the Abu Dhabi National Oil Corp. The proposed plant, which is expected to attract as much as $100 billion in investments, will be located in Baytown, is expected to produce one billion cubic feet of low-carbon hydrogen daily, and more than one million tons of ammonia annually while capturing more than 98% of the associated CO₂ emissions. Regulatory permitting has not yet been approved, but a Final Investment Decision is expected during the first half of 2025. ExxonMobil noted that Sheikh Khalid bin Mohamed bin Zayed Al Nahyan, crown prince of Abu Dhabi personally witnessed signing of the agreement.

ExxonMobil Outside Counsel: Latham & Watkins and Clifford Chance

The Latham & Watkins team was led from Houston by partners Justin Stolte and Chris Peponis. The team also included partners Brian Hintze, Greg Sorensen and Taylor López, with assistance from Mark Goshgarian, Corynn Wilson, Brian Bruzzo, Jacob Kempf, Jordan Armstrong, and Siyao Liu.

Clifford Chance also advised with a team led from Houston by partner Jonathan Castelan assisted by associates Sam Bentley and Hillary Healey, with partner Alex Leff advising on tax.

Note: In June, ExxonMobil announced an agreement with Air Liquide to provide transportation of low-carbon hydrogen through Air Liquide’s existing pipeline network.  Additionally, Air Liquide will build and operate four Large Modular Air separation units (LMAs) to supply 9,000 metric tons of oxygen and up to 6,500 metric tons of nitrogen daily to the facility. The LMAs will primarily use low-carbon electricity to help reduce the project’s carbon footprint.

EnCap-backed Edgewater Midstream acquires Sinco Pipeline system

Deal Description: Edgewater Midstream, a portfolio company of EnCap Flatrock Midstream, announced Sept. 4 that it is acquiring the Sinco Pipeline system along with the Colex East and Colex West terminals from subsidiaries of Shell USA. The Sinco system connects a variety of refined products from the Deer Park Refinery Complex with Colex East and West, as well as sources of refined products and materials and terminals situated along the Houston Ship Channel. The deal also includes connections from both Colex terminals with the Colonial Pipeline and Explorer Pipeline, two of the largest refined products pipelines in the U.S. Terms of the transaction were undisclosed.

Edgewater Outside Counsel: Baker Botts advised Edgewater with a team led from Houston by partners Joshua Davidson and Natasha Khan. The BB team also included senior associate Garrett Hughey and corporate associates Michael Mazidi (Houston), Jenna Kabrich (Austin) and Cade Luedde (Houston). Assisting were global projects partner Scott Looper (Houston) with associates Megan Young and Jesse Nation (both in Houston); partner Daniel Kruger (Washington, D.C.) and associates Sarah Hendrix (Houston) and Taylor Gamboa (Dallas) on real estate; partner Michael Bresson (Houston) and senior associate Katie McEvilly (Houston) on tax.

SCF Partners acquires Delta Valve and TapcoEnpro from CIRCOR Intl.

Deal Description: Houston-based SCF Partners announced Sept. 3 the acquisition from CIRCOR International of high-performance industrial valve makers, DeltaValve and TapcoEnpro. The two manufacturers produce severe-service valves used globally in the infrastructure of energy processing and refineries. DeltaValve is headquartered in Salt Lake City, TapcoEnpro in Houston. Said Garrett Jackson, director at SCF Partners: “For decades, these companies have set the standard for delivering specialized products and services that make critical infrastructure operations safer and more efficient. Aging energy infrastructure only increases the need for these critical solutions.” CIRCOR is a portfolio company of KKR.

Financial Advisor to CIRCOR: Piper Sandler

KKR/CIRCOR Outside Legal Counsel: Kirkland & Ellis with a team led by New York partners Jennifer Perkins and Steven Choi and lawyers from New York, Chicago and Los Angeles

SCF Outside Legal Counsel: Vinson & Elkins led by partner Matt Strock and associate Chandler Spinks, with assistance from associates Mimi Nguyen and Ashley Osborne. Other key team members included partner Lina Dimachkieh, counsel Allyson Seger and associate Paige Rapp (tax); partner Sarah Mitchell and associates Victoria Bahrami-Negad and Sean Dao (insurance); partners Miguel Colebrook and Ben Higson, associates Sam Phillips and Joe Mallet and trainee solicitor Joe Brown (English law); partner Sean Becker and associates Peter Goetschel and Jordan Peck (employment/labor); partner Shane Tucker and associates Matt Green and Morgan Whittlesey (executive compensation/benefits); counsel Zach Rider, senior associate Jen Bassett and associates Hayley Johnson and Rob Tusch (finance); counsel Rajesh Patel and senior associate Alexa Chally (intellectual property); counsel Ken Adler and associate Nathan Kemp (real estate); counsel Brian Howard and associate Ami Egerstrom (anti-corruption); counsel Elizabeth Krabill McIntyre and associates Alexander Sprenger and Claire Connor (government contracts and sanctions); partner Kara Kuritz and associate Adam Thomas (antitrust); and partner Matt Dobbins and associate Kelly Rondinelli (environmental).

Pearl Energy’s Voyager Midstream acquires DCP East Texas from P66

Deal Description: Voyager Midstream Holdings, a portfolio of Dallas-based Pearl Energy Investments, announced Sept. 3 its acquisition of DCP East Texas Gathering LLC. As an indirect subsidiary of Phillips 66, DCP East Texas operates 550 miles of natural gas pipeline and NG gathering and processing assets in the heart of the Haynesville Shale. Terms of the deal were undisclosed. Headquartered in Carthage, Tex., DCP East Texas is rated at 400 million cubic feet per day of active cryogenic gas, and 12,000 barrels per day of liquids fractionation capacity. Said Voyager CEO Will Harvey: “We are committed to growing our infrastructure footprint in East Texas and North Louisiana and improving producer connectivity and netbacks.”

Voyager Outside Legal Counsel: Vinson & Elkins with a team led from Houston by partner Benji Barron and associates Chandler Jones and Kelli Westmoreland. Other key team members included partner Sarah Mitchell and senior associate Victoria Bahrami-Negad (insurance); partner Brian Russell (tax); partner Patricia Adams and associate Kenneth Strain (executive compensation/benefits); partner Becky Baker and associate Andrew Cox (employment/labor); partner Matt Dobbins and associate Kelly Rondinelli (environmental); counsel Rajesh Patel and senior associate Alexa Chally (intellectual property); counsel Scot Dixon (real estate); and partner Jamie Leader (litigation).

Note: In the transaction, Voyager also acquires the Carthage Hub, the integrated natural gas trading and delivery hub capable of transferring over one billion cubic feet per day to multiple markets across the US, including the LNG export terminals on the Texas and Louisiana Gulf Coast.

Sky Island Capital acquires Curdtown

Deal Description: Kaufhold’s Kurds, a portfolio company of Dallas-based Sky Island Capital, announced Aug. 30, its acquisition of Buffalo, Minnesota-based Curdco Inc. which operates under the brand name “Curdtown.” Terms of the transaction were not disclosed. Curdtown sources its cheese curds from Ellworth, Wis., which happens to be the headquarters of Kaufhold’s Kurds. Sky Island, which specializes in lower middle market investments, acquired Kaufhold’s Kurds in April 2023. Curdtown, Kaufhold’s first add-on acquisition, was founded in 2011 “with the ideal that curds should be available to everyone” produces deep-fried, white cheddar cheese curds which the company says it has refined to appeal to appeal to consumers outside Wisconsin’s dairyland. Said Mark Largent, owner of Curdtown: “I am thrilled to find the right home for Curdtown. The Kaufhold’s team has created an excellent culture, and our curds will be a great addition to Kaufhold’s product offerings.”

Sky Island/Kaufhold’s Outside Counsel: Jones Day with Chicago partner Lisa Lathrop and Cleveland associate Christopher Hawley.

Ledger Run gain capital injection from Blue Star Innovation Partners

Deal Description: Ledger Run, a tech provider whose platform aims to simplify the business side of clinical research for contract research organizations (CROs), announced Sept. 4 a strategic partnership with Blue Star Innovation Partners. Based in Frisco, Blue Star was founded by brothers Rob and Dan Wechsler with Dallas Cowboys owner Jerry Jones. Terms of the deal were not announced. Since its founding in 2018 Ledger Run has enrolled a customer base of pharmaceutical sponsors and CROs that includes three of the top ten pharmaceutical companies and two of the largest CROs. The company says the capital injection by Blue Star, coupled with Blue Star’s own operational software expertise will help accelerate Ledge Run’s growth.

Blue Star Outside Counsel: A team led by Weil Gotshal & Manges advised Blue Star with a team led from Dallas by PE partner David Gail, who was assisted by PE associates Patrick Hosch, Spencer Finney and Hunter Zepeda. Also on the team were compensation/benefits partner Jennifer Britz and associate Amanda Nowak; partner Rebecca Sivitz and associate Paige Mickel on employment; partner Dennis Adams, counsel Catherine Kim and associate Aron Lichtschein on IP; partner Olivia Greer and associate David Merck on cybersecurity; partner Jason Vollbracht and associate Charles Kogel on tax; partner Timothy Welch and counsel Ariel Fliman regulatory issues; antitrust counsel Carla Hine; and counsel Jessica Lurie and associate Cassandra Xia on private funds.

CAPITAL MARKETS

Mach Resources prices stock issue at $112.9M

Deal Description: Upstream independent Mach Natural Resources on Sept. 6 announced pricing of a public offering of 7,272,728 common units at $16.50 per unit, setting expected net proceeds of $112.9 million after expenses and sales to underwriters. The offering was expected to close on Sept. 9. Mach intends to use the net proceeds to fund pending and potential acquisitions and for general partner expenses. Based in Oklahoma City, Mach focuses its investments in oil, natural gas and NGL reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas and the panhandle of Texas.

Book-running Managers: Raymond James, Stifel, Nicolaus & Company, and Truist Securities, Inc. are acting as joint book-running managers for the offering. Stephens Inc. and Johnson Rice & Company are co-managers.

Legal Counsel for Underwriters: Baker Botts led from Houston by partners Josh Davidson and Doug Getten, with senior associate Garrett Hughey and associates Austin Lee and Cade Luedde, also of Houston. Others include Austin partner Clint Culpepper on finance; Houston counsel Chuck Campbell on tax; senior associate Kyle Doherty and associate Brittany Dudley on global projects in Houston and counsel Elizabeth Singleton, also in Houston on environmental issues.

Mach Outside Counsel: Kirkland & Ellis

Note: Kirkland and Baker Botts also advised Mach and its underwriters, respectively, for its IPO in October 2023.