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The Texas Lawbook

Free Speech, Due Process and Trial by Jury

  • Appellate
  • Bankruptcy
  • Commercial Litigation
  • Corp. Deal Tracker/M&A
  • GCs/Corp. Legal Depts.
  • Firm Management
  • White-Collar/Regulatory
  • Pro Bono/Public Service/D&I

CDT Roundup: 12 Deals, 9 Firms, 115 Lawyers, $4.44B

June 23, 2020 Allen Pusey

If you’re in or around the energy industry — particularly a shale producer — your eyeballs are probably tired of watching WTI Crude hover near $40bbl. It’s shelter-in-place pricing for a debt-heavy corner of the industry beset by high inventories, lowered demand and a smoldering price war between OPEC and Russia held momentarily in check.

However, consider for a moment: It could be worse. You could be in retail.

Your mall locations — lush public spaces populated by stores and salons and cinemas and food court lines — are the first-in, last-out targets of public health restrictions with each twitch in the fever lines of the COVID-19 virus.

Your employees are wary of coming to work. Your shoppers are learning to spend their money online. Your movie-goers are working their way through Netflix. And you fear that customers returning to your food courts will feel like they are having take-out meals served in a petri dish.

And so, it is unsurprising that the number of global retail sector M&A deals announced for the week ending June 14 declined by 11.8%, compared to the previous week, according to GlobalData’s deals database.

Even worse, it came following an optimistic 17.7% uptick in May retail sales as states opened up from shelter-in-place. But in the South and Southwest the rollout didn’t go quite as well as some expected, and there was fallout.

The big blow was an announcement June 10 by Simon Property Group, the largest U.S. owner and operator of shopping malls — that it was dropping its $3.6 billion bid to buy an 80% stake in Taubman Realty Group LP, a Michigan-based mall operator of high-end shopping malls. When Taubman said last week they planned to enforce the deal, originally announced in February, Simon took them to court, claiming that Taubman had done too little to preserve its value when the pandemic hit.

Before that, Sycamore Partners cancelled a deal to buy L Brands (Victoria’s Secret), and adding to these failed deals such high-profile bankruptcies as J. Crew, Pier 1, Neiman Marcus and JCPenney and you have the picture of an industry whose public-facing infrastructure had already been eroding before COVID-19 accelerated the process.

Now there is publicly-uttered fear of a “second wave” of infection. And global statistical measures from groups like the Organization of Economic Cooperation and Development, suggest a lack of confidence that things will get better soon.

Despite the May uptick in retail sales, the OECD Consumer Confidence Index (described as household confidence in future spending and saving) dropped between April (98.98) and May (98.15). More sobering was the Business Confidence Index, which was even lower and also dropped between April (98.16) and May (97.70). Compare that with May 2008, the middle of the Great Recession, when the BCI was 99.28.

Now that you’ve eaten your Brussels sprouts, some good news. Or reasonably decent news, given the context. Texas dealmaking was up last week with 12 deals reported worth $4.44 billion. Those deals involved nine different law firms and 115 Texas lawyers. This time last year, there were 17 transactions worth $10 billion.

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

The transactions included seven M&A/Funding deals worth $2.8 billion and five capital markets transactions valued at $1.6 billion.

M&A/PRIVATE EQUITY/FUNDING

V&E Advises Enviva on $347M Plant Acquisitions, $200M Placement

On June 18, Enviva Partners announced two separate purchases of wood pellet production plants, one in Waycross, Ga., the other in Greenwood, S.C.

Teams from Vinson & Elkins advised on both acquisitions, as well as a $200 million private placement to help finance the deals.

Enviva acquired the Waycross plant through its acquisition of Georgia Biomass Holding LLC from innogy SE and one of its subsidiaries for $175 million in cash. As part of the acquisition, Enviva acquires the company’s long term take-or-pay contracts that remain in effect through 2024. As part of the purchase, Enviva also acquires the company’s long-term terminal lease at the Port of Savannah.

A V&E team led by New York partner Caroline Blitzer Phillips advised Enviva with help from Houston senior associate Daniel McEntee. The team also included a broad swath of lawyers from Houston and Dallas: corporate partners Ryan Carney and David Cole and associates Dan Henderson and Christine Mainguy on tax, partner Ramey Layne (corporate); counsel Scot Dixon (real estate); partner Brian Bloom, counsel Christie Alcalá and senior associate Kristy Fields (executive compensation/benefits); partner Sean Becker (labor/employment); and counsel Sarah Mitchell and senior associate Robert Stelton-Swan (insurance).

To acquire the Greenwood plant, Enviva paid $132.0 million in cash along with the assumption of a $40 million third-party promissory note bearing interest at 2.5 percent per year. As with the Waycross acquisition, Enviva acquired the plant’s existing contracts, as well as a waiver on certain costs over the $28 million Enviva has promised to invest in a planned expansion.

In connection with the Greenwood Acquisition, Enviva’s sponsor has agreed to assign to the Partnership five firm, long-term, take-or-pay off-take contracts with creditworthy Japanese counterparties (the “Associated Off-Take Contracts”) that have maturities between 2031 and 2041, aggregate annual deliveries of 1.4 million metric tons per year (“MTPY”), and an aggregate revenue backlog of $5.3 billion.

The V&E team advising Enviva on the Greenwood acquisition was also led by Caroline Blitzer Phillips with lawyers from New York assisted by Houston partner Ryan Carney and associate Dan Henderson (tax); partner Ramey Layne (corporate); and counsel Scot Dixon (real estate).

On the finance side, Bracewell’s Will Anderson advised Evercore, financial advisor to the conflicts committee of Enviva’s board of directors.

There was a third capital markets leg connected to the two acquisitions. Enviva also announced that it has signed a purchase agreement with investors for the sale of $200.0 million in common units in a private placement (the “Private Placement”) to finance a portion of the combined purchase price of the acquisitions.

V&E also advised the Partnership on the private placement. The team was led by partner Ramey Layne with assistance from New York counsel Chris Mathiesen, Houston senior associate Jessica Lewis and associates Maggie Webber and Madison Guidry, also of Houston.

Latham & Watkins advised the placement agents, with a team led by Houston corporate partner Michael Chambers and New York-based partner Stelios Saffos. The team also included Houston associates Eric Schoppe, Erin Lee, Jordan Mack, and Sarah Dunn.

On total investment of $375 million, the acquisitions are expected to generate net income in the range of $18.7 million to $22.7 million and adjusted EBITDA in the range of $56.0 million to $60.0 million.

The ValueAct Spring Fund, a leading investor in companies with environmental and social value, anchored the private placement and ValueAct’s Chairman, Jeff Ubben, has agreed to join the Eviva board.

“The Greenwood and Georgia Biomass acquisitions are fundamentally transformative for Enviva’s scale and diversification,” said John Keppler, Chairman and Chief Executive Officer of Enviva. “Not only are we increasing Enviva’s fully contracted production capacity by 35 percent, but we are doing so in new fiber baskets, with new deep-water terminal infrastructure, and with new customers under new long-term, take-or-pay off-take contracts that we expect will enable us to continue our track record of generating durable cash flows and growing our distributions sustainably well into the future.”

V&E Advise Tortoise Acquisition Corp. Merger With Hyliion

Austin-based Hyliion Inc., a developer and manufacturer of electrified power trains for Class 8 commercial vehicles, announced June 19 that it has agreed to merge with Tortoise Acquisition Corp.

The combined company, to be named Hyliion Holdings Corp. will be traded on the New York Stock Exchange under the symbol HYLN and is expected to have a pro forma market capitalization exceeding $1.5 billion.

Tortoise, an energy-focused SPAC backed by Lightfoot Capital Partners, was advised by a Vinson & Elkins team led by Houston corporate partner Ramey Layne with two New York lawyers and Houston counsel Doug Lionberger. Other team members included Houston senior associate Robbie Hopkins, partner Devika Kornbacher and Austin senior associate Ben Cukerbaum on intellectual property matters; partner Jason McIntosh, senior associate Brian Russell and associate Daniel Henderson on tax matters; partner David D’Alessandro and counsel Missy Spohn on employment matters; senior associate Andrew Schulte and associates Layton Suchma and Chandler Jones on securities law matters. Barclays Capital served as financial advisor.

V&E also represented Tortoise Acquisition in its $233 million initial public offering that closed in February 2019.

Cooley and Wick Phillips advised Hyliion, and Marathon Capital is serving as exclusive strategic and financial advisor.

Founded in 2015, Hyliion produces hybrid and fully electric powertrains capable of reducing the carbon footprint truck fleets on a scalable basis. The company says its powertrain solutions integrate easily will almost any make of heavy-haul commercial vehicle.

The $1.5 billion pro forma implied market capitalization is calculated at $10.00 per share PIPE subscription price and assumes no public shareholders of Tortoise Acquisition Corp. exercise their redemption rights. The company will receive $560 million of proceeds from an upsized $325 million PIPE, along with cash held in trust.

Barclays Capital and Goldman Sachs served as joint-placement agents on the PIPE offering.

All existing shareholders and investors will continue to hold their equity ownership, including Dana, Sensata Technologies, Sumitomo Corporation of Americas, Axioma Ventures, FJ Management, New Era Capital Partners, Colle Capital Partners and others.

These funds will be used to accelerate product commercialization, product production, operational growth and for general corporate purposes. The boards of directors of both Tortoise Acquisition Corp. and Hyliion unanimously approved the transaction. Completion of the proposed transaction is subject to customary closing conditions and is expected to be completed around the end of the third quarter of 2020.

Hyliion founder and CEO Thomas Healy will be joined on a new constituted board of directors by Tortoise’s CEO Vince Cubbage and CFO Stephen Pang.

Said Healy: “Hyliion’s solutions were specifically developed to utilize existing infrastructure in an effort to support rapid technology deployment. Our mission is to enable our fleet customers to quickly realize lower carbon emissions and significantly lower cost of ownership benefits provided by our technology.”

Baker Botts Advises Rheogistics in Acquisition by IGI

Baker Botts announced June 15 that it had advised Rheogistics LLC in its acquisition by the International Group, Inc.

Rheogistics operates a Picayune, Mississippi, factory that produces lubricants for PVC manufacturers. Toronto-based International Group operates a fully integrated supply chain of waxy feedstocks, refining and blending facilities.

Baker Botts represented Rheogistics in the transaction led by Houston corporate senior counsel Bill Lamb and Washington, D.C. partner Brendan Dignan (Partner, Washington). Other Texas lawyers included partner Mark Bodron and special counsel Krisa Benskin in Houston on tax matters; Austin-based partner Paulina Williams on environmental matters and Dallas-based real estate special counsel Joel Overton.

Kirkland Advises The Sterling Group in Closing of $2B Fund

The Houston-based The Sterling Group June 15 that it had closed Sterling Group Partners V fund after only four months at a hard-capped $2 billion that had been oversubscribed by investors from the U.S., the Middle East and Asia.

A mostly Houston-based Kirkland & Ellis team advised Sterling led by investment funds partner Matt Nadworny and Chicago partner Brian Delaney.  The team also included investment associates Christine Wilson, Samara Sanderson, Nathan Wolcott, Nathan Judd and Josh Wilson. Also pitching in were partner Stephen Butler and associate Victoria Chang on tax matters, along with Chicagoemployee benefits partner Liz Dyer.

Consistent with the history of its other funds, Sterling Fund V will primarily target corporate carve-outs and family businesses. The company says most of its investors have invested previously with Sterling.

Founded in 1982, The Sterling Group targets controlling interests in basic manufacturing, distribution and industrial services companies. Typical enterprise values of its initial platform companies range from $100 million to $750 million.

Sterling’s previous fund closed in 2015 with $1.25 billion of investor commitments. The company says it has sponsored the buyout of 56 platform companies and numerous add-on acquisitions for a total transaction value of over $17 billion. Currently, Sterling has over $4 billion of assets under management.

V&E Advises Antero Resources in $402M ORRI Transactions

Vinson & Elkins advised Denver-based Antero Resources Corporation on a structured overriding royalty interest transaction with Sixth Street Partners that could result in proceeds to Antero of up to $402 million.

The V&E team was led by partner John B. Connally, with assistance from counsel Matthew Falcone and Tan Lu and associates Torie Berkowitz, Kathryn Hastings, Anastasia Arsenio and Helen Xiang. Other key team members included partners Todd Way and Lina Dimachkieh and senior associate Megan James (tax); partner Guy Gribov, senior associate Alexander Kamel and associate Joe Higdon (finance); partner Scott Rubinsky and senior associate Austin March (corporate); partner Matthew Dobbins (environmental); FCPA advise was provided out of Washington D.C.

Credit Suisse Securities was sole financial advisor to Antero on the transaction.

White & Case advised San Francisco-headquartered Sixth Street with a team led out of Houston by partner Mingda Zhao and included partners Emery Choi, Mark Holmes, Jorge Mattamouros and Chad McCormick in Houston; counsel Morgan Hollins in Houston; associates Meredith Craven, Hannah Craft, Kabir Phaguda, Michael Rodgers and Nicole Rodriguez-Fierro in Houston.

Spilman, Thomas & Battle, PLLC and Buchanan, Ingersoll & Rooney, PC handled local law issues.

The ORRI transaction gives Sixth Street a 1.25% overriding royalty interest in all existing producing wells and a 3.75% overriding royalty interest in existing acreage in wells completed over the next three years (none after March 31, 2023).

In addition, Antero also announced that it is has repurchased additional 2021 senior notes during the second quarter and that $540 million of that issue remain outstanding.  

Antero CEO Paul Rady said the transaction “addresses over half of our $650 to $900 million asset sale goal for 2020 and allows us to pay down debt, while importantly retaining the long-term upside of our core acreage position.” He said the company expects to sell additional assets and their projected free cash flow to further reduce its debt.

Matt Dillard, partner at Sixth Street said, “Antero has built an extensive core acreage position in one of the lowest cost shale basins in the U.S.  Our investment further strengthens Antero’s balance sheet and provides a clear path for the company to develop its attractive acreage position for many years to come.” 

Weil Advises Main Event Entertainment in $80M Investment by RedBird Capital

Ardent Leisure Group announced June 15 that it has agreed to sell a 24.2% interest in Dallas-based Main Event Entertainment to RedBird Capital Partners for $80 million.

The deal includes a RedBird option to acquire an additional 26.8% interest in Main Even from Ardent, which is headquartered in Australia.

A Texas-based corporate lawyers led a team from Weil that advised Main Event, which owns and operates 44 indoor family amusement centers in 18 states.

The Weil team was led from Dallas by corporate partners Jim Griffin and Rick Frye with assistance from corporate associates Anne Moretti Langford, Rob Martin, Preston Moore, Austin Freeman, Chris Perkins, Niko Lane and Mark McGonigle. Also pitching in were finance associate Matt Berde, real estate attorney Leslie Smith and lawyers from New York, Washington D.C. and Silicon Valley.

Goldman Sachs served as exclusive financial advisor to Ardent Leisure and Main Event Entertainment.

Headquartered in New York, Redbird Capital is a private equity investment firm formed in 2013 by 20-year Goldman Sachs alumnus, Garry Cardinale. It was advised in the transaction by Fried, Frank, Harris, Shriver & Jacobson.

Based in Plano, Main Event centers feature indoor activities like laser tag, bowling and miniature golf. All of its centers were closed in March because of shelter-in-place restrictions due to the coronavirus pandemic. As of last week’s announcement, 28 of the its locations had reopened on a restricted basis, including all of its locations in Texas.

In the interim the company said it had closely-monitored its capital requirements and had made adjustments to conserve capital and maintain operating liquidity. Main Event said its various location openings have been encouraging, despite enhanced public health security measures. Several of its newly-opened locations had experienced above or near four-wall EBITDA break-even.

CAPITAL MARKETS TRANSACTIONS

Baker Botts Advises Summit Midstream on Unit Exchange

Baker Botts advised Summit Midstream Partners LP on its offer to exchange its preferred units for newly issued common units of the partnership, part of a series of acquisition and simplification transaction announced last month.

The deal was led by Houston corporate partners Joshua Davidson and Jason Rocha.

According to the announcement June 18, holders of 9.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units will receive 150 of the new common units for each Series A preferred unit held. Holders of 30,000 units or more of the Series A units have until July 17 to make a proper tender.

Last month, Summit suspended distributions on their Series A and common units allowing the company to retain approximately $76 million in cash annually. Although the unpaid distributions would continue to accrue, it said the cash would be used to de-lever its balance sheet, enhance liquidity and increase its financial flexibility.

Baker Botts Advises Underwriters on $500M Upsized Offering of DCP Midstream Notes

DCP Midstream announced June 17 that it is offering $500 million in 5.625% senior for its subsidiary, DCP Midstream Operating LP, due 2027. The amount has been upsized from an original offering of $400 million.

DCP Operating Partnership intends to use the net proceeds from the offering for the repayment of indebtedness under its revolving credit facility and the funding of capital expenditures.

Baker Botts said it represented the underwriters. BofA Securities, Inc. and Wells Fargo Securities, LLC as joint active book-running managers for the offering. PNC Capital Markets LLC, SMBC Nikko Securities America, Inc., SunTrust Robinson Humphrey, Inc. and U.S. Bancorp Investments, Inc. are acting as joint book-running managers for the offering.

The mostly Houston-based Baker Botts team was led by corporate partners Josh Davidson and A.J. Ericksen assisted by special counsel Chuck Campbell on tax, partner Scott Janoe on environmental issues and partner Connie Simmons Taylor on real estate.

V&E Advises CSI Compressco in Senior Note Exchanges

Vinson & Elkins said it advised CSI Compressco LP, the Houston-based provider of compression services for oil and natural gas production, in an exchange of notes intended to extend company liabilities for its 2022 bonds.

The offer, which expired June 10, exchanged for its outstanding 7.25% Senior Unsecured Notes due 2022 for newly issued 7.50% Senior Secured First Lien Notes due 2025 and 10.0%/10.75% Senior Secured Second Lien Notes due 2026.

The primarily Texas-based V&E corporate team was led by partner David Oelman and counsel Dan Spelkin, assisted by senior associate Raleigh Wolfe and associates Alex Lewis, Ximena Kuri and Lawrence Nelson. The team also included along with finance partners James Longhofer and Bailey Pham, with assistance from associate Arthur Munoz. New York partners Jessica Peet and David Meyer provided restructuring advice.

Bondholders were represented by Akin Gump.

The exchange offer expired with approximately $215 million of principal amount of unsecured notes tendered, representing 72.7% of the outstanding unsecured notes.

As a result of the exchange offer, the company said it had reduced the outstanding principal amount of its unsecured notes from $296 million to $81 million.

CSI Compressco GP, a wholly owned subsidiary of Tetra Technologies, is the general partner of CSI Compressco LP. Brady Murphy is president and CEO of both. Its general counsel is University of Texas Law School alum Bass Wallace Jr.

HuntonAK Advises Underwriters on $700M Northern States Power Issue

Hunton Andrews Kurth said it had advised the underwriters on a $700 million bond issue by Northern States Power Company on June 15.

Underwriters for the 2.60% First Mortgage Bonds, Series due in 2051 include Morgan Stanley, MUFG Securities Americas, U.S. Bancorp Investments and Wells Fargo Securities.

The Minnestoa-based utility company operates in Minnesota, North Dakota and South Dakota. The Company also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas in Minnesota and North Dakota.

The HuntonAK team was led from New York, but included Houston partner Robert McNamara and Houston associate Tim Strother on tax matters.

Allen Pusey

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

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