The Texas Lawbook

Free Speech, Due Process and Trial by Jury

CDT Roundup: 14 Deals, 11 Firms, 68 Lawyers, $8.2B

Mergermarket came out with its global M&A figures for the first quarter last week and they were expectedly bad.

After almost 10 years of growth, activity was down almost 40% by value to $563.7 billion across 3,685 transactions, a level not seen since the first half of 2013 and eerily similar to the first quarter of 2008 during the early days of the financial crisis.

The data firm said 2020 is unlikely to repeat the $10 billion-plus megadeal frenzy of 2019, when 38 such deals were announced. Only eight were announced in 2020’s first quarter versus eleven in the same period last year and 14 in 2018.

Activity in the U.S. was even worse, with the value down by 57% to $206 billion over 1,255 deals. That followed an already declining market last year, when activity fell 40% by value between the first and second half of 2019.

“Looking ahead, the coronavirus has gotten in the way of basic deal logistics and has delayed sales processes, which is bound to hit overall M&A activity in the coming months,” Mergermarket said.

M&A in the financial services, industrials and chemicals, pharma, medical and biotech and consumer sectors dropped by high double-digit figures while M&A in the technology sector saw a 5% increase in activity by value compared with the first quarter of last year, Mergermarket said. Wachtell, Lipton, Rosen & Katz handled the most deals in the first quarter followed by Kirkland & Ellis and Willkie Farr & Gallagher.

Enverus came out with its own first quarter figures for the U.S. upstream oil and gas sector last week and they also weren’t pretty: Only $770 million in deals were completed in the first quarter, less than one-tenth of the $8 billion average for first quarters between 2010 and 2019 and a historic low. The fall in oil prices to 18-year lows in March obviously didn’t help matters.

“Even before oil prices collapsed on COVID-related demand issues and the surge in global production led by Saudi Arabia, M&A markets were highly challenged,” Enverus senior M&A analyst Andrew Dittmar said. “Responding to Wall Street pressures, E&Ps had slashed spending and refocused from growth to cash flow dampening the appetite for acquisitions.”

The largest deal of quarter was Alpine Energy Capital’s successful stalking horse bid for the assets of Permian producer Approach Resources, which opted for a sale of its assets in Chapter 11. “With creditors perhaps leery of taking equity in a reorganization, Chapter 11 sales may drive future deal flow,” the firm said

Enverus noted that creditors of Sanchez Energy are reportedly taking equity in a reorganized company as a possible conclusion to its Chapter 11 process and that Whiting Petroleum filed a voluntary Chapter 11 on April 1 with a restructuring agreement in principle with certain debtholders (see item below).

Mineral and royalty interests are playing an increasing role in deal markets, Enverus said, noting Kimbell Royalty Partners’ purchase of a diversified package from NGP-backed Springbok Energy I and II for $175 million.

“We expect additional capital will be interested in deploying here, even in a down market,” Enverus market research director John Spears said. “The challenge will be navigating a wide bid/ask spread between buyers and sellers with rig numbers and development plans for acreage in flux.”

Dittmar said as painful as the downturn is, it may finally push the industry into healthy consolidation that leaves it with larger, more efficient and better capitalized operators when the recovery starts. “These buyers will likely have opportunities to acquire high-quality assets that might have been viewed as too expensive before the downturn,” he said.

Enverus said it will take the establishment of a bottom in commodity prices and the creation of upward momentum before companies feel comfortable committing to deals, driven by a post-COVID return to normalcy and an OPEC decision around production levels.

In the meantime, Mizuho Securities analyst Paul Sankey expects as many as 70% of the 6,000 or so shale drillers to go bankrupt before the cycle turns, according to Bloomberg.

Dealmaking involving Texas lawyers seemed to chug along last week, with 14 transactions announced, valued at $8.2 billion, versus 16 worth $6.5 billion the week before and 12 valued at $6.87 billion at the same time last year.

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 Count
CapM Value $M
November 25, 202394,835913161,78533,050
November 18, 202322$6,568.71718414$4,709.28$1,859.5
November 11, 202315$9,8251317912$6,5813$3,244
November 4, 202315$20,582.51419312$19,417.53$1,165
October 28, 202318$68,419.11815215$66,6463$1,773.1
October 21, 202316$6,755.91616515$6,755.91$3
October 14, 202310$67,851.2131257$61,998.53$5,852.7
October 7, 202317$6,595.51322816$5,995.51$600
September 30, 202317$1,896.451318914$806.453$1,090
September 23, 202323$6,432.71723016$1,402.87$5,029.9
September 16, 202325$23,226.72335316$17,2399$5,987.7
September 9, 202312$6,36981027$4,3115$2,058
September 2, 202314$2,52269213$1,3221$1,200
August 26, 202317 $12,160.25 1320215$ 6,573.252$ 5,587.00
August 19, 202319$11,5051321315$11,2554$250
August 12, 202319$9,698.8131847$3,27012$6,428.8
August 5, 202313$5,2011211812$5,0511$150
July 29, 202315$21,031.61319611$18,292.04$2,739.6
July 22, 202318$3,9921213013$2,8085$1,184
July 15, 202313$8,254.95138113$8,254.9500
July 8, 202316$5,441.451217211$2,4435$2,998.45
July 1, 202316$6,8721010512$5,4744$1,398
June 24, 202313$10,9141620110$7,8743$3,040
June 17, 202317$5,880.71515115$4,705.72$1,175
June 10, 202319$8,516.11311116$6,252.43$2,263.7
June 3 202312$6,104.42121388$4,256.924$1,847.5
May 27, 202317$12,200106711$6,1656$6,035
May 20, 202311$22,458.181034$19,4557$3,003
May 13, 202312$7,034101018$5,4604$1,574
May 6, 202320$3,297.61819617$2,985.63$312
April 29, 202323$3,691.21813517$1,969.76$1,721.5
April 22, 202316$5,5701410414$4,7502$1,000
April 15, 202312$23,818.195910$21,618.12$2,200
April 8, 202316$7,94991739$5,4727$3,477
April 1, 202321$18,676.71217511$10,926.710$7,750
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

Eleven firms and 68 Texas attorneys were involved in the activity, which saw 10 M&A/private equity/venture capital deals valued at $2.2 billion and four capital markets transactions worth almost $6 billion.

M&A/PRIVATE EQUITY/VENTURE CAPITAL

Bracewell advises TC Energy as U.S. counsel on $1.1B Keystone pipeline investment

Bracewell said April 3 that it advised TC Energy Corp. as U.S. counsel on the Alberta government’s $1.1 billion equity investment and $4.2 billion loan guarantee for the Keystone XL pipeline project.

Texas team members included Houston partner G. Alan Rafte, counsel Lance W. Behnke of Seattle and Houston and associates Sidney Nuñez, Patrick K. Johnson and Janie M. O’Connor, all of Houston. TC Energy’s in-house counsel is Victoria Marselle.

TC Energy said March 31 it would proceed with construction of the pipeline, which would result in an investment of $8 billion into the North American economy. 

The 1,210-mile pipeline will be capable of delivering 830,000 barrels per day of crude oil from Hardisty, Alberta, to Steele City, Nebraska, where it will connect with TC Energy’s facilities and eventually reach U.S. Gulf Coast refiners. Pre-construction activities are underway, and the pipeline is expected to enter service in 2023.

The project is underpinned by new 20-year transportation service agreements for 575,000 barrels per day with a group of counterparties, which are expected to generate around $1.3 billion of EBITDA per year. Current contracts for 115,000 barrels per day from Hardisty to the U.S. Gulf Coast on the existing Keystone line will shift to the new facilities under renewed 20-year contracts. 

The $1.1 billion investment will cover planned construction costs through the end of this year. The remaining capital investment of around $6.9 billion is expected to be largely made in 2021 and 2022 and funded through the $4.2 billion project level credit facility guaranteed by the Alberta government and a $2.7 billion investment by TC Energy.

TC Energy said its investment will be funded through internally generated cash flow, hybrid securities and common equity through the activation of its dividend reinvestment program in 2021 and 2022. It also intends to establish a $1 billion shelf to enable an at-the-market equity issuance program if needed.

Once the project is completed and placed into service, TC Energy plans to acquire the Alberta government’s equity investment and refinance the $4.2 billion credit facility in the debt capital markets.

Baker McKenzie works on two transactions worth $387.3M

Baker McKenzie said its Texas lawyers advised on two recent transactions worth $374.3 million.

The firm counseled middle-market private equity firm Calera Capital on its acquisition of Thayer Power & Communication Line Construction Co. from the Anderson Group on March 26 for $161.3 million. Houston tax partner Kai Kramer was part of the team.

Thayer Power provides repair, maintenance and upgrade services for the utility and telecommunications markets. 

Baker McKenzie also advised Brazil’s Grupo SBF on its April 2 purchase of the Brazilian operations of Nike for $213 million. Dallas partner Kevin Maher and associate Raja Chatterjee were part of that deal team.

Once approved by Brazilian regulators, the deal will give Grupo SBF’s retail brand unit Centauro the exclusive rights to distribute Nike’s products online and in stores in Brazil for the next 10 years. 

The deal includes Nike’s Brazilian inventory and stores but no intellectual property rights. 

Paul Hastings advises Plains All American on $300M Felix Midstream acquisition

Paul Hastings said March 31 that it advised Plains All American Pipeline on its $300 million purchase of Felix Energy Holdings II, known as Felix Midstream, from EnCap Investments-backed Felix Energy.

Partner Ned Crady – who joined the firm last fall from Baker Botts – and associate Fritz Eggen in Houston led the deal team for Plains entity FM Midstream Holdings. Vinson & Elkins counseled Felix Midstream, whose primary operations are in West Texas.

The deal was signed Dec. 13, closed Jan. 31 and announced Feb. 4 as part of Plains All America’s fourth quarter and 2019 earnings release. There were purchase price adjustments for repairs to the acquired assets and specific covenants for real property follow-up actions.

Gibson Dunn aids News Corp. on $235M News America Marketing sale to Charlesbank

Gibson Dunn & Crutcher said March 31 that it’s advising billionaire Rupert Murdoch’s News Corp. on the sale of its News America Marketing business to Charlesbank Capital Partners for $235 million.

The team was led by New York partner Barbara Becker but included Houston partner James Chenoweth, who advised on tax aspects of the deal.

Goodwin Procter assisted Charlesbank, which used RBC Capital Markets as its financial advisor. Allen & Co. was News Corp.’s financial advisor. 

News Corp. has the option to keep up to 15% of the unit.

The deal includes $50 million in cash upon the closing of the transaction and additional deferred cash payments of between $125 million and $185 million, depending on the timing. The deferred consideration is payable on or before the five-year anniversary of closing. 

News Corp. CEO Robert Thomson said in the March 31 release that after evaluating strategic options, the company’s board determined that the business’ sale to Charlesbank was the best course of action to enhance shareholder value and simplify the company’s structure.

Charlesbank managing director Brandon White said Bill Redmond – a former executive at Procter & Gamble, PepsiCo, Quaker Oats and Inncor Inc. – will become CEO of the business after the transaction closes. 

The transaction is expected to close in the fourth quarter if it clears regulators.

News America Marketing has in-store marketing media options in 60,000 stores in the U.S. and Canada and reaches households across the country with circulation of 60 million through 2,000 publications. 

The business also has a digital media network, including programmatic display, email, social and video to help brands and retailers connect with consumers. Headquartered in New York, it has a sales force of 300 people in 12 offices across the U.S. and Canada.

Charlesbank is a Boston- and New York-based middle-market private equity investment firm managing more than $7 billion of capital. 

Baker Botts, Gibson Dunn aid on Delek US’ drop down to Delek Logistics for $100M plus units

Baker Botts said March 31 it represented Delek US Holdings Inc. on its drop down of the Big Spring gathering system to affiliate Delek Logistics for $100 million in cash and 5 million units.

The team included corporate partner A.J. Ericksen and associates Ieuan List and Shumaila Dhuka; global projects partner Scott Looper and associates Austin Jennings and Casey Polivka; finance partner Rachael Lichman and senior associate Chad Davis; and tax partner Michael Bresson, senior associate Jared Meier and associate Evan Skeen. All are in Houston.

Gibson Dunn said it counseled the conflicts committee of Delek Logistics’ board, which used Baird as its financial advisor.

The corporate team included Houston partners Gerald Spedale and Mike Darden and Houston associates Stella Tang, William Bald and Nathan Zhang. Houston partner Shalla Prichard advised on financing and Houston partner James Chenoweth and Houston associate Collin Metcalf assisted on tax matters.

The assets and services are projected to generate annual EBITDA of $30 million to $32 million. Delek Logistics will finance the deal with cash on hand and through borrowings on its revolver.

Uzi Yemin, chairman of both entities, said in a statement that the deal is the next step in growth for Delek Logistics.

“The Big Spring gathering system is an integral piece of our expanding midstream footprint, which positions us uniquely among refiners with access to crude, in excess of our refining capabilities,” he said. “Additionally, getting closer to the wellhead allows us to control crude quality and cost, providing improvement in our refining performance and cost structure.”

Locke Lord closes two deals for Main Street Capital worth $56.2M

Locke Lord said April 2 it recently closed two deals for Main Street Capital Corp. worth $56.2 million.

The firm represented the private equity firm on a new $24.4 million investment in Cody Pools Inc., a designer and builder of swimming pools and spas for residential and commercial customers in the U.S.

The investment includes first-lien, senior secured term debt and a direct equity investment. Main Street also will provide Cody with a credit facility to support its growth initiatives and working capital needs along with an unnamed co-investor.

The firm also worked with Main Street on a new $31.8 million investment to facilitate the minority recapitalization of Classic H&G Holdings, a provider of engineered packaging solutions for the home and garden and fragrance and cosmetic industries. 

That investment included a first-lien, senior secured term debt and a minority direct equity investment.

Partner Greg Heath and senior counsel Jeannie Diep led the deal teams for both transactions. Others were partners Sara Longtain, Jerry Higdon, Tammi Niven, Buddy Sanders and Ed Razim, senior counsel Michelle Gutierrez-Begin and associate Matt McKenna, all of Houston.

Porter Hedges assists Destination Pet on its $47M acquisition of VitalPet

Porter Hedges said April 3 it represented Destination Pet on its acquisition of Veterinary Care Inc., known as VitalPet, under Section 363 of the bankruptcy code. 

Under the terms of the transaction, which was approved by the U.S. Bankruptcy Court for the southern district in Houston, Destination Pet also will assume certain liabilities for a total transaction value of $47 million.

Porter Hedges was lead bankruptcy counsel and transactional co-counsel to Destination Pet, including Houston partners Eric English, John Higgins and Brian Rose.

Holland & Hart also counseled Destination Pet. VitalPet used Okin Adams as its legal counsel, Wick Phillips as transaction counsel, the Claro Group as financial advisor and Gordian Group as investment banker.

Founded in 2017, Destination Pet is a pet healthcare and services company operating in 14 states across the U.S. 

Wilson Sonsini advises Atmosphere on $14M Valor Siren funding

Atmosphere, an Austin provider of streaming content for businesses, said April 2 it attracted another $5 million for its Series A fundraising from Valor Siren Ventures.

S3 Ventures also participated in the round, bringing it to $14 million.

Wilson Sonsini Goodrich & Rosati advised Atmosphere, including partner Scott Craig and associates Ani Avagyan and Nick Haenel in Austin. Cooley counseled Valor.

Launched in 2019, VSV partners with founders and invests in early-stage food, food technology and retail technology companies.

Atmosphere’s free ad-supported platform offers 21 audio-optional channels such as CHIVE TV, Red Bull TV, X Games TV, America’s Funniest Videos TV and Quick Take by Bloomberg. It streams on TVs in 8,000 restaurants, bars, gyms and other venues with 135,000 hours per day.

The network has grown two-and-a-half times since the start of 2019 and was adding 800 new venues per month.

“TV programming for businesses is broken and expensive,” Atmosphere co-founder and CEO Leo Resig said in a statement. “By designing streaming content and features focused on retail businesses, Atmosphere is meeting the needs of two underserved markets: businesses looking for free, audio-optional TV programming and advertisers that have never been able to effectively buy television media to reach a targeted out-of-home audience.”

ViacomCBS, Fox and Comcast have acquired free ad-supported streaming platforms Pluto, Tubi and Xumo in recent months to diversify offerings beyond subscription video-on-demand and traditional pay TV. Atmosphere claims it provides the only streaming multi-channel platform that is free and licensed for commercial venues.

CAPITAL MARKETS/FINANCINGS

Bracewell, Baker Botts work on Sysco’s $4B notes offering

Houston food distribution giant Sysco Corp. priced a $4 billion notes last week with the help of Bracewell.

The team included partner Charles Still in Houston, counsel Ian Brown in Dallas and Houston associates Kate McGregor, Shannon Baldwin and Caroline Ellis. Tax matters were handled out of the firm’s New York office (partner Michele Alexander).

Baker Botts partner Jeremy Moore in Houston represented the underwriters, which included BofA Securities Inc., Deutsche Bank, Goldman Sachs, TD Securities (USA), Wells Fargo, J.P. Morgan Securities, PNC Capital Markets and U.S. Bancorp.

Sysco’s general counsel is Eve McFadden, who joined the company’s legal department in 2008 and was named senior VP of legal and general counsel and corporate secretary last year.

The offering included $750 million in 5.650% senior notes due 2025, $1.25 billion in 5.950% senior notes due 2030, $750 million in 6.600% senior notes due 2040 and $1.25 billion in 6.600% senior notes due 2050.

Sysco plans to use the net proceeds to repay outstanding borrowings under its commercial paper program and for general corporate purposes, including the redemption of up to $750 million of its 2.60% senior notes due in October.

The bond offering is Sysco’s latest move to bolster its cash position during the coronavirus crisis, according to a report by S&P Global. The company said March 30 it drew another $100 million from its revolver less than two weeks after withdrawing $1.5 billion from the same $2 billion funding line, S&P added.

Latham Advises Oneok on its $1.75B upsized notes offering

Latham & Watkins said March 30 it represented natural gas midstream services provider Oneok on its $1.75 billion upsized notes offering.

Houston partners David Miller and Trevor Lavelle led the deal team with associates Erin Lee and Ashlyn Royall. Houston partners Bryant Lee and Jim Cole with associates Michael Rowe and Marianne Standley assisted on tax matters and a lawyer in the firm’s Los Angeles office helped on environmental (counsel Joshua Marnitz).

Tulsa, Okla.-based Oneok said March 5 it was offering $1.65 billion in senior notes, including $400 million of 5-year senior notes at a coupon of 2.20%, $850 million of 10-year senior notes at 3.10% and $400 million of 30-year senior notes at 4.50%.

The company plans to use the net proceeds to repay all amounts outstanding under its commercial paper program and for general corporate purposes, which may include repayment of existing indebtedness and funding of capital expenditures. 

The underwriters included Barclays Capital Inc., Deutsche Bank, Mizuho Securities USA, TD Securities (USA), BofA Securities, Citigroup, Credit Suisse, Goldman Sachs, Morgan Stanley, MUFG Securities Americas, PNC Capital Markets, RBC Capital Markets, Scotia Capital (USA), SMBC Nikko Securities America, Inc. and Wells Fargo.

Winston represents NexPoint on $225M at-the-market equity offering

Winston & Strawn said April 3 it represented NexPoint Residential Trust Inc. on its at-the-market equity offering program in which it may sell $225 million worth of shares of its common stock.

Dallas partners Charlie Haag and Justin Reinus co-led the team, which included associates Steven Franklin, Jon Pevey and Emily Semon, also of Dallas. Two attorneys in the firm’s Chicago office also pitched in (partner Dennis Kelly and associate Mark Christy).

Jefferies, Raymond James & Associates Inc., SunTrust Robinson Humphrey Inc. and KeyBanc Capital Markets Inc. are the sales agents. SunTrust Bank is the administrative agent under the credit facility.

V&E advises Crestview on $21M investment in U.S. Well Services

Vinson & Elkins said April 1 it advised affiliates of Crestview Advisors as the lead investor in a $21 million private placement of newly issued Series B redeemable convertible preferred stock of U.S. Well Services Inc.

Partner James Garrett and senior associate Crosby Scofield led the deal team with primary assistance from partners Ramey Layne and Lina Dimachkieh.

Simmons Energy, a division of Piper Sandler, was financial advisor to the special committee of U.S. Well Services’ board, including Sanjiv Shah, Terry Padden and Ira Green.

U.S. Well Services provides hydraulic fracturing services and electric fracture stimulation.

The Houston-based company announced the placement on April 1 along with the finalizing of an amendment to its senior secured term loan with CLMG Corp. that suspends scheduled principal and interest payments for 24 months. 

The company plans to use the placement proceeds to fund the $20 million cash portion of an extension fee payable to CLMG, which also is getting $1.05 million in newly issued preferred stock and 5.5 million shares of Class A common stock.

CFO Kyle O’Neill said in a statement that the transactions significantly strengthen U.S. Well Services’ liquidity profile and balance sheet in a challenging market environment. 

“We believe that this enhancement to the company’s capital structure, in combination with our recent cost reduction measures, positions U.S. Well Services to continue delivering on behalf of its customers and create value for shareholders,” he said.

CEO Joel Broussard said the company recently made the difficult decision to significantly reduce headcount and compensation to rationalize its cost structure in light of the current market.

“The suspension of principal and interest payments on our senior secured term loan for eight quarters further improves U.S. Well Services’ financial position and ability to generate cash flow in a challenging operating environment,” he said.

The amended term loan facility’s interest rate will be reduced to zero. Beginning April 1, 2022, the facility will resume incurring interest at the applicable LIBOR rate, subject to a 2% floor, plus 8.25% and scheduled quarterly principal amortization payments equal to 0.5% of the initial principal balance of the loan. The maturity date for the facility will be extended by 18 months to Dec. 5, 2025. 

UPDATE/OTHER:

Onetime shale energy giant Whiting Petroleum filed for Chapter 11 on April 1 in U.S. Bankruptcy Court for the southern district in Houston with Judge David Jones presiding. The Denver-based company listed $3.6 billion in debt and $7.6 billion in assets and a plan to erase more than $2.2 billion in debt by exchanging it with 97% of the reorganized company’s new equity. Kirkland & Ellis partners Brian Schartz and Anna Rotman in Houston and Jackson Walker partners Matthew Cavenaugh in Houston and Jennifer Wertz in Austin are counseling Whiting. Porter Hedges partners John Higgins and Eric English, also of Houston, are assisting the ad hoc noteholders committee while Weil Gotshal & Manges partner Alfredo Perez in Houston is assisting creditor Caliber North Dakota. The debtor’s chief restructuring officer is Stein Advisors’ Jeffrey Stein, its financial advisor is Alvarez & Marsal and its investment banker is Moelis & Co. PJT Partners is the committee’s financial advisor.

***

Dallas-based upscale retail chain Neiman Marcus Group is stepping up preparations to seek bankruptcy protection after the coronavirus pandemic forced it to close its stores and furlough most of its employees, Reuters reported April 2 citing sources. The company already has held discussions with bondholders and lenders about potential financing that would allow it to continue operating under or outside of bankruptcy protection, the news agency said. Neiman Marcus declined to comment. Interest payments on part of the company’s $4 billion in debt are due starting April 15, Reuters added. Ares Management and Canada Pension Plan Investment Board took Neiman Marcus private in 2013 in a $6 billion leveraged buyout.

***

Morgan Lewis said last week it advised privately held Airon Corp. of Melbourne, Fla., on a technology licensing agreement it signed with GE Healthcare to make ventilators to help address a shortage due to the coronavirus. Ford Motor Co. will make the devices at its plant in Ypsilanti, Mich., with production expected to reach 50,000 over the next 100 days with 30,000 more units generated per month as needed after that. The Morgan Lewis team included Texas partners Sameer Mohan in Houston and Sheila Armstrong in Dallas and associate Tara McElhiney in Houston. Hogan Lovells advised Ford.

©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.