The Texas Lawbook

Free Speech, Due Process and Trial by Jury

CDT Roundup: 17 Deals, 14 Firms, 79 Lawyers, $4.3B

As many in the oil and gas industry know, private equity firm exits have been hard to pull off.

With the sector generally out of favor with investors, initial public offerings now are few and far between, and divestitures to “strategics” – what investment bankers call publicly traded corporations – are rare.

As a result, some private equity firms are having to push out their investments’ exits past the usual three to five year mark – or, in the case of Energy & Minerals Group, are looking to move several of their large investments into new vehicles to buy a little more time until conditions improve.

There are a few ways private equity firms are finding to exit, according to Tim Perry, a Credit Suisse investment banker who spoke on a panel at Mergermarket’s energy forum in Houston last week.

The most common one is for the firms to take some stock, rather than straight cash, when they sell their portfolio companies with the hope of earning a better return in the future when the time is right.

Private equity firms also are selling part or all of their portfolio companies to other private equity firms – there’s a keen interest in infrastructure and royalty assets these days – or doling out free cash flow to the investors via distributions. Perry mentioned one private equity firm that was distributing 90% of its original investment to shareholders (he didn’t name the firm).

“Exits have become more complicated,” he said. “There are more models to look at.”

There are some bright spots on the horizon. Some of the generalist investors who left the sector are working to get back in given low valuations for properties and companies (more than half of publicly traded oil and gas companies are trading at 60% below net asset value, Perry said). 

IPO’s also are beginning to pop up again, from Brigham Minerals this past month to Rattler Midstream this past week, leading the latter to become the biggest energy initial public offering this year (see item below).

What could bring back the traditional private equity firm exit – either as an IPO or sale to a strategic? Perry said the return of an undersupplied oil and gas market, which would boost commodity prices, or, at the very least, “sustainable oil prices.”

Back in the Lone Star State, deals involving Texas lawyers slipped a bit this past week leading up to the Memorial Day holiday. There were 17 transactions amounting to $4.36 billion, versus 21 deals worth $9 billion the previous week and 15 valued at $20.4 billion in the same week last year. 

The week saw 14 M&A/private equity/venture capital deals valued at $3.7 billion and three capital markets transactions valued at $612 million. Seventy-nine lawyers at 14 different firms were involved in the action.

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
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

Gibson Dunn & Crutcher partner Hillary Holmes won the overachiever award for the second straight week with her work on three capital markets transactions, including another one for Waste Management and others for Gran Tierra Energy and U.S. Well Services.

M&A/PRIVATE EQUITY/VENTURE CAPITAL

Baker Botts advises Nascar on $2B International Speedway purchase

As The Texas Lawbook reported last week, NASCAR Holdings won over International Speedway Corp.’s public shareholders with a 7% sweetened purchase offer of $45 per share, or $2 billion – and Texas-based law firm Baker Botts helped it across the finish line.

If the deal goes through, which is expected this year if it clears the target’s stockholders, it will bring both companies under the ownership of the billionaire France family, which last year was thought to be considering selling all of part of NASCAR. 

The Baker Botts team was led by Jonathan Gordonout of New York but included several attorneys from across Texas, including corporate partner Grant Everett in Dallas, senior associate John Kaercher in Austin and associate Grace Matthews, also of Austin.

Houston associate Chad Davis advised on finance matters, Houston partner Rob Fowler and associate Gaby Alvarez assisted on employee benefits, Austin partner Aileen Hooks aided on environmental issues and Dallas partner Jeremy Gott and special counsel Patrick Matthewsworked on real estate.

Baker Botts picked up NASCAR work after its 2001 merger with Miller, Cassidy, Larroca and Lewin, whose partner John Cassidy had been NASCAR’s regular outside counsel.

Other legal advisors on the deal included Wachtell, Lipton, Rosen & Katz for the special committee of International Speedway’s board, which negotiated the transaction, and Saul Ewing Arnstein & Lehr for International Speedway. 

Dean Bradley Osborne Partners was the committee’s financial advisor while Goldman Sachs was NASCAR’s financial advisor. BDT & Co. was financial advisor to the France family, which owns NASCAR and a big chunk of International Speedway’s shares.

Merck preempts Peloton’s IPO with $1.05B purchase

Peloton Therapeutics, a Dallas developer of drugs focused on kidney cancer, announced May 21 that it had agreed to be acquired by Merck, thus preempting its planned initial public offering. 

The purchase price includes $1.05 billion upfront in cash and $1.15 billion based on the achievement of regulatory and sales milestones.

The company had attracted $270 million in funding from the Column Group, which owned a pre-IPO stake of 19.6%, Remeditex Ventures (14.7%), Topspin Partners (11.3%), RA Capital (7.5%), UC Regents (6.9%) and Nextech Invest (5.8%). It reportedly had a post-money valuation of around $711 million.

Peloton had set terms of its 9.4 million share IPO at $15 to $17 per share, which would have raised around $742 million if it priced in the middle. The issue was expected to launch toward the latter part of last week.

As The Lawbook previously reported, the offering’s lead underwriter J.P. Morgan was being advised by Cooley lawyers in New York and the company was being counseled by Wilson Sonsini Goodrich & Rosati out of Palo Alto. John R. Moore is general counsel of Peloton, which he joined in November of last year.

Covington & Burling represented Merck on the Peloton buyout with Credit Suisse as its financial advisor. Wilson Sonsini represented Peloton and Centerview Partners was its financial advisor.

The deal follows other pharmaceutical companies boosting their future product pipelines through acquisitions, including Bristol-Myers Squibb buying Celgene in January for $74 billion, the largest pharmaceutical deal ever, and Eli Lilly picking up Loxo Oncology, also in January, for $8 billion.

Peloton is a clinical-stage biopharmaceutical company focused on the development of novel small molecule therapeutic candidates targeting cancer and other non-oncology diseases. It has yet to post any sales.

The company’s lead candidate is PT2977, a novel oral HIF-2α inhibitor in late stage development for renal cell carcinoma.

“This acquisition exemplifies Merck’s strategy to pursue novel therapeutic candidates based on exceptionally promising and innovative research,” Merck Research Laboratories president Roger M. Perlmutter said in a statement. “We look forward to advancing this late-stage asset as part of our broad oncology R&D program.”

Peloton CEO John A. Josey said in a statement that Merck is recognized as a leader in cancer research and shares Peloton’s commitment to accelerate the development of candidates targeting HIF-2α to help patients with advanced cancers and other diseases.

The deal has to clear Hart-Scott-Rodino but the parties expect to close it in the third quarter.

Baker Botts advises Naphtha Israel on $330M Isramco deal

Baker Botts said May 21 it advised Naphtha Israel Petroleum Corp. on its acquisition of Isramco Inc. for $121.40 per share in cash, or $330 million.

The team included corporate partner A.J. Ericksen and associates Stephen Noh, Ieuan List and Parker Hinman, all of Houston.

Texas specialists included tax partner Ron Scharnberg, environmental partner Scott Janoe and associate Harrison Reback; employee benefits partner Mark Bodron and associate Marian Fielding; and oil and gas partner Craig Vogelsang. All are in Houston except for Fielding, who is in Dallas.

Norton Rose Fulbright counseled Isramco’s special committee, including senior associate Trevor Pinkerton and associate Rishika Sengupta, both in Houston. Duff & Phelps was the committee’s financial advisor.

Isramco shareholders have to approve the deal. Israeli businessman Haim Tsuff, who through various entities controls Naphtha, beneficially owns about 73% of Isramco’s outstanding stock.

The $121.40 per share price offer represents a 10% premium over Naphtha’s original bid and a 4.4% premium over the 30 trading-day average price of the company’s stock as of May 17.

Isramco is an oil and gas company with offshore operations in Israel and onshore operations in the U.S. It also owns a well service company, a production services company and a transportation unit. It’s expected to remain headquartered in Houston.

Naphtha is an Israeli public company involved in oil and gas exploration, development and production in Israel and the U.S. as well as commercial real estate and hotel management in Israel and in Europe.

Haynes and Boone aids Stream on $300M retail energy unit sale to NRG

NRG Energy agreed to buy the retail energy business of Dallas-based Stream Energy for $300 million.

In an interview with The Texas Lawbook, Stream chief legal officer Daniel Terrell said he quarterbacked the sale, tapping Haynes and Boone partners Bill Kleinman and Ryan Cox and associate Brandon McCoy in Dallas to do the heavy lifting on the purchase and sale agreement. 

“The firm had a long history with Stream, so it made sense,” Terrell said. “They knew the business.”

NRG tapped Baker Botts out of the firm’s Washington, D.C., office (partner Elaine Walsh and associate Susan Toumanian).

Terrell, who plans to look for new opportunities once the deal closes, said the sale involved a lot of moving parts, including regulatory and board matters along with an agreement for Stream to be the exclusive marketer after closing.

Stream said its remaining business will emerge as a new brand to market energy and wireless services through its independent sales organization.

Stream’s retail energy business provides electricity and natural gas in more than 40 deregulated markets across the U.S. It has 600,000 electric and natural gas customers in nine states and Washington, D.C. 

Stream co-founder and shareholder Rob Snyder said in a statement that the sale will allow the company to focus on its crusade to be a world-class direct selling business.

The deal has to clear the Federal Energy Regulatory Commission, the Georgia Public Service Commission and Hart-Scott-Rodino and is expected to close in the latter part of this year.

There’s been a lot of consolidation in the fragmented retail electricity provider industry recently. Earlier this year Vistra agreed to pay $328 million to acquire Crius Energy of Norwalk, Conn., making it the country’s biggest seller of residential electricity and expand its market share in Texas.

UBS analysts Daniel Ford and Ross Fowler said in a note that the Stream acquisition will boost NRG’s retail market share in Texas, Pennsylvania and other PJM markets.

NRG estimates the transaction will produce $65 million in annual EBITDA, which would give the deal a 4.6 times multiple.

Plains All American buys terminal assets from CVR for $36M

Sugar Land refiner CVR Energy Inc. – which is controlled by billionaire investor Carl Icahn – announced May 21 that it sold the 1.5 million barrel crude oil terminal at the Cushing, Oklahoma, oil hub to an affiliate of Plains All American Pipeline for $36 million.

CVR also said it’s exploring strategic alternatives, including a possible sale, to maximize value for its shareholders It’s hired BofA Merrill Lynch to advise it.

CVR, including general counsel Melissa Buhrig, didn’t respond to requests for its outside counsel on the sale and the review. 

Plains general counsel Richard McGee said the company handled the deal in-house but he wouldn’t provide the names of the lawyers who worked on it.

“CVR Energy is committed to maximizing value for its stockholders,” CVR CEO Dave Lamp said in the statement. “Both the sale of the Cushing terminal, which allowed us to derive value from an underutilized asset, and the exploration of potential strategic alternatives support this commitment.”

Winstead advises Bios on $21.7M Actuate investment

Actuate Therapeutics Inc., a Fort Worth clinical stage biopharmaceutical company, raised $21.7 million in Series B funding. 

Kairos Ventures led the round, which included DEFTA Partners and Tech Coast Angels and existing investor Bios Partners of Fort Worth.

Winstead counseled Bios, including shareholders Charlie Florsheim and Andrew Rosell and associate Sam Vinson, all of Fort Worth. Actuate used Baker Hostetler out of Washington, D.C. (partner Janis Penman) while Kairos tapped Stubbs Alderton & Markiles.

Actuate plans to use the proceeds to expand the company’s ongoing Phase 1/2 clinical trial and fund development programs, according to CEO Daniel Schmitt.

The company’s 1801 study is recruiting patients at Brown University Rhode Island Hospital, UCSF Helen Diller Family Comprehensive Cancer Center in San Francisco, the Miami Cancer Institute, the Mayo Clinic in Rochester, Minnesota, and Sanford Research, in Sioux Falls, South Dakota.

Actuate is focused on the development and commercialization of novel therapeutic agents for patients with cancer or inflammatory diseases.

Kastner Gravelle advises Cottonwood on $15M Tachyus investment

Tachyus, a Houston provider of production optimization software to the oil and gas industry, raised $15 million in Series B funding led by Cottonwood Venture Partners. 

Hogan Lovells advised Tachyus with attorneys in San Francisco. Cottonwood tapped Kastner Gravelle, including Evan Kastner, Michael Vaughn and Clara Chalk in Austin.

Tudor, Pickering, Holt’s John Gibson and Deanna Zhang provided financial advice to Tachyus.

The company claims to be an industry leader in optimizing fields under secondary and tertiary recovery, including the use of water and steam flooding. 

Founded in Silicon Valley, Tachyus has customers in North America as well as Argentina, Europe and Asia. It said its cloud-hosted software is powered by Data Physics, a blend of artificial intelligence and physics that predicts the reservoir’s response to changes in stimulation.
 
Tachyus CEO and co-founder Paul Orland said in a statement that the investment will allow the company to reach more customers and accelerate the delivery of new technology that improves clients’ performance.

Cottonwood managing partner Jeremy Arendt said as the oil and gas industry evolves in the face of new commercial challenges, operators need to focus on getting the best performance from their assets “and Tachyus’ technology has a track record of doing just that.”

QS+S counsels Blue Sage on Cobalt sale to Bison

Blue Sage Capital announced that it sold Cobalt Environmental Solutions to Oklahoma water infrastructure and logistics provider Bison for undisclosed terms.

Queen Saenz + Schutz partner Andrea Schutz counseled Blue Sage and Cobalt with assistance from partner Thomas Queen and firm attorney Carly Mayer. Hartzog Conger Cason in Oklahoma City counseled Bison.

Cobalt operates oilfield wastewater disposal and hydrocarbon extraction facilities in the Scoop and Merge plays of Oklahoma’s Anadarko Basin. Blue Sage created Cobalt in 2014 and made its initial investment to finance an acquisition in April of that year. 

Over the next five years, Blue Sage said it assisted Cobalt with the development of five additional greenfield facilities and partnered with management to establish long-term commercial relationships with key producers in the region. It claims the company’s sales tripled during its ownership.

Blue Sage managing member Peter Huff said the Cobalt investment represents the third time the firm has successfully partnered with Cobalt chairman John Barnidge.

Kirkland aids Western Natural on KKR partnership to invest in Williston

KKR said May 20 that it’s partnering with Oklahoma City-based Western Natural Resources to acquire producing and undeveloped oil and gas assets in the Williston Basin. The private equity firm didn’t disclose terms.

Kirkland & Ellis is representing Western Natural Resources, including corporate partner John Pitts and associate Ben Hardison and tax partner Mark Dundon and associate Ryan Phelps.

KKR said the Williston includes meaningful existing production and high quality, well-defined remaining drilling inventory well suited to its energy real assets strategy, which prioritizes free cash flow generation and strong asset level returns in the upstream oil and gas sector.

Western is led by Heath Mireles and his team, which KKR says has drilled, completed and operated thousands of wells over the Williston’s history. 

KKR director Ben Conner said the Williston continues to be a core area of focus as the firm sees an opportunity to acquire high quality producing assets with attractive long-term value creation opportunities to be delivered through superior technical and operational execution. 

KKR’s energy real assets strategy unit has invested $4 billion in capital across 12 transactions since 2015.

Jones Day advises Granite Construction on its Lametti asset purchase

Jones Day said May 24 that partner Alain Dermarkar advised publicly traded Granite Construction Inc. on its acquisition of Lametti & Sons Inc.’s cured-in-place pipe lining business.  

DeWitt Ross & Stevens counseled Lametti & Sons out of Minneapolis.

Watsonville, California-based Granite said the deal further strengthens its position in the water and wastewater market.

Lametti is a Minnesota-based company with expertise in cured-in-place pipe rehabilitation and trenchless renewal. It is one of the original certified installers of Granite’s Inliner product. 

Granite president and CEO James H. Roberts said in a statement that the acquisition is another step in the execution of its strategic plan, which includes organic growth through its core business lines, acquisitions in the water and wastewater markets and additional growth and geographical diversification in its vertically integrated business.

This acquisition will become the Minnesota office of Granite’s Granite Inliner unit, which has operations in Orleans, Indiana, as well as 17 offices and more than 800 employees in the U.S. and Canada.

MW, NRF, Boyar Miller aid on Commando’s funding from SCF, B-29

Commando Pressure Control, a Houston provider of pressure control products for oil and gas companies, raised an undisclosed amount of funding from SCF Ventures and B-29 Investments. 

Norton Rose Fulbright advised SCF, including partner Brian Fenske and associate Rishika Sengupta. B-29 used McGuireWoods partner Jay Hughes and Commando tapped BoyarMiller partner Steve Kesten. B-29’s general counsel is Duncan Simpson.

Commando founder and CEO Joe Boyd said in a statement that the company aims to align its technology with its customers’ ever-growing drive to gain efficiencies as they implement more aggressive downhole-designs.

SCF Ventures is the early stage investment unit of Houston-based SCF Partners, a private equity firm led by L.E. Simmons focused on providing capital to emerging companies so they can develop new products and technologies in the energy services sector. 

The firm has completed more than 400 energy services investments and helped build 17 public companies in its nearly 30-year history. Its current investments include Nine Energy Service, Select Energy Services, Forum Energy Technologies, NESR and Centurion Group.

Dallas-based B-29 is a 20-year-old private equity firm focused on making investments in the oil and gas industry.

Willkie Farr represents Houston Energy on Gulf of Mexico deepwater venture

Willkie Farr & Gallagher said it represented Houston Energy on a strategic agreement with an unnamed private equity firm for deepwater Gulf of Mexico non-operated exploration projects.

The group included partners Cody Carper, Michael Piazza and Robert Jacobson. Height Capital Markets director Jordan Davis in Houston was Houston Energy’s financial advisor.

Houston Energy co-founder and co-owner Ron Neal said in a statement that with an increasingly competitive environment in the deepwater, the new venture will allow the company to be a stronger non-operating partner and keep a larger ownership position in its exploration projects. 

Houston Energy explores the offshore Gulf of Mexico, South Louisiana and Texas Gulf Coast. It was formed in 1988 by Neal and Frank W. Harrison III.

Kirkland, T&K advise on Pearl-backed Red Wolf’s acreage acquisition

Kirkland & Ellis said it advised Red Wolf Natural Resources, a newly formed oil and gas company backed by Pearl Energy Investments, on its acquisition of 56,000 net acres and associated production in Oklahoma’s Scoop, Stack and Merge plays and the broader Anadarko Basin.

The seller and terms weren’t disclosed.

The Kirkland team was led by corporate partners Kevin Crews, Thomas Laughlin and Kimberly Perdue; tax partners David Wheat and Lane Morgan; and environmental transactions partner Paul Tanaka.

Thompson & Knight represented Pearl on both the acquisition and the investment, including Holt Foster, Hunter White, Kelsie Haaland, Ashley Phillips, Brandon Bloom, Marc Lombardi, Nick McTyre, Tony Campiti, Jason Loden and Jessica Hammons.

The acquisition enables Red Wolf to reenter the plays, which the company said has multiple benches of stacked “pay,” or oil and gas pockets, that provide compelling economic returns and repeatable results.

Red Wolf’s founders, led by CEO Drew Deaton and COO Jeff Dahlberg, have acquired, developed and sold oil and gas exploration and production assets across the U.S. They most recently worked in the Denver-Julesburg Basin in Colorado and the Anadarko Basin in Oklahoma, having previously been at Ward Energy Partners.

Stewart Coleman led the investment from Dallas-based Pearl, which has $1.2 billion in committed capital under management. Led by former NGP managing partner Billy Quinn, the firm typically targets investments valued at $25 million to $100 million.

Haynes and Boone advises Juniper on Metal investment

Metal Resources Holdings, the Hinsdale, Illinois, parent of Andes Coil Processors and MRI Steel Framing, announced a growth capital investment from Juniper Capital Management in Dallas and Bluehenge Capital Partners in Baton Rouge.

Haynes and Boone advised Juniper with a team led by Dallas partner John McGowan.

Andes is an independent toll processor operating in Lewisville, Texas, Dallas and Gary, Ind. It provides toll steel coil slitting and cut-to-length processing and receiving, warehousing and shipping services for steel distributors and manufacturers.

MRI Steel Framing makes heavy-duty, cold-formed steel framing components for the commercial and multifamily construction markets in the north central U.S. It shares the Gary facility with Andes.

Metal Resources’ management will remain in place, including CEO Bill Wilson, COO Frank Eberwein and CFO Howard Pena.

Juniper is led by former Grant Thornton COO Lou Grabowsky and his son Bryan Grabowsky.

CAPITAL MARKETS

Baker Botts advises Waste Management on $257M cash tender offer

Baker Botts said it advised trash services provider Waste Management Inc. on the expiration and final results of its cash tender offer of senior notes, which amounted to $257 million.

The Baker Botts team, all from Houston, included partners Jason Rocha , Gene Oshman and Justin Hoffman as well as associates Jude Dworaczyk, Gita Pathak, and Jack Chadderdon.

Gibson Dunn and Crutcher represented the dealer managers with a team led by Houston partner Hillary Holmes, which also included Houston associates Harrison Tucker and Melissa Pick and an associate in New York.

Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were dealer managers for the tender. Global Bondholder Services Corp. was the depositary and information agent.

Waste Management said it executed the tender offer to reduce its future debt obligations.

Note: The item above has been updated and corrected to include the role of Baker Botts in the transaction.

Gibson Dunn assists Gran Tierra Energy on $300M senior notes offering

Gibson Dunn also said it assisted Gran Tierra Energy on its $300 million senior notes offering.

Hillary Holmes also led the team along with Houston partner Shalla Prichard and Houston associates Jordan Rex and Justine Robinson and associates in California and Singapore. Houston partner James Chenoweth advised on tax aspects.

Davis Polk & Wardwell counseled the initial purchasers out of New York.

The offering involved 7.750% senior notes due 2027. They will be guaranteed by units of Gran Tierra that guarantee its revolving credit facility. 

The company plans to use the $289.2 million in net proceeds to repay the outstanding amounts borrowed under its senior secured revolver and for capital expenditures and general corporate purposes, which may include capital to appraise and develop exploration discoveries, repayment of other debt, working capital and/or acquisitions.

Gibson Dunn helps U.S. Well Services on its $55M sale of preferred stock

Gibson Dunn also said it advised U.S. Well Services Inc. on its $55 million sale of newly issued convertible preferred stock. 

Again, Hillary Holmes led the group as well along with Shalla Prichard. Helping were Dallas/Houston associate Whitney Bosworth, Houston associate Monika Kluziak, Dallas associate Louis Matthews, Houston associate Melissa Pick and Houston associate Justine Robinson. James Chenoweth also pitched in on tax.

Vinson & Elkins said it advised Crestview Partners on its investment in the convertible preferred stock. That team was led by partners James Garrett and Ramey Layne with assistance from senior associate Crosby Scofield and associates McCall Grimes and Luke Thomas. Partner Lina Dimachkieh provided tax advice.

U.S. Well Services CFO Kyle O’Neill said in a statement that the transaction – along with the company’s recent closing of its $75 million asset-backed revolver and $250 million senior secured term loan – further improves the company’s balance sheet strength and liquidity and enhances its ability to execute on growth initiatives for its contract-driven electric fracturing fleet.

At closing, investors were expected to receive 55,000 shares of newly issued convertible preferred stock that have a $1,000 liquidation preference per share and are redeemable at the company’s option for cash or common stock. 

The preferred stockholders will receive dividends on the liquidation preference at an annual rate of 12% in cash or stock at the company’s election, increasing to 16% in year three if the preferred shares haven’t been redeemed. The investors also will receive 2.9 million warrants, which are exercisable into common stock at $7.66 per share.

CEO and president Joel Broussard said the financing enables the company to capture the growing demand for its electric frac fleets through new customer contract opportunities.

UPDATE/OTHER:

Midland-based Rattler Midstream Partners raised $665 million in its initial public offering last week. It priced 38 million shares at $17.50 each, versus an expected 33 million shares at $16 to $19 apiece. The offering is expected to close May 28. As The Texas Lawbook previously reported, Latham & Watkins advised the underwriters with a group led by partners Michael Chambers and John Greer. Rattler was formed by Diamondback Energy Inc. to own, operate and acquire midstream assets in parts of the Permian Basin. 

***

Bracewell said May 23 it represented Texas Microgrid on the project financing for a first-of-its-kind distributed generation portfolio project.

The team was mostly in New York but included partners Whit Swift in Austin on environmental and Scott C. Sanders in Houston on employee benefits and executive compensation; and corporate associates Jason W. Keating, Melanie C. Goebel and Shannon M. Rice, all of Houston.

Texas Microgrid is a joint venture indirectly owned by investors managed by Basalt Infrastructure Partners and Enchanted Rock Holdings. It plans to build and operate natural gas-fired and ultra-clean distributed natural gas microgrids within the Electric Reliability Council of Texas, or ERCOT, service territory. 

When fully built-out, the portfolio will total up to 232 megawatts of generating capacity.

Bracewell said it assisted Texas Microgrid with commercial contract negotiations, regulatory approvals and all financing documentation. 

The financing was provided by ING Capital, which is serving as administrative agent for the credit facilities, with the Bank of New York Mellon serving as collateral agent and depositary bank. Enchanted Rock will be the construction, operations and asset manager. 

The distributable generation units are being used to provide emergency back-up power to commercial and industrial customers operating in various sectors, including cold storage, food and beverage, manufacturing and healthcare. 

They also will be used to offset peak demand charges during the summer in ERCOT and are permitted to participate in ERCOT’s Emergency Response Service auctions.

***

The rumor mill busily churned this past week. 

On the energy-related front, Reuters reported that Carlyle Group is in talks to sell a 25% stake in its Corpus Christi crude oil export terminal for $625 million to three unidentified companies that would operate an affiliate pipeline (a Carlyle principal didn’t respond to a request for comment). 

Bloomberg also reported that the Blackstone Group, Whiting Petroleum and Callon Petroleum are among those expressing interest in buying publicly traded QEP Resources, which has been under pressure from activist investor Elliott Management to sell itself; that Gainesville water services provider Select Energy Services Inc. is in the early stages of considering a sale; and that Exxon Mobil’s divestiture of some of its Gulf of Mexico assets are drawing interest from Repsol and Ineos Group Holdings and could fetch $1.5 billion.

Meanwhile, Buyouts is reporting that the sale of Omnitracs, which is backed by Vista Equity Partners, has hit the second round with a handful of private equity firms, including Goldman Sachs, in the bidding (Vista is run by Austin billionaire Robert Smith, who recently announced he would pay off the student loans of 400 graduates from Morehouse College). And two of Kona Grill’s former CEOs reportedly have teamed up to bid on the bankrupt chain.

***

Other deal news of note: Privately held 1776 Energy Operators told Reuters that it would put itself up for sale after sources familiar with the South Texas-focused oil and gas producer said they expected it to be worth around $1.5 billion, including debt. 

The Houston firm, which was founded by oilman William R. Huff, has hired two unnamed investment banks to run a sale process. Its properties are near the operations of Marathon Oil Corp, Devon Energy Corp., Magnolia Oil & Gas Corp. and EOG Resources Inc. 

Private equity-backed companies also could be bidders, including Warburg Pincus’ Ensign Natural Resources, which recently agreed to buy Eagle Ford properties owned by Pioneer Natural Resources. Pioneer said May 6 that it’s now looking to sell its 27% stake in Midland Basin gas processing infrastructure operated by Targa Resources.

***

Finally, Talos Energy CEO Tim Duncan said at a petroleum negotiators conference last week that the company is interested in Anadarko Petroleum’s Gulf of Mexico properties if its would-be buyer Occidental Petroleum decides to sell them. It’s also looking at other offshore basins where it can put its expertise to use. Talos’ general counsel is Bill Moss, a former partner at Mayer Brown in Houston.

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