This past week was a busy time for global M&A, with four major deals announced over three days worth more than $51.6 billion. One of those deals — Barrick Gold’s $6 billion purchase of fellow miner Randgold Resources – had a Texas lawyer on the deal team.
In fact, global M&A activity hit a new high in the first nine months of the year reaching $3.3 trillion in value, 39 percent higher than the same period last year, according to a report in the Financial Times.
Activity may be slowing, however. Global deals of $783 billion in the third quarter were 35 percent lower than second quarter, according to Reuters, which chalks it up to worries over a possible U.S. trade war with China.
Interestingly, the U.S. M&A market fared better than other regions, rising 14 percent in the third quarter year-over-year to $368.1 billion versus a 14 percent easing in Europe and a 38 percent drop in the Asia-Pacific sector.
Texas lawyers are seeing decent activity. Last week, 11 firms and 61 lawyers worked on 18 transactions worth $9.3 billion, up from the 13 deals logged the previous week valued at $7 billion.
Still, nothing has come close to the first week of August, when there were 16 transactions worth $68.6 billion – a weekly record for the year thanks to Energy Transfer Equity’s $62 billion purchase of affiliate Energy Transfer Partners. The previous record was hit in January at $16.5 billion, so last week’s $9.3 billion is getting closer to that figure.
There were four capital markets transactions during the week valued at $2 billion and 14 M&A/private equity/venture capital deals worth $7.3 billion. See what Texas lawyers have been up to below.
Norton Rose advises on Barrick’s $6B buy of Randgold
Canada’s Barrick Gold Corp. announced Sept. 24 that it agreed to buy Randgold Resources Ltd. for $6 billion in stock.
Mostly Canadian law firms were involved in the deal. But the Norton Rose Fulbright team for Randgold included Dallas tax partner Todd Schroeder.
Davies Ward Phillips & Vineberg, Freshfields Bruckhaus Deringer, Cravath, Swaine & Moore and Carey Olsen were Barrick’s legal advisers. Stikeman Elliott and Ogier also advised Randgold.
Barrick said the merger will create an industry-leading gold company with the greatest concentration of top-tier gold assets. It said superior operating metrics – including the highest adjusted EBITDA margin and the lowest total cash cost position among top gold peers – will support sustainable investment in growth and shareholder returns.
Each Randgold shareholder will receive 6.1280 new Barrick shares for each Randgold share. Barrick shareholders will end up with 66.6 percent of the combination and Randgold shareholders will hold 33.4 percent.
Barrick chairman John Thornton will remain chairman and Randgold CEO Mark Bristow will become CEO. Two-thirds of its board members will come from Barrick and one-third from Randgold.
The merger has to clear regulators and both sets of shareholders and is expected to close in the first quarter of next year. The combination will trade on the New York and Toronto stock exchanges.
V&E advises underwriters on National Retail Properties’ $700M offering
Vinson & Elkins said Sept. 27 it was underwriters’ counsel on National Retail Properties Inc.’s $700 million notes offering.
The V&E corporate team was led in part by partner David Stone in Houston with other members working out of New York, Washington, D.C., and Richmond, Va.
Pillsbury’s Washington office counseled the underwriters, which included Citigroup, Merrill Lynch, Wells Fargo, Morgan Stanley, U.S. Bancorp, Jefferies, RBC Capital Markets and SunTrust Robinson Humphrey.
The offering included $400 million in 4.300 percent senior unsecured notes due 2028 and $300 million in 4.800 percent senior unsecured notes due 2048.
Orlando, Fla.-based National Retail Properties plans to use the net proceeds to repay all of the outstanding debt under its credit facility, redeem all of its outstanding 5.500 percent notes due 2021 and fund future property acquisitions and for general corporate purposes.
Gibson aids Core on $525M purchase by Keurig Dr Pepper
Gibson, Dunn & Crutcher said Sept. 27 it represented Whipstitch Capital-based Core Nutrition on its acquisition by Keurig Dr Pepper for $525 million.
The Gibson Dunn team was mostly in California but included tax partner David Sinak and tax associate Michael Cannon in Dallas.
Skadden, Arps, Slate, Meagher & Flom in New York represented Keurig Dr Pepper, whose financial advisor was Evercore.
Keurig Dr Pepper, or KDP, said the deal is worth $435 million net of expected tax benefits.
Founded in 2015, Core’s product portfolio includes nutrient-enhanced bottled water Core Hydration and organic enhanced fruit hydration Core Organic, both of which are distributed by KDP. Net sales, which reached $200 million in the past year, have grown at an average annualized rate of 115 percent over the past three years, KDP said.
KDP expects the transaction to be neutral to its adjusted diluted earnings per share in 2019 and accretive after that. CEO Bob Gamgort said the company intends to realize the full growth potential for Core Nutrition, whose founder is Lance Collins.
Keurig bought Dallas-based Dr Pepper earlier this year for $18.7 billion along with the remaining shares of Austin-based Big Red for $200 million.
Dr Pepper general counsel Jim Baldwin was named chief legal officer and general counsel for KDP in June.
Baker Botts represents Tallgrass on $500M notes offering
Baker Botts said Sept. 24 it represented Tallgrass Energy LP on a $500 million notes offering.
The team included Austin partner Mollie Duckworth, Houston partner Dan Tristan, Austin senior associate Courtney Fore, Austin associates Allison Lancaster and Leah Leipold and Austin tax partner Jon Nelsen.
Vinson & Elkins represented the initial purchasers, including partners Michael Harrington and Sarah Morgan.
The offering involves 4.750 percent senior unsecured notes due 2023 by two Tallgrass entities. Tallgrass plans to use the net proceeds to repay outstanding borrowings under its senior secured revolver.
Tallgrass has enjoyed some recent credit ratings momentum, including positive reports from S&P and Fitch, and is using the momentum to term out debt at a reasonable cost, Seaport Global Securities analysts said in a recent report.
DLA counsels SolarWinds on proposed $500M IPO
SolarWinds, an Austin-based IT management software provider, filed for a $500 million initial public offering on Sept. 21 with the Securities and Exchange Commission.
DLA Piper partner John J. Gilluly in Austin is advising SolarWinds, which was taken private three years ago by Thoma Bravo Funds and Silver Lake in a $4.5 billion deal.
SolarWinds’ general counsel is Jason Bliss, who was an associate at DLA before joining SolarWinds as assistant general counsel in 2008. He earned his law degree from Duke University.
Davis Polk & Wardwell in Meno Park, Calif., is counseling the underwriters, which include Goldman Sachs, J.P. Morgan, Morgan Stanley, Credit Suisse, BofA Merrill Lynch, Barclays, Citi, Evercore ISI, Jefferies, Macquarie, Nomura and RBC Capital Markets.
SolarWinds lost $83.9 million on sales of $728 million last year and another $86.9 million on sales of $398.6 million in the first half of this year.
The company aims to trade on the New York Stock Exchange under the symbol SWI.
T&K, V&E aid on Basic Energy’s $300M notes offering
Basic Energy Services Inc. of Fort Worth said Sept. 25 it priced its previously announced offering of $300 million in 10.75 percent senior secured notes.
According to filings with the Securities and Exchange Commission, Thompson & Knight partner Wesley Williams advised Basic while Vinson & Elkins partners David Stone and Thomas Zentner advised initial purchaser Merrill Lynch.
The offering is expected to close Oct. 2.
The notes will mature on Oct. 15, 2023 and be secured, senior obligations of the company, Basic said. Interest will be payable semi-annually in arrears.
The notes will be guaranteed on a senior secured basis by Basic’s subsidiaries and initially be secured by a first-priority lien on almost all of the assets of the company and the subsidiary guarantors other than accounts receivable, inventory and certain related assets.
Basic plans to use the net proceeds to repay its debt under its term loan and its outstanding borrowings under its asset-based secured revolver and for general corporate purposes.
On Sept. 24 Basic turned down a $9.80 per share buyout offer from Key Energy Services, which asked it to suspend the pricing of the offering so the two could negotiate a merger deal. Key said the notes could be detrimental to their combination.
Cimpress buys BuildASign for $280M
Dutch investor Cimpress NV said Sept. 25 that it agreed to buy BuildASign of Austin for $280 million in cash.
DLA Piper advised Cimpress while Latham & Watkins assisted BuildASign, both with lawyers outside of Texas.
BuildASign general counsel Joe Licata, who is also the company’s COO, worked on the deal in-house. The company is backed by PWP Growth Equity, the middle market private equity group of Perella Weinberg Partners.
Founded in 2005, BuildASign is an internet-based provider of canvas-print wall decor, business signage and large-format printed products. It has 400 employees.
Cimpress, which is led by CEO Robert Keane, invests in and builds customer-focused mass-customization businesses. Its brands include National Pen and Vistaprint.
BuildASign generated sales of $129 million for the 12 months ending Aug. 31, reflecting year-over-year growth of more than 20 percent, Cimpress said.
Cimpress said the deal reflects unlevered free cash flow and adjusted EBITDA multiples consistent with those it paid for its acquisitions of National Pen and “upload and print” businesses, after considering growth rates.
The deal has to clear regulators but is expected to close this month.
Westlake offers to buy Nakan compounding solutions business for $265M
Westlake Chemical Corp. of Houston said Sept. 25 it offered to buy French compounding solutions provider Nakan from Los Angeles backer OpenGate Capital for $265 million.
Westlake general counsel L. Benjamin Ederington didn’t respond requests for outside and in-house legal counsel on the deal.
Ederington joined Westlake in 2013 after holding various senior legal positions at LyondellBasell Industries and its predecessor company Lyondell Chemical Co. The Harvard-trained lawyer began his legal career at Steptoe & Johnson after clerking for the Hon. Benson Legg, the retired chief judge of the U.S. District Court in Maryland.
Nakan has production facilities in China, France, Germany, Italy, Japan, Mexico, Spain and Vietnam, a research facility in France and an application laboratory in the U.S. Its products are used in the automotive, building and construction and medical industries. It generated around $300 million of revenue in the most recent twelve-month period.
Westlake CEO Albert Chao said the combination of Nakan with Westlake’s compounding business will present an excellent strategic fit, allow Westlake to expand its compounding business globally and add important specialty products and technology to its portfolio.
The transaction has to clear regulators and employee consultation procedures and is expected to close by early 2019.
Jones Day advises Mill Creek on $69M sale of apartments to Rise
Jones Day said Sept. 26 that Dallas partner Susan Cox advised Mill Creek Residential Trust on its $69 million sale of the 135-unit Modera Capitol Hill Apartments in Seattle to Rise Properties Trust.
Jameson Babbitt Stites & Lombard in Seattle counseled Rise.
The deal, announced Aug. 13, is Rise’s second apartment complex purchase in Seattle’s Capitol Hill neighborhood as part of a joint venture with Cigna Investment Management. It’s also its 13th local acquisition.
Mill Creek executive Sean Hyatt told The Registry that the deal was a one-off market transaction and that company is still dedicated to the Seattle market.
Bracewell, Latham aid on Brookfield’s $65.5M Landmark deal
Bracewell said Sept. 28 that it represented an affiliate of Brookfield Asset Management Inc. on a strategic investment with Landmark Infrastructure Partners to form a joint venture to invest in infrastructure assets.
The team was mostly in New York but included partners Christopher D. Olive in Dallas, Aaron P. Roffwarg in Houston and Tony L. Visage in Houston.
Also pitching in were counsel Tamara L. McKinzie in Houston; associates Sidney Nuñez, Kristen A. Wong, Caitlyn N. Dockendorf, Jackie Z. Coleman, Shannon M. Rice, Jordan T. Kindred, Shannon I. Lindamood and Austin J. Muck in Houston; and associates Christie L. Latimer, Andrea Broyles, Cheyenne J Pate, Nigel Wheeler, Clark A. Donat, Douglas F. Monkhouse and Geren Brown in Dallas.
Latham & Watkins represented Landmark with a team mostly in the firm’s Orange County office but with Houston assistance from partner John Greer and associate Kevin Richardson on corporate matters and associate Jared Grimley on tax.
Landmark contributed assets in the transaction, including associated debt, in exchange for a 50 percent interest in the joint venture and $65.5 million in cash.
Landmark is expected to use the proceeds to cut debt and reinvest in assets in its primary industries through its acquisition and development activities.
The 115-year-old Brookfield is a top global alternative asset manager with $285 billion in assets under management. It focuses on real estate, renewable power, infrastructure and private equity.
W&T Offshore to divest select Permian interests for $56.8M
W&T Offshore Inc. said Sept. 25 it agreed to sell overriding royalty interests in the Permian Basin to an unnamed buyer for $56.8 million. The transaction is expected to close by October.
A company spokeswoman said the sale was handled in-house.
W&T Offshore’s general counsel is Shahid Ghauri, who previously was a partner at Jones Walker and assistant general counsel of BHP Billiton Petroleum. Before earning his law degree from the University of Houston Law Center, Ghauri was employed as a wireline logging engineer for Schlumberger.
CEO Tracy Krohn said in a statement that the divestiture of the non-core, non-operated onshore asset will enhance its cash position as it optimizes its balance sheet for growth.
The company focuses on the Gulf of Mexico. It has working interests in 48 producing fields in federal and state waters and 650,000 gross acres under lease, including 440,000 gross acres on the Gulf of Mexico Shelf and 210,000 gross acres in the deepwater.
WildHorse Resource adds Eagle Ford acreage for $43M
WildHorse Resource Development said Sept. 20 it bought 20,000 acres in Texas’ Eagle Ford and Austin Chalk shale plays from an unnamed seller for $43 million.
WildHorse’s outside counsel couldn’t be determined by press time and its general counsel Kyle Roane didn’t respond to requests for comment.
The University of Houston-trained lawyer joined Houston-based WildHorse in 2016 after a stint at Memorial Resource Development Corp., which was purchased by Range Resources Corp. in 2016 for $3.3 billion. Before that he practiced at Akin Gump Strauss Hauer & Feld for seven years.
WildHorse, which is led by CEO Jay Graham, is spending $75 million to build a sand mine in the area to provide proppant for hydraulic fracturing and $50 million on oil and produced water gathering pipelines to support its production.
Analysts at Seaport Global Securities said last week that the deal, which came at an attractive $1,300 per acre, is the kind of opportunity WildHorse is interested in: consolidating high-return oily acreage in its dominant East Texas Eagle Ford play at attractive prices.
“Reading between the lines here, we think management spelled out that a bid for something like Penn Virginia, which has been rumored since the appearance of an Aug. 30 Bloomberg article, would be completely inconsistent with its approach,” they said.
Bloomberg reported that Houston-based Hilcorp was another potential bidder for Penn Virginia, which had hired Jefferies & Co. to advise it.
Data.world raises $12M from Workday, AP, OurCrowd
Austin-based Data.world said Sept. 26 it raised $12 milllion in third-round investment from Workday Ventures, the Associated Press and OurCrowd.
The round, which was oversubscribed, brought its total funding to $45.3 million since its 2016 launch.
General counsel Ariane Chan handled the deal in-house. Before joining the company in 2016, the UT law graduate was a corporate partner at DLA Piper.
Cooley counseled Workday out of the Bay Area and Israel-based OurCrowd used in-house counsel.
Data.world, which was co-founded by Brett Hurt, said the funding will support its mission to build the most meaningful, collaborative and abundant data resource in the world.
Leighanne Levensaler led the investment from Workday while Jon Medved did so from OurCrowd.
Jim Kennedy is senior VP of strategy and enterprise development at AP, which was one of its earliest customers. It used the platform to share newsworthy data sets with news outlets it serves across the U.S.
Jones Day aids Kaiser Aluminum on Imperial Machine purchase
Jones Day said Sept. 28 that Dallas partner Troy Lewis advised Kaiser Aluminum Corp. on its acquisition of Imperial Machine & Tool Co. for an undisclosed sum.
Saul Ewing represented 75-year-old Imperial Machine, a provider of multi-material additive manufacturing and machining technologies for aerospace and defense, automotive, high-tech and general industrial applications.
Foothill, Calif.-based Kaiser announced the deal Sept. 19. Chairman and CEO Jack Hockema said the acquisition brings technology and intellectual property that will broaden Kaiser’s ability to provide solutions for demanding applications in compatible end markets.
Columbia, New Jersey-based Imperial Machine has expertise in aluminum, titanium, tantalum, molybdenum, nickel alloys, tungsten, cobalt chromium and stainless steel, Kaiser said.
Jones Day aids Greystar on Ocean 650 acquisition
Jones Day said Sept. 26 that Dallas partner Susan Cox represented Greystar Real Estate Partners on its purchase of Ocean 650, a multifamiy apartment building in Revere, Mass., for an undisclosed sum.
Seller counsel’s was Kenneth F. Plifka at Stutzman, Bromberg, Esserman & Plifka in Dallas.
The deal closed Sept. 20.
Jones Day advises acquirer on purchase of PureNet
Jones Day said Sept. 28 that Dallas partner Todd Kelly counseled the unnamed Texas acquirer of PurNet Inc., a contract management and procurement solutions provider in Minnesota.
Terms weren’t disclosed. The deal closed Aug. 31. PurNet was owned by founder Darlene Vortherms, who thought there was a need for customized solutions to improve healthcare centers in acute and non-acute markets with their purchasing function and supply chain management.
Jones Day counsels acquirer of Inventory Optimization Solutions
Jones Day announced another deal it worked on Sept. 28, advising the unnamed Texas acquirer of Inventory Optimization Solutions of California for an undisclosed sum.
Dallas partner Todd Kelly led the deal team on that transaction as well. The acquisition closed Sept. 18.
V&E, Kirkland, T&K advise on Roan/Linn Energy reorganization
Vinson & Elkins said Sept. 24 it advised Roan Resources Inc. in connection with the reorganization agreement entered into on Sept. 17 between Roan Holdings LLC and Linn Energy Inc.
As a result of the transactions, Roan Resources Inc. has consolidated 100 percent of the equity interest in Roan Resources LLC through its wholly owned subsidiaries.
The V&E corporate team was led by partner Alan Beck with assistance from counsel James Brown and associates Anne Peetz, Alex Lewis and Andrianna Frinzi.
Also advising were partner Lina Dimachkieh (tax); partner Stephen Jacobson and associate Gina Hancock (executive compensation/benefits); and partner Guy Gribov and associate Jason Blackmer (finance).
According to a filing with the Securities and Exchange Commission, Linn Energy general counsel Holly Anderson led the company’s in-house legal team.
Kirkland & Ellis represented Linn, including partners Andrew Calder, Julian Seiguer and Kim Hicks. Thompson & Knight partner Tim Samson in Houston counseled Roan Holdings.
Linn and Roan Holdings agreed to combine their 50 percent equity interests in Roan Resources into a publicly traded company Roan Resources Inc. as part of a master reorganization agreement.
Roan management, including CEO and president Tony Maranto, will continue to lead the company.
The company is focused on the Scoop and Stack plays in Oklahoma’s Anadarko Basin, where it holds 150,000 net acres and produces 50,000 barrels of oil equivalent per day.
Roan Resources’ Class A common stock began trading on the OTCQB Market, where Linn’s Class A common stock ceased trading. The companies plan for Roan Resources to be uplisted to the New York Stock Exchange in the fourth quarter.
Roan Resources was formed in 2017 by Linn and JVL Advisors-backed Citizen Energy II.