The Texas Lawbook

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CDT Roundup: 19 Deals, 14 Firms, 55 Lawyers, $4.3B

One lawyer calls it the conference for M&A nerds; another says it’s for transaction geeks. 

However you want to call it, the University of Texas School of Law’s Mergers and Acquisitions Institute attracts several hundred lawyers each October to Dallas’ swanky Ritz-Carlton to hear about the latest trends in transaction making while earning those all-important continuing legal education hours before year-end.

In between whiskey tastings and Bloody Mary’s, popular topics this year included reps and warranties insurance, an industry that has grown to around 24 carriers versus less than a handful a few years ago. 

“Reps and warranties insurance has become extremely common in middle market and private equity deals, with sole recourse for the buyer also becoming more and more common,” Gibson Dunn partner Rob Little said on a panel.

Jones Day partner Alain Dermarkar said attorneys still need to pay attention to indemnity clauses “even with reps and warranties insurance” while Katten partner Mark Solomon thinks rates for the insurance may go up if companies begin to underperform and go into default. 

“Reps and warranties insurance is the biggest thing in our industry and affects how we negotiate and puts a focus on due diligence,” he said. “While it’s made it easier to get deals done, no one seems to be worried, saying there’s a lot of dry powder. I’m worried.”

There also was talk of companies’ usage of non-GAAP financial results creating problems between buyers and sellers (“We’re seeing that more and more,” Munsch partner Rob Kibby noted) and buyers trying to use privileged emails against sellers in disputes after deals close (Baker Botts partner Samantha Hale Crispin said Delaware courts have found that “privilege goes to the target” unless otherwise specified in the contract).

Panelists also noted rule changes by CFIUS, or the Committee on Foreign Investment in the U.S., including mandatory filings if the transaction involves critical technology and much higher penalties if companies don’t file at all. 

There also was a panel that talked about digital health care and the increase in such deals (“Venture investment has doubled and we have a lot of clients looking to exit,” Wilson Sonsoni partner Scott Craig said) and the patient privacy issues and regulatory challenges they encounter (“It’s harder than it looks,” McDermott partner Joanna Lin commented).

There also was discussion about possible conflict-of-interest in transactions (using a questionnaire can catch problems early on, including coverage of possible shared charitable activities); and continuing gender bias despite clients’ demands for diversity (half of law school graduates are women but only 20% of law firm partners are female, for example). 

“You’d be surprised that some firms come to meet us with all men,” AT&T associate general counsel Tamera Woodard said.

What could derail the M&A train, which has been running pretty steadily along with the longest economic expansion in history? Panelists noted continuing trade disputes with China, a possible impeachment of President Trump and higher tax rates if a different administration is elected into office next year.

Rick Lacher, an investment banker at Houlihan & Lokey in Dallas, is optimistic given that there’s still a lot of liquidity in the market from private equity, corporations, family offices and nonbank financial sources. “It won’t return to 2008,” he said. “Hopefully it will be more of a pause than a melt-down.”

Michael Saslaw, a partner at Vinson & Elkins in Dallas, said M&A activity this year has been softer than in 2018 but dealmaking will continue as long as there are multiple bidders for targets. “If the performance of companies falls off and valuations are lower, the seller may have to take less money,” he said. 

There also was a panel on the oil and gas industry – “the least popular person at the dance” given its low free cash flow generation and high leverage – and none of the participants would hazard a guess as to when the sector might turn around. 

“It’s hard to go to an investment committee and say, ‘Let’s invest in energy,’” NGP general counsel Jeff Zlotky said. “The political headwinds for energy and private equity are not too good right now. And it’s not a seller’s market like the rest of the M&A market.”

Sidley Austin partner Cliff Vrielink said that during the shale boom, a lot of people made a lot of money quickly. “But it’s a highly capital-intensive industry,” he said. “Now Wall Street is asking, ‘Can you do it better?’ There’s a race to quality.”

Raymond James investment banker Carla Tharp said there’s more appetite for strategic M&A than asset deals, but Wall Street still frowns on it. “They say they want consolidation, but then they throw up all over deals,” she said. “And they like oilfield services deals even less.”

The panel agreed that water services and minerals deals have been hot, mostly due to demand for the former and stable cash flows of the latter. Also popular have been transactions involving special purpose acquisition companies, mergers of portfolio companies under a single private equity holder and joint ventures that pair capital with drilling prospects. 

But Zlotky said affiliated company mergers are difficult for those being rolled up into a different management team. “That’s a tough discussion to have,” he said.

Meanwhile, Texas lawyers were relatively busy this past week, working on 19 transactions valued at $4.3 billion. That compares with 18 transactions valued at $14.5 billion the week before and 29 transactions worth $3.1 billion at this 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 CountCapM Value $M
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

There were 16 M&A/private equity/venture capital deals valued at $3.8 billion and three capital markets/financing transactions worth $500 million. Fourteen law firms and 55 Texas lawyers were involved in the activity.

M&A/PRIVATE EQUITY/VENTURE CAPITAL

AT&T sells Latam operations to Liberty for $1.95B

In a move that will likely appease activist investors, Dallas-based AT&T announced Oct. 9 that it planned to sell its wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands to billionaire John Malone’s Liberty Latin America for $1.95 billion.

Charles M. Nalbone in Atlanta led the deal in-house at AT&T, whose general counsel is David McAtee. The company’s outside transactional counsel was Kilpatrick Townsend with attorneys out of Atlanta led by Joel Cartee.

The buyer’s in-house legal counsel was Liberty Latin America chief legal officer John Winter and senior counsel Erik Estrada in Denver and Liberty Cablevision of Puerto Rico general counsel Carla Framil and corporate counsel Luis Mendez.

Liberty Latin America’s outside counsel included Dorsey & Whitney, with attorneys out of London, Denver and Anchorage; Nelson Mullins out of Washington, D.C.; and Martinez Law’s Omar Martinez out of Houston.

The transaction includes network assets (including spectrum), real estate and leases; customers (including 1.1 million wireless subscribers); and contracts. When the deal closes, around 1,300 AT&T employees will move to Liberty Latin America. 

“The combination of AT&T’s leading mobile and wired businesses with Liberty Puerto Rico’s leading high-speed broadband and TV business will create a strong and competitive integrated communications player,” Liberty Latin America CEO and president Balan Nair said in a statement. “We are focused on investing in digital infrastructure, innovation and 5G networks.”

The transaction has to clear the Federal Communications Commission and the Department of Justice but is expected to close within six to nine months.  

AT&T has been selling assets to reduce its heavy debt load, some of which was taken on to purchase Time Warner last year for more than $80 billion. It recently sold its 9.5% stake in Hulu back to the streaming video service for $1.43 billion.

To reach its de-leveraging goal, AT&T said it plans to use free cash flow after dividends and continue monetization initiatives. It’s already surpassed its monetization goal of a net $6 billion to $8 billion this year with $11 billion worth of completed or announced asset sales.

AT&T said shareholders should expect that share buybacks will be in the mix in the fourth quarter along with debt repayment.

Activist investor Elliott Management announced in early September that it had amassed a $3.2 billion stake in AT&T and called for the company to sell off parts of its business, including the Latin American wireless operations and DirecTV, as well as make management changes to boost its stock price.

Sidley, V&E advise on Drunk Elephant’s $845M sale to Shiseido

Japan’s Shiseido Co. said Oct. 8 that its unit Shiseido Americas Corp. agreed to buy VMG-backed Drunk Elephant for $845 million to strengthen its leadership in the prestige skincare market.

Sidley Austin said it represented Drunk Elephant Holdings with Texas team members including partner and co-lead Mark Metts and associate Katy Lukaszewski. The other members of the group were in Century City.

Vinson & Elkins advised Drunk Elephant founder Tiffany Masterson and a consortium of majority equity holders. 

That team was led by partner Keith Fullenweider with assistance from senior associate Claire Campbell and associates Sara Bloom and Maggie Webber. Advising on tax matters were partner John Lynch and associate Liz Snyder and assisting on employment matters were partners Shane Tucker and Sean Becker with assistance from counsel Regina Ibarra and senior associate Christie Alcalá.

Jones Day was Shiseido Americas’ legal counsel, including Brian West Easley, Ryan T. Dzermiecki, Erin S. de la Mare and Diana Y. Defino.

Jefferies provided Shiseido Americas with financial advice while Drunk Elephant used Financo (Vennette Ho, Mackenzie Moore and Kevin Kim) and Moelis (Tarik Rguem, Emily Smith, Janet Park, Jean-Marie Gianni and Andrew Shore).

Drunk Elephant was founded in 2012 by Tiffany Masterson as a brand that benefits the skin’s health. Masterson is staying on as chief creative director and president, reporting to Shiseido Americas CEO Marc Rey.

The transaction has to clear regulators but is expected to close before year-end.

T&K, Locke Lord work on Tailwater’s $500M investment in Goodnight Midstream 

Dallas-based Goodnight Midstream, whose $930 million sale to TPG fell apart last month, said Oct. 8 it closed a capital investment and an incremental commitment from Tailwater Capital of $500 million to expand its operations.

The energy-focused private equity firm has been an investor in Goodnight since 2016.

Goodnight general counsel Grant Adams handled the legal work in-house. 

Thompson & Knight assisted Dallas-based Tailwater, including Wes Williams, Anna Marie Dempsey, Marc Lombardi, Nathan Stone, Dasha Hodge, Tonya Maksimenko, Mitch Gibbons, Dean Hinderliter, Katie Gerber and Holt Foster. Locke Lord also counseled Tailwater, including Houston partner Eric Larson and associate Jennie Simmons.

Goodnight moves fresh water and waste water for oil and gas companies in the Bakken Shale of North Dakota, the Permian Basin of West Texas and the Eagle Ford Shale of South Texas. Its facilities and trans-basin pipeline systems in the Delaware Basin include more than 700,000 barrels per day of throughput capacity.

The Goodnight platform consists of 500 miles of produced water pipelines with 1.6 million barrels per day of throughput capacity. It said it recently signed five new long-term customer contracts in the Delaware and Bakken that will assure its eighth consecutive year of double digit volume growth on its greenfield systems.

Patrick Walker, CEO and co-founder of Goodnight, said in a statement that the investment will provide capital from a partner who understands that long-term growth requires a strong balance sheet. 

“With this capital flexibility, we will continue to meet the increasing demand from our customers for scalable produced water infrastructure solutions and remain focused on providing safe, reliable and environmentally sustainable produced water logistics services to our customers,” he said.

Tailwater co-founder Jason Downie said Goodnight’s future is bright, with co-founder and managing partner Edward Herring noting that favorable market dynamics are driving further investment in the sector and Goodnight’s customer contract wins.

Tailwater manages $3.4 billion in committed capital. Its team has executed 100 energy transactions in the upstream and midstream sectors representing $19 billion in transaction value.

RigUp attracts $300M in funding from Andreessen Horowitz

Austin-based RigUp said Oct. 10 it attracted $300 million in Series D funding from Andreessen Horowitz, bringing its total raised to date to $450 million.

Other participants included existing investors such as Founders Fund, Bedrock Capital and Quantum Energy Partners and new investors including Baillie Gifford and Brookfield Growth Partners.

Andreessen Horowitz has backed such household names as Facebook, Lyft and Pinterest.

Quantum’s in-house advisors on the funding included general counsel Jim Baird and VP Rob Meister. Lawyers in WilmerHale’s New York office represented RigUp, as they did when it raised $60 million in February that valued the company at $300 million valuation.

David George, general partner at Andreessen Horowitz who will join RigUp’s board, said the company stands alone in serving the energy labor market with technology and provides better “time-to-hire” and visibility for independent contractors searching for the right projects and energy companies looking to fill jobs with higher quality personnel.

Founded in 2014 by CEO Xuan Yong and COO Mike Witte, RigUp has 300 employees across the U.S., matching skilled contract workers with energy companies in the upstream, renewables, midstream and downstream sectors and keeping their compliance requirements up-to-date and even paying them. 

RigUp said this year it will exceed $2 billion in gross service volume on its platform, more than a 200% increase over 2018.

The company plans to use the latest investment to continue expansion into renewable energy, midstream oil and gas and downstream operations and hire at its Austin headquarters and its Denver office.

Josh Raffaelli led the deal from Brookfield Growth Partners.

SparkCognition raises $100M from March Capital, others

SparkCognition, an Austin-based automated machine learning startup, said Oct. 8 that it raised $100 million in Series C funding led by March Capital Partners.

With overall funding of $175 million since its inception in 2013, SparkCognition claims to be one of the most valuable startups in Texas and one of the most valuable artificial intelligence startups in the U.S.

SparkCognition VP of Legal Talia Jarvis handled the capital raise, tapping a Boston attorney at Greenberg Traurig as outside counsel. 

The University of Houston law graduate joined the company in December after serving as general counsel and COO of Austin-based Bedrock Funding and working as an associate at Latham & Watkins and Vinson & Elkins in Houston.

Temasek didn’t want to reveal its outside counsel. Ropes & Gray out of Boston assisted Kerogen. 

Sumant Mandal led the deal from March Capital.

Other new investors included Temasek as well as Kerogen Digital Solutions, Hearst Ventures, Dalus Capital, Sustainable Technology Ventures, Blue Horizon ex Ventures and Founders Equity Partners.

Individual investors included former Dow Chemical CEO and chairman Andrew Liveris, Paul and Ann-Kristin Achleitner, Richard and Laetitia Garriott de Cayeux and Malcolm Turnbull, former Australian prime minister and managing director of Goldman Sachs Australia.

Existing investors who participated in the round included Boeing’s HorizonX unit; John Chambers, former CEO and Chairman emeritus of Cisco and current founder and CEO of JC2 Ventures; John Thornton, former president of Goldman Sachs; MSD Capital, the private investment fund of Michael S. Dell and family; Pankaj Patel, former EVP and chief development officer of Cisco; and Alameda Ventures.

SparkCognition builds artificial intelligence technology for industrial applications, including oil and gas, defense, utilities, aviation and financial services. It has partnerships and engagements with Boeing, Hitachi High-Technologies and Aker BP. 

The company recently partnered with Boeing to form SkyGrid, a joint venture focused on delivering unmanned aircraft system traffic management solutions through the use of AI and blockchain technologies.

Winston advises Ducommun on $77M purchase of Nobles Worldwide

Winston & Strawn said it represented Ducommun Inc. on its $77 million cash acquisition of Nobles Worldwide Inc., which financed the deal with its revolver.

The Winston team was led out of Los Angeles but included partner Justin Reinus, who offices out of Los Angeles and Dallas.

Carson, Calif.-based Ducommun delivers manufacturing solutions to customers in the aerospace, defense and industrial markets, including electronic systems and structural systems.

St. Croix Falls, Wisc.-based Nobles claims to be the largest supplier of ammunition feed systems to all branches of the U.S. military and its allies.

Porter Hedges aids Synthesis on $36M purchase of Australian Future Energy

Porter Hedges said it represented Synthesis Energy Systems Inc. on its $36 million acquisition of Australian Future Energy.

The parties expect to close the transaction in the first quarter of next year.

The Porter Hedges team included partners Kevin Poli, Robert Reedy and Adam Nalley and counsel Rikiya “Riki” Thomas.

Synthesis is a Houston-based technology company focused on generating clean, high-value energy from low-cost and low-grade coal, biomass and municipal solid waste. Its proprietary technology converts these resources into a clean synthesis gas, or syngas, and methane.

Australian Future Energy is a privately owned Australian company founded to hold local resources, such as coal and biomass, for production of fuel gas and synthetic natural gas for power generation and agricultural chemicals production.

Egan Nelson aids BrainCheck on $8M fundraise

BrainCheck said last week it raised $8 million in Series A funding, with S3 Ventures and Tensility Venture Partners co-leading the round.

Egan Nelson provided outside legal counsel to BrainCheck, including Jose Ancer in Austin as well as Jay Buchanan and Ryan Sheen. DMC Law assisted S3 Ventures. 

Houston-based BrainCheck provides a platform that helps doctors track patients’ cognitive health.

V&E advises Razberi on $5.8M funding

Dallas-based Razberi Technologies announced last week that it raised $5.8 million in funding.

LiveOak Venture Partners in Austin led the investor group, which included Chartline Capital Partners and the family offices of industry leaders Ken Boyda and Jiri Modry.

Vinson & Elkins partner Paul Tobias advised Razberi, a provider of video surveillance and IoT, or Internet-of-things, solutions.

“This financing will give us the opportunity to continue to grow the business rapidly and roll-out fantastic new products in the coming year,” Razberi Doug Dickerson said in a new release.

LiveOak founding partner and Razberi board member Krishna Srinivasan said Razberi has developed a leadership position in the large and fast-growing market for IoT/video surveillance and cybersecurity.

The venture capital firm claims that its founders have helped create nearly $2 billion in enterprise value, with almost all of its investments beginning in the early stages.

Katten aids Highlander on Popular Ink sale to PPC Flexible Packaging

Dallas private equity firm Highlander Partners announced Oct. 9 that it successfully exited its investment in Popular Ink, which it sold to Morgan Stanley-backed PPC Flexible Packaging for an undisclosed sum.

Katten partners Mark Solomon and Peter Bogdanow counseled Highlander. Others on the team were Wade Glover and Jonathan Taylor on corporate matters and Aaron Pinegar on tax. Jones Day represented PPC out of Cleveland.

Mesirow Financial advised Highlander and Popular Ink on the sale.

Based in McKinney, Popular Ink produces multi-colored flexible packaging products, including gel packs, stand-up bags, pouches and stick packs. Its customers include small, fast growing food and beverage, nutraceutical and health and beauty consumer brands.

PPC creates cleanroom packaging for healthcare and medical applications, organic snack foods, produce, pet food and baked goods.

Highlander acquired a stake in the company in 2015 and partnered with founder Dru Riess to build out its management team and increase and upgrade its production capabilities, expanding revenue by 91%.

John Beckert, Highlander operating partner and lead Popular Ink director, said in a statement that he believes Buffalo Grove, Ill.-based PPC will help support Popular Ink’s continued growth.

Highlander has $2 billion in assets under management. It focuses on investments in basic manufacturing, food, chemicals, building materials and consumer products and uses a “buy and build” approach, creating value by helping companies expand organically and through acquisitions. 

V&E assists CoolSys on Building Air Services purchase

Ares Management Corp.-backed CoolSys said Oct. 9 it bought Building Air Services, or BAS, for an undisclosed sum.

Vinson & Elkins represented CoolSys with a corporate team led by partner Brittany Sakowitz with assistance from associate Kelly King. Other team members were senior associate Christie Alcalá on labor/employment, associate Gina Hancock on executive compensation/benefits and partner Lina Dimachkieh on tax.

Honigman counseled BAS out of Michigan while Aaron Copeland from Armory unit the Cosine Group in Boston provided financial advice.

Brea, Calif.-based CoolSys is led by CEO Adam Coffee and owns refrigeration and HVAC services companies around the U.S. It has 2,000 service and installation employees and 4,000 customers. 

BAS of Pinellas Park, Fla., is headed by CEO Steve Boose amd provides service and preventive maintenance for commercial air conditioning, heating, refrigeration and automated building controls. Its customers include retailers such as Dollar Tree, Petco, AutoNation, Office Depot, FedEx and GNC Live Well.

CoolSys said the deal strengthens its light commercial division and expands its presence in Florida, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Louisiana, Texas and Arizona.

Willkie Farr represents Platform Partners on Beneplace sale to EBG

Willkie Farr & Gallagher said it represented Platform Partners on its sale of Beneplace to Entertainment Benefits Group, or EBG, for an undisclosed sum.

The team was led by Houston partners Bruce Herzog and Scott Miller. 

Aventura, Fla.-based EBG, which announced the deal Oct. 8, claims it owns and operates the largest entertainment and travel benefits program in the U.S. with 40,000 organizations reaching 50 million employees, including investment partnerships with Creative Artists Agency and the Shubert Organization. 

EBG said the Beneplace acquisition is complementary to its offerings and will boost its reach and diversification with a portfolio of expanded employee perks and benefits.

Beneplace provides employee discount platforms to 9 million people at large companies and government agencies, offering such products as consumer electronics, vacations, automobiles, health and wellness, apparel, activities and other employer perks. It also specializes in delivering voluntary benefits with exclusive rates on insurance for auto and home, critical illness, dental, disability, group legal and long-term care.

EBG CEO and founder Brett Reizen will lead the expanded company with more than 550 employees and offices in Aventura, Florida, New York, Las Vegas, Orlando, Los Angeles and Glastonbury, Conn. Beneplace will maintain and expand its operations in Austin.

Littlejohn-backed Total Safety buys S&S Supplies for an undisclosed sum

Littlejohn & Co.-backed Total Safety has purchased S&S Supplies and Solutions for an undisclosed sum.

Outside legal advisors couldn’t be determined by press time. 

Total Safety’s general counsel is Joe Waiter, who joined the company in 2014 after working as in-house counsel at Ripplewood- and TPS Partners-backed Kraton Polymers, Kenda Capital-backed Enventure Global Technology and Bain Capital-backed Styron. He received his law degree from George Mason University.

Capstone Headwaters advised S&S on the sale, including managing director Tyler Comann and David Bench.

Founded in 1983, S&S supplies safety products, industrial supplies and related compliance services to the power utility, automotive, airline and energy end markets. Total Safety plans to use S&S to expand its distribution offerings. 

As a result of the deal, Total Safety reorganize around two separate business units: industrial safety services and specialty distribution, which will operate under the S&S brand.

S&S CEO Tracy Tomkovicz said in a statement that Total Safety is the right strategic partner, with president Steve Tomkovicz adding that their combined capabilities will help Total Safety expand into the power utility market. Both are staying on.

Founded in 1994 and based in Houston, Total Safety provides safety and compliance solutions for clients operating in hazardous environments. Its customer base spans the petrochemical and refining, utilities, oil and gas and other industrial sectors. 

Littlejohn is a Greenwich, Connecticut-based investment firm focused on private equity and debt investments primarily in middle market companies with $10.9 billion in regulatory assets under management.

RBD advises Olono on sale to InsightSquared

Boston sales analytics company InsightSquared acquired Olono, an Austin-based sales activity management platform, for an undisclosed sum.

S. Michael Dunn at Reier, Brunel and Dunn in Austin represented Olono. InsightSquared used Foley Hoag in Boston.

Olono attracted $8 million from backers such as ATX Venture Partners, Capital Factory, Lontra Ventures and Wildcat Venture Partners. InsightSquared has raised $50 million in venture funding.

DLA Piper advises BuildFax on sale to Verisk

DLA Piper partner Jenifer Smith advised Daily Mail and General Trust-backed BuildFax on its sale earlier this month to publicly traded data analytics provider Verisk Analytics Inc. of New Jersey for an undisclosed sum.

BuildFax’s property condition and history data is expected to enhance Verisk’s solutions, providing insurers with internal and external views of property risks and changes to buildings over time.

The Austin-based target uses building permit, contractor and inspection data to provide information about the condition of properties to some of the largest insurance and financial institutions in the world. 

The data from BuildFax is expected to enhance property analytics to Verisk unit ISO, which said it’s been using BuildFax data for years in its Roof Age tool.

“Property insurers have traditionally made underwriting decisions without important information about the condition of a building’s roof, electrical system, and plumbing,” ISO president Neil Spector said in a statement. “The data that BuildFax provides about building conditions is transforming property underwriting, both at inception and renewal.”

BuildFax president Holly Tachovsky said becoming part of the Verisk family will enable the company to augment its solutions, expand its reach and provide added value to its customers.

“The insights that BuildFax has been able to extract from building permit, contractor and inspection data will significantly expand the analytics that we can provide property insurers,” Verisk COO Mark Anquillare said. “These analytics will be able to help insurers in their continuing efforts to underwrite potential and existing customers with increased speed and precision.”

BuildFax said its database has more than 84 billion data points on commercial and residential structures.

Jackson Walker advises Dura Software on 6Connex purchase

Dura Software acquired California-based online events platform 6Connex, its second purchase in a little more than a month. Terms weren’t disclosed.

Jackson Walker advised San Antonio-based Dura, including Stephanie Chandler and Michael Laussade.

6Connex is a cloud-based platform on which users can host webinars, virtual trade shows and e-learning courses. Its customers include SonicWall, Blackrock, Ericsson and Anthem. 

The company, which launched in 2009, has 50 employees and will keep a presence in the San Francisco area as it builds its San Antonio headquarters.

Earlier this year, Dura registered a $1.9 million debt and equity offering with the U.S. Securities Exchange Commission to bolster its roster of software-as-a-service companies.

Dura CEO Paul Salisbury said in a statement that 6Connex fulfills a need that will continue to grow. 

Salisbury, a former Rackspace executive, co-founded Dura in 2017 with serial tech entrepreneur Michael Girdley, whose ventures include software development trade school Codeup and early-stage venture firm Geekdom Fund. 

Dura is now made up of three companies, including Moki Mobility, which it acquired in 2018, and Nordic IT, which it picked up in August. Its executives have said the company intends to acquire four to five companies a year for the next several years.

CAPITAL MARKETS/FINANCINGS

V&E advises underwriters on CubeSmart’s $350M notes offering

Vinson & Elkins said Oct. 11 that it advised the underwriters in connection with CubeSmart’s offering of $350 million in 3.000% senior unsecured notes due 2030.

The team included partner David Stone in Houston.

Wells Fargo, BofA Merrill Lynch and US Bancorp are joint book-running managers with Jefferies and Regions Securities acting as joint book-running managers and Barclays, BB&T Capital Markets, BMO Capital Markets and Stifel as co-managers.

The notes were priced at 99.623% of the principal amount with a yield to maturity of 3.043%. The notes are guaranteed by CubeSmart.

CubeSmart intends to use the net proceeds to repay all of the outstanding indebtedness incurred under its unsecured revolving credit facility maturing in June 2024 and use the remaining net proceeds for working capital and other purposes, which may include repayment or repurchase of other indebtedness.

Malvern, Pa.-based CubeSmart is a self-administered and self-managed real estate investment trust. Its self-storage properties are designed to offer affordable, accessible and mostly climate-controlled storage space for residential and commercial customers.

V&E counsels New York Mortgage on $150M preferred stock offering

Vinson & Elkins also advised New York Mortgage Trust Inc. on its $150 million underwritten public offering of its 7.875% Series E fixed-to-floating rate cumulative redeemable preferred stock.

The team included senior associate Doug Lionberger in Houston.

New York Mortgage is an internally managed REIT in the business of acquiring, investing in, financing and managing mortgage-related and residential housing-related assets.

The offering involves 6 million shares with a liquidation preference of $25 per share. The company has applied to list the stock on the Nasdaq Global Select Market under the symbol “NYMTM.”

The company has granted the underwriters an option for 30 days to purchase up to an additional 900,000 shares of the stock to cover over-allotments, if any. The offering is expected to close on Oct. 18.

Morgan Stanley, J.P. Morgan Securities, RBC Capital Markets, UBS Securities and Keefe, Bruyette & Woods Inc. were joint book-running managers for the offering.

The company plans to use the net proceeds for general business purposes, which may include acquiring its targeted assets of single-family residential and multi-family credit investments and other types of mortgage-related and residential housing-related assets and general working capital purposes.

Shearman aids Vaalco on secondary llsting on the London Stock Exchange

Shearman & Sterling said it advised Vaalco Energy in connection with its secondary listing on the London Stock Exchange’s Main Market.

The team included partner Bill Nelson and counsel Judy Little in Houston with help from attorneys in the firm’s New York and London offices.

Vaalco is an independent energy company focused on development and hydrocarbon exploration in West Africa. It is organized in Delaware and headquartered in Houston with operations primarily in the Etame Marin block offshore Gabon. 

The company also is listed on the New York Stock Exchange under the ticker symbol EGY.

UPDATE/OTHER

Topgolf International, a Dallas operator of golfing centers, is speaking with banks about an initial public offering next year, Reuters reported. Topgolf wouldn’t comment. Topgolf wants to expand its 52 golfing centers in the U.S., Britain and Australia to Mexico, Dubai and Canada as well as add new units in the U.S. and Britain. Its investors include investment firm WestRiver Group, Callaway Golf Co., Carolina Hurricanes’ majority owner Thomas Dundon and buyout firm Providence Equity Partners. Its general counsel is Eldridge Burns.

***

Austin-based Trust Ventures aims to raise $100 million for its second fund, according to an Oct. 10 filing with the Securities and Exchange Commission. The firm is led by Salen Churi, a former University of Chicago law professor and founder of its Innovation Clinic who practiced at Kirkland & Ellis and Sidley Austin, and Brian Tochman, who previously worked at Bell Helicopter, Alvarez & Marsal and Platinum Equity and was president and COO of modular housing developer Kasita. Its portfolio companies include Icon, Oklo, Sana Benefits, Veryable, Visibly, Emergy Foods and Stealth.

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Dallas chemicals company Celanese Corp. is in the process of a strategic review that could include a breakup, according to a report by Bloomberg. Celanese wouldn’t comment. It has a market capitalization of almost $15 billion. Its general counsel is Peter Edwards.  

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Exxon Mobil is considering a sale of its offshore oil producing assets in Malaysia that could fetch between $2 billion and $3 billion, according to Bloomberg. Exxon Mobil wouldn’t comment. Its general counsel is Randall Ebner.

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