The IPO market has been in the doldrums.
According to data firm IHS Markit, only seven initial public offerings had been launched this year as of late February, versus 24 that priced during the same period last year. The 35-day government shut-down and political and economic uncertainty certainly didn’t help matters.
However, there’s a bit of optimism bubbling up. Lyft has filed its IPO with the Securities and Exchange Commission and could begin trading on the Nasdaq by early April and Uber is expected to follow. Pinterest submitted a confidential plan to go public and Slack is said to be waiting in the wings. “The IPO window now seems to be opening,” Barron’s columnist Randall W. Forsyth recently wrote.
There’s also increasing optimism around oil and gas IPOs given higher commodity prices. The energy backlog remains robust with several companies having publicly filed S-1 documents, according to Morgan Stanley, and Barclays thinks energy IPO issuances will increase.
At least one has gotten out of the gate. On March 4, energy-focused special purpose acquisition company Tortoise Acquisition Corp. said it closed its $233 million IPO, including a partial exercise of the underwriters’ option to purchase more units (see the capital markets section below for more on the issue).
The SEC is trying to help boost the IPO market. It recently announced a plan that would allow all companies — not just emerging ones — to “test the waters” and confidentially discuss potential IPO plans with investors to gauge interest before committing to a process.
Special purpose acquisition companies, known as SPACs, have been filling the IPO gap, with 34 such companies raising $10 billion in 2017, 46 raising $10.7 billion last year and five raising $938 million so far this year, according to Gibson Dunn as part of a webinar last week. “It’s a different means to get to the same place,” Houston partner Gerry Spedale said.
The firm added that there were six successful energy-focused “de-SPAC” transactions last year (in which SPACs make acquisitions, as is their mandate) and there are at least eight energy-focused SPACs still searching for targets.
In dealmaking involving Texas lawyers, activity really picked up last week.
There were 20 transactions totaling $3.033 billion. That compared with 12 deals worth $2.02 billion the previous week and 20 transactions valued at $6.2 billion in the same week last year. Sixteen law firms in Texas and 105 Texas lawyers were involved in all the activity.
Including last week, year-to-date dealmaking has amounted to 136 deals valued at $42.58 billion. That’s about the same number of transactions at this time last year but 46 percent less in terms of value ($78.8 billion).
Capital markets activity continued to build this past week, with six transactions valued at $1.262 billion versus 14 M&A/private equity/venture capital deals worth $1.771 billion.
The industries involved in dealmaking included energy, real estate, industrial, technology and healthcare. A Japanese company made its first investment in U.S. tight oil and an affiliate of a well-known Oklahoma billionaire was caught wheeling and dealing.
M&A, PRIVATE EQUITY AND VENTURE CAPITAL
Kushner buys suburban apartments from Lone Star for $1.1B
Dallas-based Lone Star Funds has sold a portfolio of rental apartments to Jared Kushner’s family real estate company Kushner Cos. for $1.1 billion.
Lone Star didn’t respond to requests for its legal counsel, but it’s used Gibson Dunn and K&L Gates on deals in the past.
Its general counsel is William “Billy” Young, who previously was general counsel at asset manager Hudson Advisors and a partner in the London and Dallas offices of Vinson & Elkins.
The acquisition of the 6,000 apartments in Maryland and Virginia is Kushner’s biggest deal in over a decade, according to The Wall Street Journal.
V&E, Baker Hostetler work on $300M Wishbone, Ring deal
Vinson & Elkins said Feb. 27 it advised Wishbone Energy Partners on the sale of its North Central Basin Platform assets to Ring Energy Inc. for $300 million.
Partners John B. Connally, Bryan Loocke and Steve Gill led the corporate deal team with assistance from senior associate Tan Lu and associates Jackson O’Maley, Jack Moxon and Anastasia Arsenio.
Specialists included partner Todd Way, senior associate Julia Pashin and associate Christine Mainguy on tax and partner Guy Gribov and associate Alex Cross on finance.
Baker Hostetler partner Mark L. Jones counseled Midland-based Ring with help from senior associate Allison Jones and associates Ashley Whittington and Tess Wafelbakker. Matt Garner is Ring’s general counsel.
SunTrust Robinson Humphrey was Ring’s financial advisor.
The purchase price consisted of $270 million in cash and $30 million in stock. The assets are primarily in southwest Yoakum County, Texas, and East Lea County, New Mexico, and include 37,206 net acres of mostly contiguous leasehold.
Ring will serve as operator of the properties with a 77 percent working interest and a 58 percent net revenue interest.
The buyer said the deal will double its production, EBITDA and proved reserves, creating the largest horizontal San Andres company on the platform/northwest shelf.
SunTrust Bank provided a financing commitment letter for an increased $1 billion senior credit facility with a borrowing base of $425 million, which eliminates the need to tap the capital markets to fund the deal, Ring said. SunTrust Robinson Humphrey will act as lead arranger and book manager for the financing.
The parties expect to close the transaction early in the second quarter.
Ring CEO Kelly Hoffman said in a statement that the acquisition is a major step toward achieving the company’s stated goals to continue to generate strong annualized production growth and become cash flow neutral or positive by the second half of this year.
Marathon exits U.K. with $140M asset sale to RockRose
Marathon Oil said Feb. 25 that it agreed to sell its U.K. business to RockRose Energy plc for about $140 million as it focuses on its higher-return U.S. business.
A spokeswoman from the Houston-based company wouldn’t disclose in-house or outside counsel on the deal, but Gibson Dunn & Crutcher is believed to be advising it out of its Houston and London offices.
Marathon’s general counsel is Reggie Hedgebeth, who joined the company in 2017 after serving as general counsel for Spectra Energy Corp.
Marathon is selling Marathon Oil U.K. and Marathon Oil West of Shetland Ltd. RockRose also will assume about $350 million in working capital and cash equivalent balances. It hopes to complete the deal in the second half of the year.
Marathon said the divestiture, which it expects to complete in the second half of the year, further concentrates its portfolio on high-margin, high-return U.S. resource plays.
S&P Global said the deal underlines the steady departure of U.S. companies from the North Sea, a process that hasn’t proven to be easy. Chevron has been trying to sell most of its U.K. portfolio since at least last summer and ConocoPhillips said in January that it had broken off talks on a sale of its U.K. assets to petrochemicals company Ineos and was continuing to seek a buyer, the firm noted.
Simmons Energy analyst Ryan Todd said the divestiture is not surprising after Marathon’s consistent commentary that the U.K. assets were non-core. And while the upfront consideration to Marathon appears small, he said the back-end-weighted nature of transaction’s benefits, including removal of $1 billion in potential asset retirement obligations, “more than offset this.”
Todd said Marathon will experience a net cash reduction of around $210 million on its balance sheet, which had $1.5 billion in cash at the end of last year.
“Today’s announcement to divest our U.K. business represents our continued commitment to portfolio management and further concentrates our portfolio on high margin, high return U.S. resource plays,” Marathon Oil CEO Lee Tillman said in a statement.
At year-end, Marathon carried 21.4 million barrels of oil equivalent of proved reserves in the U.K. and 2018 production averaged around 13,000 barrels of oil equivalent per day.
V&E aids Summit on $90M Tioga sale to Hess Infrastructure
Vinson & Elkins said Feb. 26 that it advised Summit Midstream Partners on the sale of Tioga Midstream, a non-core gathering system in North Dakota, to affiliates of Hess Infrastructure Partners for $90 million.
Partner Doug Bland led the deal team with associates Michael Zarcaro and Kara Chung. Others from Texas were partner David Peck, senior associate Julia Pashin and associate Emily Fawcett on tax and counsel Scot Dixon on real estate.
The Woodlands-based Summit said the sale was part of a series of strategic actions to simplify its structure, improve distribution coverage, enhance its credit profile and drive unitholder value.
Latham & Watkins advised Summit on its simplification structure. Houston partners John Greer and Nick Dhesi led the deal team with associates Dan Harrist and Madeleine Neet.
Summit also announced that it had appointed Summit chief operations officer Leonard Mallett as interim CEO, replacing Steve Newby, who stepped down.
Mallett is keeping his COO responsibilities during the interim period and the company’s board has engaged a recruiter to assist it in conducting the search for a permanent CEO.
Energy Capital Partners is the entity’s largest unitholder and managing partner Peter Labbat sits on its board.
Summit’s other moves included cutting its unitholder dividend in half; prepaying $100 million of its deferred purchase price obligation and fixing the remaining obligation due in 2020 at $303.5 million; and eliminating its economic general partner interest and incentive distribution rights in exchange for 8.75 million Summit common units.
The conflicts committee of Summit Midstream Partners’ board used Akin Gump Strauss Hauer & Feld as its legal advisor, including energy partners John Goodgame and Lisa Hearn associate Katherine Raymond and tax partner Alison Chen.
Evercore’s Rob Pacha was the committee’s financial advisor with counsel from Bracewell, including partner William S. Anderson and associate Benjamin J. Martin in Houston. Summit Midstream Partners used Goldman Sachs.
Mayer Brown advises Flow Control on acquisitions
Mayer Brown said it advised North Carolina-based Flow Control Products Inc., which does business as Flow Control Group, on several acquisitions worth $75 million to $100 million.
The team was led by Houston senior associate Vince Cangolosi and included associates Ruchira Podali and Jessica Sewell.
The transactions involved 10 purchases from various undisclosed sellers in Texas, New York, Rhode Island, Florida, Massachusetts, Pennsylvania, Georgia, Illinois and Canada.
Flow Control claims to be a national leader in air and fluid control valves, devices, software and systems. It’s managed by Bertram Capital Management.
The transactions boost Flow Control’s national exposure, product and services offerings and market capabilities to better serve multiple industries in the U.S. and Canada.
Shearman aids ATX Seed Ventures on $32M second fund
ATX Seed Ventures, an Austin early-stage venture firm, has raised $32 million for its second fund.
Shearman & Sterling counsel J.R. Morgan in Austin counseled ATX.
ATX is already raising money for its third fund, which is targeting $100 million, TechCrunch reported.
The second fund will continue making early-stage investments in new high-growth technology companies in Texas and the south-central U.S. and follow-on investments in its current portfolio companies.
The venture capital firm said it has more than $60 million in assets under management and invested in 26 companies since its founding in 2014.
ATX is headed by managing partner Chris Shonk, partner Brad Bentz and partner and COO Danielle Allen, who said the firm has become the “go-to” for serial entrepreneurs in a state that’s considerably underserved for early-stage capital.
Last year Texas brought in $2.18 billion in venture capital, with Austin startups alone raising $1.33 billion, a 25 percent year-over-year increase, according to ATX citing the 2018 MoneyTree report from PwC/CB Insights.
ATX has been an early-stage investor in some of the fastest growing technology companies in the state, including Alert Media, Bractlet, SourceDay, GoCo, LIFT Aircraft, Pensa Systems, QuotaPath and Slingshot Aerospace.
The firm closed its inaugural fund in 2014, partnering with 16 businesses, and has four exits to date: FantasySalesTeam to Microsoft, RideScout to Daimler and Unbill to Q2 Holdings.
Bentz said that Austin is a globally-recognized innovation hub as evidenced by its population growth, startup density, top technology companies’ investment in the city and the high quality of life. He noted that Dallas, Houston and San Antonio also score high marks with startup ecosystems that are rapidly maturing.
Kastner Gravelle counsels SpyCloud on $21M funding
SpyCloud, an Austin company that provides breach detection services, said Feb. 27 that it raised $21 million in Series B funding led by Microsoft venture fund M12.
New investor Altos Ventures and returning investors Silverton Partners and March Capital Partners also participated in the investment round.
Kastner Gravelle’s Evan Kastner counseled Spycloud. Perkins Coie represented M12.
The company plans to use the funding for product development and to expand its security research team. It has 40 employees, 30 of whom are in Austin.
SpyCloud was established in 2016 and raised $2.5 million in 2017 and $5 million in March.
The company was co-founded by CEO Ted Ross, who previously was CEO of Exodus Intelligence and director of threat intelligence at Hewlett-Packard. The other founder is chief product officer David Endler, former CEO of Jumpshot (which was acquired by Avast in 2013), director of security research for TippingPoint (which was bought by HP) and iDefense (which was acquired by Verisign).
Venture capital deals have been abundant in Austin so far this year, amounting to more than $550 million, according to the Austin American-Statesman.
Locke Lord represents Coastal Flow on sale to Quorum
Locke Lord said Feb. 26 it represented Coastal Flow Measurement Inc. on its sale to Thoma Bravo-backed Quorum Software for undisclosed terms.
Locke Lord partner Joe Perillo in Houston led the deal team. He was assisted by Jennie Simmons, Steve Boyd, Jerry Higdon, Berne Kluber, Sara Longtain, Ed Razim, Buddy Sanders, Elizabeth Corey, Thomas Johnson, Matt McKenna and Emily Self, all of Houston, as well as Van Jolas in Dallas.
Kirkland & Ellis counseled Quorum with a team based in Chicago.
Credit Suisse Securities (USA) and Macquarie Capital are Quorum’s financial advisors and PPHB Securities is assisting Coastal Flow. Credit Suisse, Macquarie Capital, PSP Investments Credit USA LLC and Angel Island Capital are providing the deal financing.
Quorum claims be the leader in digital transformation for the oil and gas industry. It said it’s the preferred software provider to more than 75 percent of the largest oil and gas producers in the U.S., powering 80,000 miles of pipeline and 80 percent of the natural gas processed in the U.S.
Coastal Flow provides gas and liquids measurement, analytical services and software resources to the energy industry globally, including through unit Flow-Cal Inc. It’s led by chairman Steve Whitman and president and board member Mark Fillman.
The buyer said the acquisition expands and strengthens its industry-leading oil and gas software and services portfolio with the long-time leader in measurement data management for natural gas and petroleum liquids.
Quorum CEO Gene Austin said in a statement that the two companies’ organizations share longstanding relationships with customers and partners and are eager to explore ways to provide best-in-class products and services to the energy industry.
Flow-Cal president Mike Squyres said by combining the two companies’ product offerings, they can offer customers an integrated solution that enhances operational efficiencies and improves transparency across the industry.
Munsch counseled Worksoft on sale to Marlin Equity
Munsch Hardt Kopf & Harr said it counseled Dallas-based Worksoft on its sale to Marlin Equity Partners for an undisclosed sum.
The team included Dallas partner Rob Kibby along with associates Luke Lechler and Mark McMullen.
Goodwin Procter was Marlin’s legal advisor with its team leader based in Los Angeles. Shea & Co. was Worksoft’s financial advisor out of Boston.
Varagon Capital Partners provided a credit facility to back the deal.
Worksoft provides end-to-end, continuous test automation software for packaged applications, including SAP, Oracle, Salesforce, Workday and ServiceNow.
Worksoft and Marlin announced the deal Feb. 26. Marlin is recapitalizing and investing growth equity in the company and will have a majority stake.
Managing director Ryan Wald led the investment from Los Angeles-based Marlin, which has more than $6.7 billion of capital under management.
Worksoft, which is headed by CEO Lee Constantino, said Marlin’s investment and operational support will help it scale its platform.
Worksoft’s customers include Microsoft, Cardinal Health, P&G, Honda, 3M, Intel and Siemens and systems integrators such as Accenture, IBM and Cognizant.
Argonaut invests in Mammoth Carbon Products
Argonaut Private Equity, the Tulsa firm affiliated with billionaire George Kaiser, has made an undisclosed investment in Houston pipeline distributor Mammoth Carbon Products.
Frederic Dorwart counseled Argonaut including partner Steve Johnson, who works out of Dallas.
Established in 2014 and led by president Mike Ellis, Mammoth provides carbon steel pipe and services to the North American energy infrastructure markets with a focus on Texas and Colorado.
The company said it has long-standing relationships with steel mills to address pipeline projects as well as an inventory of carbon steel pipe products of various sizes, allowing it to respond more quickly to the maintenance and repair market.
Argonaut will partner with Mammoth to continue its expansion into markets in the northeastern U.S., Canada and California.
Argonaut CEO Steve Mitchell, who previously ran billionaire Mark Cuban’s private equity investments, said Mammoth is positioned to significantly impact the distribution of steel pipeline in North America to meet demand.
Argonaut was founded in 2002 and has $3 billion in capital deployed in 100 investments in several industry sectors including energy services, manufacturing and industrials.
Egan Nelson aids NarrativeDx on attracting funding
Austin-based NarrativeDx announced that it had attracted an undisclosed amount of strategic funding from Christiana Care Health System in Delaware, Summation Health Ventures and the Texas Medical Center.
Also investing were HealthX Ventures and Cultivation Capital, who participated in previous rounds of funding.
Jose Ancer at Egan Nelson in Austin counseled NarrativeDx, which plans to use the funds to accelerate sales and marketing, product innovation and hiring.
Led by founder and CEO Kyle Robertson, NarrativeDx said it uses patented artificial intelligence to identify actionable insights from patients and provider feedback so as to improve patient satisfaction scores, increase operational efficiency and decrease employee turnover.
It claims its sales jumped 477 percent last year from more than 100 clients.
The company said it’s helped healthcare leaders hear more than 11 million patient voices, which has boosted institutions’ likelihood to recommend scores and referral volumes and cut patient feedback analysis effort and lab wait times.
Juliana Garaizar, director of the $25 million TMC Venture Fund, said NarrrativeDx’s ability to produce actionable insights from reviews can significantly impact healthcare institutions’ return on investment.
Bracewell counsels Upper Bay on Tidewater investment
Bracewell said Feb. 28 that it represented Upper Bay Infrastructure Partners as the lead investor in the acquisition of Tidewater Transportation & Terminals from Stonepeak Infrastructure Partners. Terms weren’t disclosed.
The investor group also included Ullico, funds and accounts under management by BlackRock, Silverfern and others.
Texas members of the Bracewell team were partners Rebecca L. Baker and Bruce R. Jocz in Houston, Joshua T. McNulty in Dallas and Whit Swift in Austin.
Assisting them were associates Derek A.B. Speck, Andrew P. Mintz, David Bartz, Jackie Z. Coleman, Caitlyn N. Dockendorf, Melanie C. Goebel, Jason W. Keating, Jay N. Larry and Kevin R. Tamm, all of Houston.
Tonkon Torp in Portland, Ore., represented Stonepeak, which used Evercore as its financial advisor.
Founded in 1932, the Vancouver, Wash.-based company has evolved from a barge line primarily handling wheat into Tidewater Holdings Inc., a multi-commodity transportation, terminal and marine construction and repair company serving the transportation needs of the Pacific Northwest. It’s led by CEO Bob Curcio.
Its operating area spans 465 miles on the Columbia and Snake River systems from the inland Port of Lewiston, Idaho, to the Port of Astoria, Oregon, on the Pacific Coast.
Tidewater’s businesses include West Coast Marine Cleaning, which it acquired in 2014 and has provided industrial cleaning and waste haulage services since 1990; and Island Tug and Barge, which it acquired in 2017 and is the West Coast’s largest bulk transporter of refined petroleum products.
New York City-based Upper Bay was founded last year by former Nuveen (TIAA-CREF) executives, including managing partner and CEO Marietta Moshiashvili. It focuses on middle market infrastructure investments in North America.
Trent Vichie led the investment from Stonepeak, which has $15 billion in assets under management. It’s owned Tidewater for six years.
Shearman, Baker McKenzie work on Inpex-GulfTex deal
Japanese oil and gas explorer and producer Inpex Corp. announced March 1 that unit Inpex Americas Inc. agreed to buy development and production assets in South Texas’ Eagle Ford play from private equity-backed GulfTex Energy for an undisclosed sum.
The deal represents Inpex’s entry into the tight oil development and production business in the U.S.
Shearman represented San Antonio-based GulfTex with a team led by partner Sarah McLean and associate Kelli Sims and including tax partner Todd Lowther and associate Monica Raspino, all of the firm’s Houston office.
Baker McKenzie aided Inpex, including partner Denmon Sigler and senior counsel Louis Davis, both of Houston.
Most of the assets are in Karnes County and Inpex will operate the majority of them. The leases cover 13,000 acres and produce 7,600 barrels of oil equivalent per day.
Inpex said the deal will help it understand tight oil production in the U.S. and that it can enhance the value of the project by leveraging its existing tight reservoir development technologies.
Sustainable oil and natural gas exploration and production is one of the growth targets outlined in Inpex’s “Vision 2040” plan announced this past May to strengthen its asset portfolio.
The company is involved with 70 projects in more than 20 countries, including the Ichthys liquefied natural gas project in Australia. Its president and CEO is Takayuki Ueda.
GulfTex has been focusing its efforts on the Eagle Ford and Austin Chalk in South Texas as well as the Midland and Delaware basins in West Texas and southern New Mexico and the Scoop and Stack plays in Oklahoma.
Founder and CEO Brad Jauer leads the company, which has backing from Wells Fargo, Prudential Capital Group and GSO Capital Partners. Its previous iteration, GulfTex Energy III, sold most of its South Texas oil leases to Houston-based EnerVest Ltd. in 2016 but held onto some of its acreage.
Munck advises Geoforce on Cartasite acquisition
Munck Wilson Mandala said it advised Dallas-based Geoforce on its purchase of driver safety and vehicle tracking solutions provider Cartasite for undisclosed terms. The transaction closed March 1.
The primary lawyers from Munck were Larry Mandala and Richard Dusenbury with Marc Kaliser and Randy Ray assisting.
The Sage Law Group assisted Denver-based Cartaside, which was founded in 2004.
Geoforce CEO James MacLean III said in a statement that combining the platforms and customer bases will expand the company’s position as the world’s dominant provider of oilfield asset tracking solutions while also delivering Cartasite’s driver safety solutions to customers in transportation, logistics, construction and other field operations-intensive industries.
Kyle Bassett, CEO of Cartasite, will become general manager of Geoforce’s new StriveSafe unit.
Geoforce CFO Vincent Hsieh said the purchase adds talent across several functions, strengthens the company’s product offerings, improves operation efficiencies to better serve users and adds more than 100 new customers to grow profitability.
Geoforce claims to have more than 800 customers tracking 100,000 assets in 70-plus countries, including the world’s largest network of connected field equipment within the oil and gas industry. Other sectors it serves are agriculture, construction, mining, transportation and logistics.
CAPITAL MARKETS
Latham advises purchasers on $650M Antero notes offering
Latham & Watkins said March 1 that it advised the initial purchasers on a $650 million offering of senior notes by Antero Midstream.
The Houston-based team was led by partners Ryan Maierson and Nick Dhesi with associates Om Pandya, Erin Lee and Paul Robe. Partner Tim Fenn and associate Jim Cole provided advice on tax matters.
Vinson & Elkins counseled Antero.
Antero intends to use the proceeds to repay part of the outstanding borrowings under its credit facility.
Latham aids underwriters on Viper’s $281M follow-on offering
Latham also said March 1 that it counseled the underwriters on a $281 million follow-on offering by Viper Energy Partners LP.
That Houston-based team was led by partners Michael Chambers and David Miller and included associates Eric Schoppe, Bryan Ryan, Erin Lee and Ashlyn Royall.
Akin Gump Strauss Hauer & Feld counseled Viper, including partner Seth Molay.
The issue involved 9 million units priced at $31.25 per unit.
Viper plans to use the proceeds to purchase units of Viper Energy Partners LLC, which intends to use the proceeds to repay part of the outstanding borrowings under Viper Energy Partners LP’s revolver and for general partnership purposes, which may include acquisitions.
Credit Suisse is the book-running manager for the offering.
Viper was formed by Diamondback Energy Inc. to own, acquire and exploit oil and natural gas properties in North America with a focus on oil-weighted basins, primarily the Permian in West Texas and the Eagle Ford Shale.
V&E advises Tortoise on $233M IPO
Vinson & Elkins said it advised Tortoise Acquisition Corp. on its initial public offering of 23.3 million units at $10 per unit, raising $233 million.
The V&E corporate team was led by New York partner Brenda Lenahan as well as Houston partner Ramey Layne with assistance from associates Andrew Schulte and Layton Suchma.
Specialists included partner Lina Dimachkieh and associate Neil Clausen on tax and partner Stephen Jacobson, senior associate Kristy Fields and associate Austin Light on executive compensation/benefits.
The issue included a partial exercise by the underwriters of their option to purchase up to 3.375 million more units. The offering closed March 4.
The units are listed on the New York Stock Exchange and trade under the ticker symbol SHLL.U. Each unit consists of one share of the company’s Class A common stock and half of a redeemable warrant, with each whole warrant entitling the holder to purchase one share of the company’s Class A common stock at $11.50 per share.
Barclays, Goldman Sachs & Co. and UBS Investment Bank were joint book running managers for the offering.
Tortoise was formed to engage in a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. It intends to focus its search for a target business in the energy industry.
The company is led by chairman and CEO Vince Cubbage, who also is managing partner and CEO of Tortoise’s backer Lightfoot Capital Partners in New York.
Cubbage previously was chairman and CEO of Lightfoot-backed Arc Logistics Partners, which was sold to Warburg Pincus-backed Zenith Energy U.S. in 2017 for $320 million. Before Lightfoot he was an investment banker at Banc of America Securities and Salomon Smith Barney.
V&E counsels New York Mortgage on $90M stock offering
Vinson & Elkins said March 1 it advised New York Mortgage Trust Inc. on its $90 million underwritten public stock offering, which closed March 1.
The corporate team was led out of Washington, D.C., but included associate Doug Lionberger in Houston.
The offering of 15 million shares priced Feb. 26.
Morgan Stanley was the sole bookrunning manager for the offering.
New York Mortgage Trust expects to use the net proceeds for general business purposes, which may include acquiring its targeted assets, including both single-family residential and multi-family credit investments, other types of mortgage- and residential housing-related assets and for working capital.
Ewing & Jones aids CrowdOut on $4.75M loan to Precision
Ben Hughes and Randolph Ewing of Ewing & Jones counseled alternative lender CrowdOut Capital on its $4.75 million term loan to market research firm Precision Opinion.
Las Vegas-based Precision plans to use the loan to refinance existing debt and for additional growth capital.
The company, which was founded in 2006 and is led by president Jim Medick, provides insights for political organizations and social science agencies using Computer Assisted Telephone Interviewing, or CATI, technology.
It houses a 650-seat CATI data collection center and a focus group facility that includes a commercial grade kitchen and 48-seat movie theatre. It employs 700 Nevadans and has provided insights into the last three U.S. presidential elections.
Austin-based CrowdOut is headed by CEO Alexander Schoenbaum, who said the firm is filling a void in the market for a flexible lender for healthy middle market companies.
Founded in 2015, CrowdOut uses a web-based platform to offer individuals the opportunity to invest as little as $1,000 directly into corporate loans, which range from $4 million to $50 million.
The firm said it helps companies reduce lending costs by streamlining the underwriting process and drastically cutting fees. It’s led more than $170 million in originations since inception.
Ewing & Jones represents Superior Drilling on $4.3M credit facility
Ewing & Jones also represented Superior Drilling on a $4.3 million asset-based credit facility, including a $3.5 million revolver and $0.8 million term loan.
The loan will be used to expand the company’s Drill-N-Ream fleet expansion in the Middle East.
The Vernal, Utah-based company also refinanced the mortgage for its business campus to $3.3 million at 7.25 percent versus its previous 7.1 percent and extended the maturity by two years.
Superior Drilling CFO Chris Cashion said securing the revolving credit facility as the company expands supports its working capital needs and provides necessary capital to achieve its strategic plans.
Superior designs, manufactures, repairs and sells drilling tools. Its sales reached an estimated $18.2 million last year, up 17 percent over 2017, with operating income hitting $300,000.
UPDATE:
Two deals covered in this space have failed in the last month.
Houston-based Bristow Group Inc. said Feb. 11 that it terminated its $560 million purchase of Columbia Helicopters Inc. in Oregon and paid it a $20 million break-up fee.
The deal was expected to create a top global diversified industrial aviation solutions provider.
Bristow chairman Thomas C. Knudson said the decision was based on several developments but didn’t specify them. Knudson and Columbia CEO Steve Bandy said the two companies were still looking for ways to work together.
After the deal was announced, Bristow reported “material weakness” in internal controls regarding its financial reporting. Investors also questioned the buyer’s ability to finance the transaction, with Global Value Investment criticizing its use of expensive and dilutive stock issuances.
King & Spalding partner Stuart Zisman led the team that counseled Bristow on the deal. Baker Botts partner John Geddes was advising Bristow on the financing, which was expected to include debt, shares to Columbia’s founding Lematta family and management and cash.
Timothy Knapp became general counsel of Bristow in 2017, replacing interim general counsel David Searle.
Baylor Scott & White Health of Dallas and Memorial Hermann of Houston also scotched their preliminary agreement to merge their operations, which would have created Texas’ largest hospital system.
When they announced the $14 billion deal in November, the parties claimed the combined health system would be positioned to become a national model for integrated, consumer-centric and cost-effective care.
But on Feb. 5 the two said they were calling off the deal. They also didn’t cite a reason, but claimed they were capable of achieving their “visions” without merging and might collaborate in the future.
Outside counsel for the not-for-profit organizations was never revealed, although one source believed that Norton Rose Fulbright was advising Baylor Scott and McDermott Will & Emery was assisting Memorial Hermann. Baylor Scott’s chief legal officer is Jennifer Settle Brown and Memorial Hermann’s is Deborah Gordon.
Jim Hinton, CEO of Baylor Scott, was to be CEO of the combination while Memorial Hermann CEO Chuck Stokes was expected to join him in the proposed office of the CEO along with Baylor Scott & White president Pete McCanna.
***
Finally, Austin-based Strattam Capital closed its second fund at $230 million, ahead of its target, and has already deployed a quarter of it into three platform deals in the business-to-business IT industry.
Alas, Strattam used Weil Gotshal & Manges attorneys in New York for counsel on the new fund. But co-founder and managing partner Bob Morse said the firm uses Texas lawyers on all of its transactional work.