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CDT Roundup: 6 Deals, 6 Firms, 58 Lawyers, $18.1B

Oil & gas had a pretty rough summer. First COVID-19 curbed demand precipitously. Then came the brief but brutal outburst between OPEC+ and Russia, sending the price of oil briefly into negative territory.

The effect of all that was revealed in the numbers provided to The Lawbook last week from Mergermarket. Reporting only on M&A transactions involving one or more Texas-headquartered companies, numbers were down overall over the first three quarters of the year, dropping from 945 deals worth $307 billion in 2019 to 659 deals worth $146 billion over the same period in 2020.

Disappointing, but no real surprise. The real news may have been buried in the business sector breakdown. In an economy where M&A is generally dominated by the energy sector, technology emerged as the top sector in deal count. The margin, technology to energy, was narrow: 41 to 33 deals, or 20% to 15% of the total — a virtual flip between the two sectors from 2019.

The real drama lays in the relative deal values. In 2019, energy accounted for about 19% of the deals, but a full 64% of total M&A deal value; in 2020, energy accounted for only 25% of the total value, in a virtual tie with technology.

A large part of the difference is, of course, the aforementioned stall in energy demand provoked by the coronavirus pandemic. Lower demand results in slower triggers on M&A deals and lower valuations for the ones that do occur. But part of the difference is the rise of technology, even within the energy space.

Wes Watts is an Austin-based Vinson & Elkins partner specializing in technology deals. In recent weeks he’s handled a couple of them: the $60 million funding of DISCO, a legal e-discovery firm, and a $30 million funding of Point Pickup, a delivery dispatch platform. Watt says a rise in public equity interest in technology was already underway by the time the coronavirus hit; the pandemic, he said, accelerated the process.

“The pandemic wasn’t a direct hit to tech companies,” Watts said. “COVID-19 created opportunities for tech companies to reach consumers and also entrepreneurs who see those opportunities. So, you’re seeing some of them accelerate what they’re already doing.”

Aside from obvious growth areas like communications and e-commerce, the work-at-home environment has created a wide variety of technical challenges and, along with them, opportunities. Watts says, in particular, any technology that enhances “touch points” with customers, helping to keep companies and their products “top of mind” is having resonance with investors. But with that increased sense of touch, he says, comes security issues, which again, entrepreneurs see as opportunities.

“Vertical information security is becoming extremely important. With the dramatic expansion of the remote work force, more sensitive information is being passed around. As a result, investors are very interested in tech companies that offer scalable technology and security enhancement opportunities,” Watts said.

Living in Austin, Watts says it’s not hard to see the shift taking place in the Texas economy as it attracts interest from outside the state for reasons that go beyond simply not having a state income tax. The presence of Google, Facebook and Apple is bound to result in spin-offs of the talent that they attract. He says a number of private equity and venture capital firms are expanding from their traditional northeast boundaries into Texas.

“Texas has a massive economy. It’s strong and vibrant with an ecosystem that is becoming increasingly diverse,” Watts said.

There were last week six deals worth $18.1 billion, including five M&A deals worth $17.7 billion and a single capital markets transaction, an IPO no less, worth $350 million. The work was done by 58 Texas lawyers at six unique firms.

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
June 3 202312$6,104.42121388$4,256.924$1,847.5
May 27, 202317$12,200106711$6,1656$6,035
May 20, 202311$22,458.181034$19,4557$3,003
May 13, 202312$7,034101018$5,4604$1,574
May 6, 202320$3,297.61819617$2,985.63$312
April 29, 202323$3,691.21813517$1,969.76$1,721.5
April 22, 202316$5,5701410414$4,7502$1,000
April 15, 202312$23,818.195910$21,618.12$2,200
April 8, 202316$7,94991739$5,4727$3,477
April 1, 202321$18,676.71217511$10,926.710$7,750
March 25, 202315$8,779.5101415$2,36210$6,416.5
March 18, 20237$14,048.86695$13,3452$703.8
March 11, 202321$11,5761616516$8,1315$3,445
March 4, 202320$9,6681122816$8,2094$1,459
February 25, 202313$5,3351313012$4,2351$1,200
February 18, 202314$5,743.7131588$898.76$4,845
February 11, 202316$12,0881213712$9,9654$2,123
February 4, 202317$8,0661514013$5,6144$2,452
January 28, 20237$2,1807755$1,692.752$488
January 21, 202317$5,7681617412$1,9185$3,850
January 14, 202311$2, 800101028$4213$2,400
January 7, 202318$8,2961116714$6,4613$1,835
December 31, 202214$2,732119912$2,0922$640
December 1714$7,9191311512$7,4191$500
December 10, 202214$10,093128811$7,0933$3,000
December 3, 202226$12,800.91117220$4,1416$8,659.9
November 26, 20228$2,266.7853$765$2,190.7
November 19, 202221$2,8861521219$2,5502$336
November 12, 202213$15,093.79819$14,2004$893.7
November 5, 20222519,337.21650922$8,267.23$11,070
October 29, 202215$7,805.3911614$7,180.31$625
October 22, 202220$8,193.51325313$5,4427$2,751.5
October 15, 20229$3,046.191397$2,588.32$457.8
October 8, 202219$2,011.81211416$833.83$1,178
October 1, 202223$5,532.91615618$4,952.35$580.6
September 24, 202218$5,1941421615$4,0503$1,144
September 17, 202221$8,352.31232015$4,759.66$3,592.7
September 10, 202215$19,853.51012613$19,403.62$450
September 3, 20229$2,3129629$2,31200
August 27, 202216$30,891.71013515$30,666.41227.7
August 20, 202212$1,977815299253$1,052
August 13, 202218$8,004.71124211$2,844.77$5,160
August 6, 202224$7,948.91224017$3,5777$4,371.9
July 30, 20228$6,9419787$6,8391$102
July 23, 202211$801119210$80110
July 16, 202214$3,6501012214$3,65000
July 9, 202210$3,557.77689$3,557.710
July 2, 202218$8,609.41315215$2,754.43$5,855
June 25, 202215$6,142131469$2,0176$4,125
June 18, 202217$11,890.11422815$11,4102479.7
June 11, 202217$7,6001212310$2,3007$5,300
June 4, 202212$2,937101279$6923$2,245
May 28, 20229$3,197.611869$3,197.600
May 21, 202214$7,284.51218511$6,6093$675.5
May 14, 202211$306.698010$306.61$225
May 7, 202216$10,451.751210812$1,8274$8,624.75
April 30, 202216$2,296.51615712$895.54$1,401
April 23, 202210$2,24111588$16412$600
April 16, 202211$6,64371568$2,3593$4,284
April 9, 202217$4,4291418411$1,6906$2,739
April 2, 202213$1,75588410$1,1453$610
March 26, 202211$3,2058656$2005$3,005
March 19, 202213$2,239.17910613$2,239.1700
March 12, 202218$12,0161123915$11,9652$51.35
March 5, 202217$6,7861313713$5,1614$1,625
February 26, 202212$5,09581499$4,437.53$658
February 19, 202217$22,2291717414$21,3543$875
February 12, 202212$2,344.710738$641.74$1,703
February 5, 202211$2,50389911$2,50300
January 29, 202211$3,8721210112$3,87200
January 22, 202213$5,143.5109912$4,842.51$301
January 15, 202212$7,60591559$6,4803$1,025
January 8, 202213$8,256.21110213$8,256.200
January 1, 20229$1,273.86509$1,273.800
December 25, 202121$4,734.751117616$3,4105$1,324.75
December 18, 202126$7,325.21519318$3,640.28$3,685.2
December 11, 202116$5,0171010913$1,4173$3,600
December 4, 202114$2,3108868$2,3106$1,882.05
November 27, 20219$3.460.1101016$1,7583$1,702.6
November 20, 202120$22,7921515712$18,864.58$3,928
November 13, 202121$26,7291217813$11,8228$14,907
November 6, 202112$8,3031315710$6,6823$1,621
October 30, 202121$10,3681521815$9,24.46$1,103.
October 23, 202121$18.783.11522211$12,31410$6,468.6
October 16, 202115$3,8681111815$2,2932$1,575
October 9, 202120$8,6101617516$7,7954$815
October 2, 202114$6,2501113710$5,2004$1,050
September 25, 202111$11,4609937$10,2004$1,250
September 18, 202111$16,6038998$15,0843$1,519
September 11, 202117$10,6531110313$8,5034$2,150
September 4, 202113$7,222108911$6,7152$507
August 28, 202112$76396311$6631$100
August 21, 202112$29,65977911$29,5791$80
August 14, 202122$17,8451119912$12,80510$5,04
August 7, 202117$13,6701213915$11,7662$1,904
July 31, 202121$8,1601113410$3,57410$4,586
July 24,202121$6,3671113915$3,7126$2,655
July 17, 202114$4,0091112412$2,0152$1,994
July 10, 202116$3,9971314311$1,5974$2,4
July 3, 202124$7,492139416$3,7698$3,722
June 26, 202110$4,9957858$3,8472$1,148
June 19, 202128$16,83082289$1,86119$14,968
June 12, 202126$27,2381520919$25,6027$1,636
June 5, 202115$15,5391310013$14,7092$600
May 29, 202135$20,2791114528$18,647$1,639
May 22, 202124$53,2081417417$51,0477$2,161
May 15, 202118$10,6201322011$5,8707$4,809
May 8, 202117$10,4001115615$8,3862$2,500
May 1, 202121$7,2001611512$3,8089$3,392
April 24, 20218$20,2009318$20,20000
April 17, 202114$6,270810211$4,01803$2,260
April 10, 202115$8,9401312914$7,9901$950
April 3, 202118$19,5131015112$16,9236$2,590
March 27, 202127$13,9421524414$4,30013$9,633.5
March 20, 202111$2,04641023$2708$1,776
March 13, 202115$3,27091096$5389$2,732
March 6, 202124$13,6171019613$10,39511$3,222
February 27, 202119$8,1051213915$4,9704$3,135
February 20, 20219$8,82091538$8,5201$300
February 13, 202112$4,852.678172,7665$2,086.6
February 6, 202118$9,7521315314$5,2224$4,530
January 30, 202118$9,449918215$8753.83$695.3
January 23, 202114$8,15081186$4,0008$4,150
January 16, 202117$6,7831313811$2,4006$4,382.9
January 9, 202122$6,8291413518$3,139.34$3,690
January 2, 20217$1,4667607$1,46600
December 26, 202018$15,9001216316$5,3001$600
December 19, 202018$9,7691411014$8,4264$1,343
December 12, 202010$7,20091009$3,3251$3,830
December 5, 202015$4,26191229$2,7806$1,481
November 28, 202019$7,7581011013$4,0036$3,755
November 14, 202014$864.11415712$289.12$575
November 7, 202013$6,33291299$2,483.54$3,849
October 31, 202010$3,995.881036$3,231.14$754.7
October 24, 20206$18,1006585$17,7091$350
October 17, 20208$351.95558$351.900
October 10, 20207$5,2293504$7353$4,494
October 3, 202014$21,42891739$17,5355$3,893
September 26, 202010$12,7708935$10,3005$2,470
September 19, 202014$8,36591016$1,0208$7,345
September 12, 20206$4,4068593$1,2703$3,136
September 5, 202011$5,19181179$4,0612$1,130
August 29, 202011$2,5319945$1,1306$1,401
August 22, 202018$6,574121407$1,93011$4,644
August 15, 202013$4,99110977$1,2166$3,775
August 8, 202012$32,092111129$30,4573$1,635
August 1, 20207$5,2878765$3,6872$1,600
July 25, 20209$18,7516677$18,4032$348
July 18, 20206$1,982.55504$1,407.52$575
July 11, 202011$565.1127510$65.11$500
July 4, 202010$8,8898989$8,7881$100.3
June 27, 20208$6,87410505$4,972.53$2,081.5
June 20, 202012$4,44491157$2,8295$1,615
June 13, 20206$3,5824372$3504$3,232
June 6, 202011$3,213.78657$4704$2,743.7
May 30, 20208$7,3357486$4,6392$2,697
May 23, 20204$432.44343$432.410
May 16, 20206$3106345$31010
May 9, 202018$5,6301612414$3,1804$2,450
May 2, 20201510,40010908$1,9007$,8,500
April 25, 20208$3,4009365$1,0003$2,450
April 18, 202019$9,50014928$185.711$9,360
April 11, 202012$6,0009405$1907$5,800
April 4, 202014$8,200116810$2,2004$6,000
March 28, 202016$6,500139610$3,7006$2,800
March 21, 202011$11,9107337$2,2504$9,960
March 14, 20207809.86346684.81125
March 7, 202016$2,500157013$6693$1,400
February 29, 202013$15,2601312811$11,7602$3,500
February 22, 202012$3,700109210$2,5602$1,130
February 15, 202016$1,250108412$354$1,222
February 8, 202018$6,0801412314$2,5954$3,485
February 1, 202021$20,9001210114$17,8607$3,060
January 25, 202013$7,430136212$6,4301$1,000
January 18, 202023$9,5801512019$6,5804$3,000
January 11, 202021$14,2001819916$1,0205$13,200
January 4, 202022$6,4001111916$3,2046$3,245
December 28, 201922$7,1501917518$6,8004$327.4
December 14, 201924$36,3002316719$9,5005$26,800
December 7, 201911$10,40011557$1,0824$9,370
November 30. 201914$2,4501212612$1,7602$692.5
November 23, 201916$1,995104111$6155$1,380
November 16, 201915$3,8201313511$2,5004$1,271
November 9, 201925$12,9001718223$12,2002$575
November 2, 201910$2,470126192,4503$22
October 26, 201912$5,560147011$3,8601$1,700
October 19, 20198$6,60081388$6,60000
October 12, 201919$4,300145516$3,8003$500
October 5, 201918$14,5001916615$11,1003$3,400
September 28, 201919$8,1001813218$7,5601$550
September 21, 201914$6,300166611$2,1603$4,170
September 14, 201915$23,800125611$21,2504$2,570
September 7, 201917$3,500159814$1,9003$1,600
August 31, 20195$8,7006505$8,70000
August 24, 201916$10,000148215$4,2501$5,750
August 16, 201910$1,6805527$6503$950
August 9, 201917$17,700156814$3,9003$13,800
August 2, 201913$5,7601210813$5,760NANA
July 27, 201911$7,30013768$6,5703$730
July 20, 201913$11,8001312511$5,3002$6,500
July 13, 201910$7757468$542.52$233
July 6, 20197$2,5009857$2,50000
June 29, 201923$8,2901515417$2,3006$5,970
June 22, 201917$10,7001013914$7,7003$3,000
June 15, 201911$13,5001416011$13,500NANA
June 8, 201913$2,870175511$1,5702$1,300
June 1, 201910$4,46011608$4,1402$315
May 25, 201917$4,360147914$3,7003$612
May 18, 201922$9,0001715016$3,4006$5,600
May 11, 201918$19,8001717715$18,3003$1,500
May 4, 201910$7,0756328$6,9002$175
April 27, 201915$3,2001411714$3,1601$40
April 20, 201913$13,50010909$12,2004$1,300
April 13, 201916$38,900149114$37,8002$1,100
April 6, 201912$6,870119410$6,7302$50
March 30, 201915$6,470128410$7,91.55$5,677
March 23, 201918$6,450149114$5,0424$1,408
March 16, 201914$10,1801211511$8,8003$1,300
March 9, 20199$1,8006498$1,3001$500
March 2, 201920$3,0331610714$1,8176$1,262
February 23, 201912$2,0408699$614.63$1,430
February 16, 201916$9,970187716$9,97000
February 9, 201914$6,4001011014$6,40000
February 2, 201918$6,740159916$5,7202$950
January 26, 201913$2,770116711$918.952$1,850
January 19, 201915$3,819167612$2,5943$1,225
January 12, 201918$7,283149215$1,6833$5,600
January 5, 201910$529125010$52900
December 22, 201817$2,570138714$9413$1,629
December 15, 201810$2,8608268$2642$2,600
December 8, 201815$1,819166512$5523$1,267
December 1, 201812$7,50010909$1,2003$6,200
November 28, 201815$4,5001110714$4,0001$500
November 19, 201818$6,137139813$2,1425$3,995
November 14, 201818$9,2001315215$8,5003$694
November 6, 201816$17,3001618314$16,3612$950
October 29, 201814$14,4001812717$13,8001$600
October 24, 201813$6,1401312611$5,1222$1,018
October 17, 201818$18,3901512514$12,2924$6,098
October 10, 201829$3,1491810420$1,6479$819
October 2, 201818$9,300116714$7,3004$2,000
September 25, 201813$7,000117510$6,0003$995
September 18, 20189$3,5707449$3,57000
September 11, 201813$5,9001013213$5,90000
September 7, 201814$5,000158611$4,0003$1,000
August 29, 201815$20,700147913$4,7002$16,000
August 20, 201810$12,40011538$11,3803$1,057
August 14, 201812$19,900121329$18,8893$1,011
August 7, 201816$68,6001110613$67,2593$1,340
July 31, 201815$15,100159511$13,0604$2,060
July 23, 201813$2,130156010$1,8043$1,100
July 17, 201814$5,37017989$4,3105$1,100
July 9, 201816$11,200157410$11,0806$862
July 3, 201813$7,00078112$6,3301$750
June 25, 201815$8,80013979$4,9706$3,930
June 18, 201813$14,20014807$2216$14,290
June 11, 201812$6,3008968$5,9104$803
June 6, 201813$14,50010888$14,1545$579
May 31, 201811$4,89010638$3,2403$1,790
May 22, 201815$20,40011639$19,8086$885
May 15, 201815$4,7001510610$3,9005$643
May 9, 201811$1,40013889$1,3002$560
May 1, 20188$14,2507887$13,4001$450
April 24, 201812$5,30066111$4,4701$800
April 17, 20189$1,80010447$2,3302$1,434
April 11, 201811$2,5008326$1,6905$809
April 3, 201815$13,400111219$12,0206$1,090
March 28, 201810$4,00010927$3,8703$215
March 19, 201817$5,800135110$5907$5,165
March 12, 201815$3,130114311$2,3604$788
March 6, 201819$5,4001311610$1,5309$4,860
February 27, 201820$6,600136914$5,5306$1,030
February 19, 201815$5,5001411110$3,9906$1,980
February 12, 201823$10,9001715712$7,11011$3,840
February 5, 201816$8,600131007$1,3309$7,800
January 30, 201811$12,60011685$7,3006$4,982
January 24, 201819$9,400151295$2,01014$7,337
January 18, 201810$6,2808492$2,1008$4,188
January 9, 201812$16,50012929$15,8903$475
January 3, 201810$2,5009478$2,3502$150
December 27, 201715$9,000151139$7,5686$1,784
December 18, 201715$13,800161649$13,0107$1,118
December 11, 201714$9,7001012612$2,9404$8,500
December 4, 20176$1,8006315$1,5101$300
November 28, 20177$3,8508764$3,2603$285
November 16, 201710$2,70010486$1,8404$856
November 8, 201715$2,380179110$1,8605$516
November 1, 201712$4,70017949$3,4004$1,300
October 23, 201715$10,500106710$9,7804$1,530
October 18, 20176$2,000373$2253$1,820
October 10, 201712$6,5701009$3,8803$3,360
October 2, 20178$3,10011193$1,6305$1,750
September 25, 20178$4,8808795$2,6605$2,070
September 18, 20179$4,7703$3006$4,470
September 12, 201711$4,4308$2,0303$2,400
September 1, 20174$1,3103$3171$1,000
August 23, 201711$13,64098$11,8403$1,800

The deals — particularly their total value — were paced, of course, by the ConocoPhillips/Concho Resources and the Pioneer Natural Resources/Parsley Energy mergers. The two accounted for $17.1 billion of the week’s total $18.1 billion.

Last week there were five deals worth only $352 million. This time last year, there were a dozen deals worth $5.5 billion.

M&A/PE FUNDING

Concho Resources Agrees to $9.5B Merger with ConocoPhillips

ConocoPhillips and Midland-based Concho Resources announced Oct. 19 their agreement to merge in a $9.5 billion all-stock transaction. The resulting combination will have an estimated enterprise value of about $60 billion.

The deal, as previously reported by The Lawbook, is the largest shale-oil consolidation transaction yet in an industry hit hard by COVID-19, and the second largest upstream deal of this year. The deal follows on the heels of the $13 billion acquisition of Noble Energy by Chevron. But it eclipses other recent deals including the $5.6 billion acquisition of WPX by Devon in September.

Kelly Rose, legal and general counsel for Houston-based ConocoPhillips, leaned on Wachtell Lipton corporate partners Andrew Brownstein and Gregory Ostling in New York for assistance with the transaction. There were no Texas lawyers involved.

As he has in the past, Concho Resources GC Travis Counts sought the advice of Sullivan & Cromwell. The firm advised Concho in its $9.5 billion acquisition of RSP Resources in 2018 with a team led from New York by Joseph Frumkin and Krishna Veeraraghavan.

Goldman Sachs & Co. is serving as exclusive financial advisor to ConocoPhillips. Credit Suisse Securities and J.P. Morgan Securities are acting as financial advisors to Concho.

Under the terms of the transaction, which has been approved already by the board of directors of each company, each share of Concho common stock will be exchanged for a fixed ratio of 1.46 shares of ConocoPhillips common stock, representing a 15 percent premium to closing share prices on October 13.

The combined company will now hold “core-of-the-core” acreage positions across the Delaware and Midland basins, as well as leading positions in the Eagle Ford and Bakken, as well as the Montney shale play in western Canada.

“Through this combination, we are joining a diversified energy company with even more scale and resources to create shareholder value in today’s markets and beyond,” said Tim Leach, chairman and chief executive officer of Concho Resources. Leach is expected to join the ConocoPhillips board as executive vice president and president of the company’s Lower 48 operations.

Gibson Dunn, V&E Advise on $7.6B Pioneer Purchase of Parsley

As previously reported in The Lawbook, Pioneer Natural Resources announced Oct. 20 that it has reached an agreement to acquire Parsley Energy for $7.6 billion, including $3.1 billion in debt.

In the all-stock transaction, Parsley shareholders will receive 0.1252 shares of Pioneer common stock for each share of Austin-based Parsley. The deal includes a 7.9% premium to Parsley shareholders based on unaffected shares at closing on Oct. 19, when Parsley shareholders will, in effect, own 26% of Pioneer Resources.

The boards of both companies have already approved the transaction and Quantum Energy Partners, owners of 17% of Parsley’s shares, have executed their binding support. The combined company will remain in Dallas as Pioneer Natural Resources and will expand its board of directors to include two new members from Parsley.

Pioneer GC Mark Kleinman tapped Gibson Dunn & Crutcher to advise the Dallas-based energy company. The Gibson team was led from Dallas by M&A partner Jeff Chapman, backed by Houston partner Tull Florey, New York associate Kristen Poole, Dallas associate Paige Lager and Houston associate Jordan Rex.

Partner David Sinak and associate Michael Cannon advised on tax matters from Dallas; partner Krista Hanvey and associate Tyler Richardson advised on benefits, also from Dallas. Houston partner Michael P. Darden, of counsel James Robertson, associates Nathan Zhang and Jordan Silverman and Denver associate Graham Valenta advised on oil and gas aspects. From San Francisco, partner Peter Modlin advised on environmental aspects. New York partner Daniel Angel advised on IP aspects. Washington, D.C. partner Adam Di Vincenzo and counsel Andrew Cline advised on antitrust aspects. Washington, D.C. partner William Scherman and associate Ruth Porter advised on regulatory aspects. Orange County partner James Moloney advised on securities aspects.

Pioneer has retained Goldman Sachs & Co. and Morgan Stanley as financial advisors, while Parsley relied on Credit Suisse Securities and Wells Fargo for financial advice.

Vinson & Elkins represented Parsley on the transaction with a team led by partners Doug McWilliams and Lande Spottswood with assistance from senior associates Mike Marek, Jessica Lewis and Jackson O’Maley and associates David Bumgardner, Markeya Scott, Charlie Fitzpatrick, Carmen Guidry and Mary Busse. Other key deal team members are partners John Lynch, Lina Dimachkieh, Shane Tucker, Bryan Loocke, Matt Dobbins, Devika Kornbacher and Darren Tucker and counsel David Smith, Sarah Mitchell and Damien Lyster.  

Parsley Energy’s in-house legal efforts on the merger were led by general counsel Colin Roberts, along with associate general counsel Matt Hendrix and senior counsel Justin Hunter, a V&E alum.

In 2014, a V&E team led by Doug McWilliams advised Parsley Energy in its IPO. 

Parsley was founded in 2008 as an unconventional E&P company and has focused its operations in the Permian Basin.

Scott D. Sheffield, Pioneer’s president and CEO said in a release, “This transaction creates an unmatched independent energy company by combining two complementary and premier Permian assets, further strengthening Pioneer’s leadership position within the upstream energy sector. Parsley’s high-quality portfolio in both the Midland and Delaware Basins, when added to Pioneer’s peer-leading asset base, will transform the investing landscape by creating a company of unique scale and quality that results in tangible and durable value for investors.

Matt Gallagher, Parsley’s president and CEO said the merger will “forge a strong new link at the low end of the global cost curve.” He said sutainable free cash flow and return on capital are now investment prerequisite in the energy sector.

“With neighboring acreage positions located entirely in the low-cost, high-margin Permian Basin, the industrial logic of this transaction is sound. Furthermore, the Pioneer team shares our belief that a clear returns-focused mindset is the best tool to compete for capital within the broader market.”

The two companies said that by combining, they expect the enhanced cash flow to help lower the reinvestment rate 65% to 75% at strip pricing, with annual savings of $325 million from combining operational structures.

But the main attraction is that by combining, Pioneer will increase proved reserves by 65%.

Weil, Kirkland Advise on AxiomSL Sale to Thoma Bravo

AxiomSL announced Oct. 19 that Thoma Bravo, the San Francisco-based private equity firm, had acquired a controlling interest the global risk-management and regulatory data platform.

The terms of the deal were not disclosed.

AxiomSL was advised by Weil Gotshal & Manges with a team that included a Texas contingent. The Weil team was led by Boston private equity partner Kevin Sullivan, but it also included Dallas partner Rick Frye as well as associates Drew Mosier and Shanna Dean.

Kirkland & Ellis advised Thoma Bravo with a team led from Chicago that included no lawyers from Texas.

Evercore acted as financial advisors for AxiomSL.

Headquartered in New York, AxiomSL is a cloud-based provider of risk-management data aimed at highly regulated sectors like banking, investment management, broker dealers and commodity trading institutions. Its primary platform, branded as ControllerView, handles reporting data for 5,000 reports across 55 jurisdictions and 110 regulatory agencies.

The company was founded by CEO Alexander Tsigutkin and CTO Vladimir Etkin. Thoma Bravo said it plans to help AxiomSL management accelerate the growth of its customer base, while continuing to develop innovations in its unique data space.

Said Thoma Bravo principal Brian Jaffee: “The problems AxiomSL’s solutions help solve are only getting more complicated, and we believe the company is well-positioned to deliver for its customers, especially as more of this critical functionality moves to the cloud.”

Winston Advises Kainos Capital in Purchase $575M Purchase of Nutrisystem

Dallas-based Kainos Capital announced Oct. 19, that it has acquired Nutrisystem, the direct-to-consumer weight management brand, from Tivity Health for $575 million. The deal includes an investment by Michael Dell’s MSD Partners.

Kainos, a middle-market private equity firm that specializes in food and consumer acquisitions, has invested in a variety of nutrition-based food companies, including SlimFast, SturmFoods, Advanced Refreshment and Earthbound Farm.

Nutrisystem, a highly visible weight loss brand for 45 years, provides programmatic and home-delivered meals, snacks and shakes designed to aid weight loss. In addition to its structured meal plans, the company also provides live dietary advice and coaching, both for weight loss and diabetes management.

Winston & Strawn advised on the transaction, led from Dallas by transactions partner, Christina Tate. She was assisted by partner Chip Gage along with associates Ben Chrisman, Lauren Lieberman, Danielle Marr, Miles McDougal, Emily Semon and James Waters. The team also included lawyers from New York, Chicago, San Francisco and Los Angeles.

Rabobank is providing debt financing and is acting as financial advisor to Kainos.

“Nutrisystem is a valuable partner to its customers, particularly during the COVID pandemic when it is more challenging for many people to access affordable, healthy meals,” said Andrew Rosen, managing partner of Kainos.

John Civantos, co-head of the Private Capital Group of MSD Partners said, “We have tremendous respect for the franchise Kainos has built in health and wellness brands and are thrilled to be partnering with them in the acquisition of Nutrisystem. This investment is a perfect example of both MSD’s application of deep domain expertise in technology-driven, direct-to-consumer businesses, and our unique ability to construct creative, flexible capital solutions at scale.”

Latham, Baker Botts, Sidley Advise on CONSOL Coal Resources Simplification

In a $34.4 million simplification transaction, CONSOL Coal Resources Inc. (CEIX) announced that it is acquiring all the common stock of CONSOL Coal Resources LP (CCR).

Under the merger agreement, CEIX will acquire all of the approximately 10.9 million outstanding CCR common units that it does not already own at a fixed exchange ratio of 0.73 shares of CEIX common stock for each publicly held CCR common unit. The exchange rate represents a 2.1% premium to CCR shareholders and, ultimately, 22% of the outstanding shares of CEIX.

After the transaction, CCR will cease to be publicly traded and incentive distribution rights will be eliminated.

Latham & Watkins advised CONSOL Energy Inc. in the transaction with a corporate deal team led by Houston partners Nick Dhesi and Bill Finnegan, with Houston associates Ryan Lynch, Bryan Ryan, Rebecca Kendall, Caroline Ellerbe and Danielle Kinchen.

Advice was also provided on environmental matters by Houston partner Joel Mack and Los Angeles counsel Josh Marnitz; on benefits and compensation matters by Washington, D.C. partner Adam Kestenbaum; and on tax matters by Houston partners Tim Fenn and Jim Cole, with Houston associate Marianne Standley.

A Houston-based Baker Botts team of partner Joshua Davidson and associate Jude Dworaczyk advised Intrepid Partners, financial advisor to the CCR conflicts committee.

 The CCR conflicts committee itself was advised by a Sidley Austin team led by partners Bill Cooper and Jon Daly. They were assisted by Kayleigh McNelis, Tanner Groce and Sabina Wahl with Heather Palmer advising on regulatory matters and Angela Richards advising on tax. All are located in Houston except Cooper, who is located in Washington, D.C.

Citi and Credit Suisse Securities are financial advisors to CEIX.

The reps were tapped by by CONSOL general counsel Martha Wiegand. Wiegand is a graduate of Duquesne School of Law and worked for Reed Smith before joining CONSOL in-house.

“Simplifying the structure will bring immediate benefits to the combined entity such as improving its consolidated credit metrics, creating financial flexibility and eliminating dual public company costs,” said Jimmy Brock, president and CEO of CONSOL. “In the longer term, we expect this transaction will improve the creditworthiness of the combined entity, while also enhancing capital market access and trading liquidity. Finally, this merger accelerates our ability to return capital to our shareholders.”

CAPITAL MARKETS

Latham Advises Supernova SPAC on $350M IPO

Supernova Partners Acquisition Company, Inc. announced Oct. 20, that it has upsized its initial public offering of 35,000,000 and priced it at $350 million, or $10.00 per unit.

Washington, D.C.-based Supernova is a blank check company formed for the acquisition of tech-oriented companies by Spencer Rascoff, founder of Zillow and Hotwire, and Alexander Klabin of the Senator Investment Group. The company CEO is Blackstone-ex Robert Reid and CFO is Michael Clifton, formerly a Carlyle Group executive.

In September, the company originally priced the IPO at $300 million but upsized the offering to $350 million.

Each unit consists of one share of Supernova’s Class A common stock and one-third of one warrant redeemable for a share of Class A common stock at an exercise price of $11.50 per share. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

Latham & Watkins is advising Supernova. Washington D.C. partners Patrick Shannon and Jason Licht a leading, along with Houston partner Ryan Maierson and associates Om Pandya, Paul Robe and Evann Hall.

J.P. Morgan Securities LLC and Jefferies LLC are acting as book runners for the offering.

Supernova says it is looking for acquisition opportunities to combine with one or more businesses that would help the company benefit from “thematic shifts and tech-enabled trends,” in large addressable markets — meaning: companies with potentially disruptive technologies.

Allen Pusey

Allen Pusey is a senior editor and writer at The Texas Lawbook.

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