By Claire Poole
(Sept. 11) – Blame the four-day work week.
While there were two energy-related transactions this past week above the $1 billion mark, there were only 13 deals in total worth nearly $5.9 billion, versus 14 the previous week worth $5 billion. It was another slow week in deal land.
All the transactions were M&A or private-equity related, with nary a single capital markets transaction involving a Texas lawyer.
Ten firms and 131 attorneys offered their legal advisory services, versus 15 firms and 86 attorneys the previous week.
King & Spalding counsels Transocean on $2.7B Ocean Rig purchase
As The Texas Lawbook previously reported, Transocean Ltd. agreed to purchase Ocean Rig UDW for $2.7 billion, continuing the consolidation of the offshore drilling business.
King & Spalding was Transocean’s U.S. legal advisor. Most of the attorneys were in the Atlanta office but partner Martin Hunt, who offices in Houston and London, worked on cross-border issues. Houston partners Dan Rogers and Pete Hays also had material roles.
Transocean general counsel Brady Long, senior associate general counsel Daniel Ro-Trock and deputy general counsel Dave Faure led the deal.
Seward & Kissel in New York was Ocean Rig’s U.S. legal advisor. Orrick represented an affiliated entity with attorneys in its New York office.
The financial advisors were Citi for Transocean, including Steve Trauber, Serge Tismen and Jason Howard, and Credit Suisse for Ocean Rig, including Jens Becker, Ryan Tull, Greg Weinberger, Yan Zhong and Theo Konstantatos.
Transocean will swap 1.6128 of newly issued shares of its stock plus $12.75 in cash for each share of Ocean Rig. That implies a value of $32.28 per Ocean Rig share, a 20.4 premium over Ocean Rig’s 10-day volume weighted average share price.
The buyer intends to fund the cash portion of the transaction with cash on hand and financing provided by Citi.
Transocean shareholders will end up with 79 percent of the combined companies while Ocean Rig will hold 21 percent.
The Ocean Rig purchase positions Transocean as the leader in ultra-deepwater and harsh environment drilling with a contract backlog of $12.5 billion.
It expects to close the transaction in the first quarter if it clears both companies’ shareholders and regulators and book annual cost synergies of $70 million as a result of the deal.
V&E, Latham aid on Southwestern’s $1.8B asset sale to Flywheel
As The Lawbook also previously reported, Southwestern Energy Co. has agreed to sell its Fayetteville Shale exploration and production and midstream assets to Kayne Anderson-backed Flywheel Energy for $1.865 billion, signifying Southwestern’s exit from the basin.
Vinson & Elkins counseled FlyWheel with a team led by partner Bryan Loocke and senior associate Danielle Patterson along with associates Erin Mitchell and Ben Glass. Partner Mike Telle, senior associate Matthew Falcone and associates Mike Marek and Nettie Downs advised on the corporate equity line.
Other Texas lawyers on the team were counsel Suzanne Clevenger and associate Lauren Miller on energy regulatory; partner Larry Nettles (environmental); partner Stephen Jacobson and associate Austin Light (executive compensation/benefits); partner Sean Becker (labor/employment); and partner Todd Way, senior associate Julia Pashin and associate Christine Mainguy (tax).
The V&E acquisition financing team was led by partner Guy Gribov with help from associates Jason Blackmer and Erin Webb.
Latham & Watkins represented Southwestern, including partners Jeff Muñoz and associates Chris Bennett, Bo Rose, Cassy Romano and Johnny Ellis.
Latham partner Tim Fenn and associate Jim Cole counseled on tax matters and partner Catherine Ozdogan on finance. The firm’s team on a conditional tender offer for up to $900 million of its senior notes was led by partners John Greer and Ryan Maierson, along with associates Monica White and Felicia Alexander.
Southwestern general counsel John Ale worked on the deal in-house along with associate general counsel Billy Dixon and Chris Lacy.
J.P. Morgan was Southwestern’s financial advisor, including Mark Deverka. Houlihan Lokey Capital Inc. also provided evaluation services to the company’s board, including Rob Teigman, Chris Croft, Kirk Tholen and Jerry Eumont.
The deal for the Southwestern assets also includes $438 million worth of contractual liabilities. The parties expect the transaction to close in December.
Southwestern said the action repositions it to deliver greater value from its higher-return Appalachian natural gas properties in West Virginia, which also produce oil.
The seller expects annualized interest and organizational cost reductions of $60 million to $75 million as a result of the action.
Akin, V&E, Orrick work on EagleClaw’s $950M Caprock purchase
EagleClaw, a midstream energy company owned by Blackstone, agreed to buy Energy Spectrum-backed Caprock for $950 million.
Caprock is focused on the Permian’s Delaware Basin in West Texas and New Mexico.
Akin Gump Strauss Hauer & Feld partners Tom McCaffrey and Patrick Hurley led the team counseling Blackstone and EagleClaw. Other members were partners William Morris, Robert Shearer, Andrew Lehman and Shar Ahmed; counsel Stephen Boone and Mary Lovely; and associates Jack Polisini and Matthew Turner.
Its Texas specialists were tax partner Alison Chen; senior counsel Vera Neinast on energy regulation, markets and enforcement; and labor and employment partner Brian Patterson.
Vinson & Elkins and Orrick, Herrington and Sutcliffe represented Caprock and Energy Spectrum.
The V&E corporate team was led by partners Mike Saslaw and John Grand and associates Robert Hughes, Robert Stelton-Swan and KJ Pedersen.
Other members were partner David Peck and associate Megan James (tax); partner Shane Tucker and counsel Katherine Mull (executive compensation/benefits); partner Sean Becker (labor/employment); and counsel Scot Dixon (real estate).
Also helping out were partner Larry Nettles and senior associate Matthew Dobbins (environmental); counsel Damien Lyster (energy regulatory); and partner Peter Mims (intellectual property). Lawyers in Washington, D.C. and New York assisted.
Partner David Ronn led the deal from Orrick with assistance from senior associate Ryan Giggs and a partner in the firm’s Washington, D.C. office.
The all-cash transaction is expected to close this year and will be funded with equity and committed debt financing from Barclays.
Evercore (Rob Pacha) and Barclays acted as financial advisors to Caprock and Energy Spectrum.
V&E also advised EagleClaw on the execution of definitive joint venture agreements with Kinder Morgan unit Kinder Morgan Texas Pipeline to proceed with the Permian Highway Pipeline Project after securing firm transportation agreements with shippers.
The team was led by partner Keith Fullenweider and senior associates Danielle Patterson and Benji Barron with help from associates Yong Eoh and Michael Zarcaro. Also advising were partner John Lynch and associate Brian Russell on tax.
Bracewell represented Kinder Morgan, including partner Jason M. Jean and associates Derek A. B. Speck, Kate B. McGregor and Lytch T. Gutmann.
Kinder Morgan lawyers involved included deputy general counsel Bill Wolf, assistant general counsel Melinda Winn, Steven Kolos and Patrick Stewart, chief tax officer Jordan H. Mintz and tax vice president Jeffrey A. Utay.
The $2 billion project will provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast.
EOG sells U.K. assets to Tailwind for estimated $300M
Tailwind Energy, which is backed by commodities trader Mercuria, said Sept. 4 it agreed to buy EOG Resources Inc.’s U.K. business for an undisclosed sum.
Reuters reported in April that the assets could fetch more than $300 million.
The parties’ outside counsel couldn’t be determined by press time.
Michael P. Donaldson has been general counsel of EOG Resources since 2012 after serving as deputy general counsel from 2010 to 2012.
Before that, the South Texas College of Law-trained attorney was general counsel at Todco and associate general counsel of Burlington Resources, held legal positions with Union Texas Petroleum and Pennzoil and practiced at Akin Gump Strauss Hauer & Feld.
Tailwind will end up owning and operating all of the producing Conwy oil field, a 25 percent non-operated interest in the Columbus gas development project and other minor asset interests in the North Sea.
Once the deal closes, Tailwind expects to produce 15,000 barrels of oil per day. The purchase has to clear regulators.
The transaction follows Tailwind’s purchase of Royal Dutch Shell’s and Exxon’s interests in the Triton oil cluster.
EOG has been centering its efforts on oil and gas plays like the Permian Basin and South Texas’ Eagle Ford Shale as well as other U.S. basins.
K&S aids Carlyle on wind farm purchase from Noble
King & Spalding advised the Carlyle Group on its purchase of six wind farms in New York from Houston-based Noble Environmental Power for an undisclosed sum.
The deal team was led by partner David Runnels, partner Roxanne Almaraz, senior associate Casey Ragan, associate Nathan Zhang and associate Josh Petersen, all of Houston. Counsel Rajesh Patel assisted on real estate matters.
Noble used attorneys at Morgan Lewis in New York.
Carlyle said Sept. 5 it made the acquisition through portfolio company Cogentrix Energy Power Management via its newly-established affiliate Zephyr Wind Energy. Equity capital for the transaction will come from Carlyle Power Partners II.
The 612-megawatt portfolio is the largest operating wind platform in New York and produces 29 percent of the state’s wind power. New York has targeted that half of the state’s electricity come from renewable resources by 2030.
The parties expect to close the acquisition in the fourth quarter if it clears regulators.
Cogentrix is an independent power producer specializing in the development, ownership, operations and management of coal-fired, natural gas-fired and solar power assets in most of the major power regions in the U.S.
The acquisition represents Cogentrix’s first investment in wind generation assets.
Leading the investment was Matt O’Connor, a managing director at Carlyle and head of Carlyle Power Partners, which will have 7,000 net megawatts after the deal closes.
Noble is a renewable energy company with a 726-megawatt generation portfolio made up of 484 GE wind turbines. It’s led by Noble president and CEO Kay McCall.
Carlyle has $210 billion in assets under management across 335 investment vehicles.
Sidley Austin, Orrick work on Stonepeak’s Paradigm sale to Ares
Sidley Austin represented Stonepeak Infrastructure Partners on the sale of portfolio company Paradigm Energy Partners to Ares Management.
Terms weren’t disclosed. Stonepeak invested $200 million in Paradigm in 2014.
The team was led by Tim Chandler and included partner Cliff Vrielink and associates Tommer Yoked and Nicole Lee.
Orrick counseled Ares, including partners Brad Gathright, Blake Winburne and Darrell Thomas. Associates were Adam Kowis, Mason Harry, Alessandra Grace, Andrea Memovic and Grace Lentz.
Ares announced the deal Sept. 6 through its power and infrastructure unit Ares EIF.
The assets will be combined with Ares EIF’s adjacent Van Hook Gathering System, which it acquired in 2015, to form a top regional midstream platform serving North Dakota’s Williston Basin with additional assets in the Eagle Ford Shale.
The combined entity will continue to be known as Paradigm and be operated by Paradigm’s management team and employee base.
The acquisition includes two oil and natural gas gathering systems in North Dakota and a third in South Texas along with joint venture interests in the Sacagawea Pipeline and logistics assets in North Dakota.
By the end of this year, the combined company is expected to transport nearly 50,000 barrels of oil and 23 million cubic feet of gas per day from 11 contracted customers in North Dakota and Texas.
Keith Derman is partner with Ares EIF and Scott Parkes is a principal.
Ares Management is a publicly traded global alternative asset manager with $121.4 billion in assets as of June 30.
Ares EIF-managed funds have made 70 equity investments in 130 different power and energy infrastructure assets with an enterprise value exceeding $20 billion.
Over the last 15 years, Ares EIF has invested in nearly 9,000 megawatts of new generation and transmission projects and 200 miles of greenfield pipeline projects representing $11 billion in capital costs.
Stonepeak raised $1.65 billion for its inaugural fund in 2013, $3.5 billion for its second fund in 2016 and $7.2 billion for its third fund this past July.
Private equity firm Satori Capital raises $52.65M for its third fund
Dallas private equity firm Satori Capital raised $52.65 million for its third fund, according to a filing with the Securities and Exchange Commisson.
Co-general counsel and COO William Holloway wouldn’t reveal the firm’s in-house or outside legal counsel on the fund.
Holloway joined Satori Capital in 2016 after 15 years at Q Investments, a multi-billion-dollar private investment firm where he led, structured and managed hundreds of investments in dozens of countries. He also managed Q Investments’ private market investing divisions, operations and personnel.
Before joining Q Investments, Holloway practiced at Gibson, Dunn & Crutcher, where he structured mergers and acquisitions, private equity investments and investment funds and partnerships. He has served as an adjunct faculty member at Southern Methodist University’s Dedman School of Law, where he earned his law degree. He also has an LLM in taxation from New York University School of Law.
Satori makes majority and minority investments in expanding middle-market companies with annual Ebitda of $5 million to $25 million.
Its current investments include 24 Hour Fitness, Longhorn Health Solutions and SunTree Snack Foods.
Satori’s exits have included coatings manufacturer California Products Corp., which it sold to Audax Private Equity in 2015; electricity steel structure maker FWT (Kohlberg & Co. in 2015); and Novaria Group/Fitz Aerospace (now owned by Rosewood Private Investments).
V&E, Akin work on Talos’ $52M purchase of Apollo-backed Whistler II
Publicly traded Talos Energy Inc. said Sept. 4 it completed its acquisition of Apollo-backed Whistler Energy II for $52 million.
Vinson & Elkins counseled Whistler with lawyers in its New York office and in Houston, including Mingda Zhao, Johnathan Slaybaugh, Brad Foxman, Guy Gribov, Wendy Salinas and Ben Glass.
Dave Sweeney and Andy Lehman, partners at Akin Gump Strauss Hauer & Feld, led the group representing Talos.
Other Akin attorneys on the deal were partners John Goodgame, Jocelyn Tau, Brian Patterson and Eric Munoz; counsel Stephen Boone and Jon Boben; senior counsel David Staber; senior practice attorney Shane Sullivan; and associates Niki Roberts and Savannah Raymond.
UBS managing director Miles Redfield was Whistler’s transaction advisor.
Bill Moss is Talos’ general counsel. Before joining the company in 2013, the University of Texas-education lawyer was a partner at Mayer Brown, where he was the head of the Houston corporate practice and outside legal counsel for Talos. He also practiced at Baker Botts.
Talos said Whistler’s assets, all in the Green Canyon area of the Gulf of Mexico, produced 1,900 barrels of oil equivalent per day on a gross basis so far this year and 1,500 barrels of oil equivalent per day on a net basis after royalties, 82 percent of which is oil.
The Green Canyon 18 field was originally developed by ExxonMobil and sold to Whistler in 2012. It has cumulative production of over 117 million barrels of oil equivalent to date.
As part of the deal, Talos negotiated the release of $77 million in cash collateral that had secured Whistler’s surety bonds that Talos won’t need to replace. As a result, of the cash collateral released, Talos received $31 million with Whistler entitled to the remaining $46 million.
Talos said it also benefited from the $7 million available cash balance at Whistler at the time of the close, resulting in a net cash consideration of $14 million to Talos.
Talos said the transaction represents a win for both companies, as the seller received $100 million in cash but Talos’ net cash payment was only $14 million, which represents an acquisition metric of $9,333 per net barrel of oil equivalent.
Talos president and CEO Timothy S. Duncan said in a statement that the bolt-on transaction has low entry costs, production facilities with unused capacity and new seismic in a known area for prolific hydrocarbons.
Locke Lord advises Main Street Capital invests $41.25M in SI East
Main Street Capital Corp. said Sept. 6 that it led an investment in SI East, a new entity formed to facilitate General Steel Drum’s acquisition of North Coast Container Corp.
The deal creates a top manufacturer of new steel drums in the North American market.
Main Street, along with an unnamed co-investor, partnered with General Steel Drum’s owners, the Stavig family, to facilitate the transaction. Main Street funded $41.25 million in a combination of first-lien, senior secured term debt and a direct minority equity investment.
Main Street and its co-investor also are providing SI East with an undrawn credit facility to support its organic and acquisition growth initiatives and working capital needs.
Locke Lord partner Greg Heath counseled Main Street, whose general counsel is Jason Beauvais.
Before joining Main Street in 2008, Beauvais was an attorney at Occidental Petroleum Corp. and practiced corporate and securities law at Baker Botts.
General Steel Drum and North Coast Container make new steel drums from manufacturing facilities in Charlotte and Cleveland, respectively. They will continue to operate as separate legal entities.
The Stavig family separately owns and operates Myers Container and Container Management Services on the West Coast.
Main Street’s lower middle market companies generally have annual revenues between $10 million and $150 million.
Egan Nelson counsels Liongard on $1.25M in seed funding
Egan Nelson’s Brian Alford advised Liongard on its $1.25 million in seed funding, which exceeded its $1 million goal.
The investors included Station Houston Ventures, Gestalt Cybersecurity, Houston Angel Network, TiE Houston and UH Cougar Venture Fund. Others were Rackspace founder and former CEO Richard Yoo and Yodle (previously ProfitFuel) founder Jared Slosberg.
Founded in 2015, Liongard is a Houston provider of advanced data automation solutions to managed service providers, or MSPs.
Joe Alapat told The Lawbook that the company has been working on gaining traction and recently hit the 20-plus customer mark. “As we continue to bring on more customers, our plan is to move to a Series A capital raise by early next year,” he said.
Liongard said its product Roar delivers deep, accurate and up-to-date documentation of information technology asset details and metrics to MSP teams so they don’t have to input them manually and can better manage and protect their customers.
Alapat and co-founder and COO Vincent Tran operated and sold their previous company and set out to empower other MSPs to protect customer IT environments at scale.
John Reale led the investment from Station Houston Ventures, which previously invested in Graylog and Ambyint.
V&E advises Spredfast on merger with Vista-backed Lithium
V&E said it advised Austin-based Spredfast Inc. on its sale to Vista Equity Partners-backed Lithium Technologies for undisclosed terms.
The V&E corporate team was led by partner Wes Jones with assistance from associates Michael Gibson, Luke Thomas and Alex Turner.
Specialists included partner Todd Way, senior associate Julia Pashin and associate Megan James (tax); partner Shane Tucker and senior associate Heather Johnson (executive compensation/benefits); partner Sean Becker and associate Alex Bluebond (labor/employment); partner Devika Kornbacher and associate Sean Hill (intellectual property); and partner Ramey Layne (corporate).
Kirkland & Ellis counseled Vista/Lithium out of San Francisco.
The parties claim the combination creates the industry’s most comprehensive customer engagement platform, transforming how companies connect with customers to earn trust, drive brand loyalty and expand their businesses.
With a combined customer base of 2,000 brands spanning 100 countries, Lithium said it and Spredfast will manage 500 million consumer touch points every day across social media, messaging and owned digital channels.
Lithium CEO Pete Hess will continue as CEO of both companies while Spredfast chairman and CEO Rod Favaron will help with the transition.
Alan Cline is a principal at Vista, which has an office in Austin as well as in San Francisco, Chicago and Oakland.
Growth Catalyst Partners funds email marketer Trendline Interactive
Growth Catalyst Partners made an unspecified investment in Austin email market agency Trendline Interactive, which bought email delivery and privacy consulting firm Inbox Pros for undisclosed terms.
Jim TenBroek, Scott Peters and James O’Callaghan co-led the investment for Growth Catalyst Partners and the transaction was proprietarily sourced.
McGinnis Lochridge represented Trendline Interactive, including partner Cliff Ernst and associate Shana McGirl in Austin. Dickinson Wright was Growth Catalyst Partners’ outside legal counsel and Patel Burkhalter Law Group in Atlanta was Inbox Pros’ outside legal counsel.
Trendline’s clients include AARP, USA Today, Allstate, Carnival Cruise Lines, WebMD and Banfield Pet Hospital.
Morgan Stewart is CEO and co-founder of Trendline while Andrew Kordek is its chief strategist and co-founder. Inbox founder Chris Arrendale will become Trendline’s chief privacy officer.
James O’Callaghan led the investment from Chicago-based Growth Catalyst Partners.
V&E advises Vapor IO on funding from Berkshire
V&E advised Vapor IO on its Series C funding round led by private equity firm Berkshire Partners.
Current investor Crown Castle also participated. The parties didn’t disclose the sum.
The V&E corporate team was led by counsel Andy Smetana in Austin with assistance from counsel Wes Watts and associates Chase Dalton and Luke Thomas. Also advising were partner Stephen Jacobson and senior associate Dario Mendoza on executive compensation/benefits.
J.P. Morgan Securities was Vapor IO’s financial advisor.
Vapor IO claims to have developed the first fully-integrated hardware and software solutions for edge computing.
The new investment will be used to launch Vapor IO’s Kinetic Edge colocation and interconnection services while expanding its footprint of edge data centers, from 13 by the end of this year to 100 by 2020 in the top 20 markets.
Vapor IO said it’s expanded its partnership with Crown Castle, which is a large provider of communications infrastructure.
Cole Crawford is founder and CEO of Vapor IO. Phil Kelley is Crown Castle’s senior vice president of corporate development and strategy.
Founded in 1986, Boston-based Berkshire has raised nine private equity funds amounting to $16 billion in capital and made 125 investments in primarily middle market companies.
Berkshire is current investing out of its $5.5 billion ninth fund raised in 2016. It typically commits $50 million to $500 million in each of its portfolio companies.