(Aug. 14) – It was hard to beat the week before last, but this past week was still respectable in terms of M&A and capital markets transactions involving Texas lawyers.
There were 12 transactions announced worth $19.9 billion, versus the previous week’s 16 deals worth $68.6 billion (thanks to Energy Transfer Equity’s $62 billion purchase of Energy Transfer Partners).
Twelve law firms and 132 Texas lawyers were involved in the activity, versus 11 firms and 106 attorneys the previous week.
Nine of the transactions were M&A-related worth $18.889 billion involving 12 law firms and 114 Texas lawyers. Three deals were capital markets transactions valued at $1.011 billion that involved four law firms and 18 Texas lawyers.
Houston-based Vinson & Elkins chalked up four of the 12 deals while Latham had three and Akin, Gibson Dunn, Sidley and Thompson & Knight each had two.
It was all energy this week, except for a single financial services-related deal involving an affiliate of billionaire David Bonderman’s private equity firm TPG.
Quantum Energy raises $5.575B for seventh fund
Quantum Energy Partners said Aug. 7 it raised $5.575 billion for its seventh fund, above its $5.4 billion hard cap and a record for the private equity firm.
The firm’s outside counsel was a Sidley Austin partner out of Boston. Its inhouse counsel included partner and general counsel Jim Baird and deputy general counsel Lance Schuler, both former partners at the former Andrews Kurth.
While at AK, Baird was primary legal counsel on almost all of Quantum’s transactions for its second and third funds. He has his law degree from Southern Methodist University. Schuler studied law at the University of Texas.
Houston-based Quantum invests across the energy value chain and has managed $16 billion in equity commitments since 1998.
The firm is led by founder and CEO Wil VanLoh and president Dheeraj Verma, who said the energy sector remains an attractive place for private capital to play an outsized role, particularly in North America.
Bracewell, Latham aid on $3.5B Kayne Anderson/Apache creation Altus Midstream
As The Texas Lawbook previously reported, Apache Corp. announced Aug. 8 it planned to contribute its midstream assets at its Alpine High prospect in West Texas to Altus Midstream, a partnership it will own with Kayne Anderson Acquisition Corp. (KAAC) that will have an initial value of $3.5 billion.
KAAC is a special purpose acquisition (SPAC), or “blank check,” company founded by alternative investor Kayne Anderson Capital Advisors. It trades on the Nasdaq.
When the deal closes, KAAC will be renamed Altus Midstream Co. and be anchored by almost all of Apache’s gathering, processing and transportation assets at Alpine High, an unconventional resource play in the Delaware Basin announced in 2016.
Altus also will own options for equity participation in five long-haul pipeline projects Apache has in the works from the Permian Basin to various points along the Texas Gulf Coast.
Bracewell was Apache’s legal advisor on the deal. The team included partners Alan Rafte, Jason Jean, Troy Harder, Bruce Jocz and Aaron Roffwarg. Counsel and associates were Allison Perry, Derek Speck, Jared Berg, Patrick Johnson and Jay Larry.
P. Anthony Lannie is general counsel of Apache, where he has served in the legal department since 2003. Before that the Vanderbilt-educated lawyer was president of Kinder Morgan Power, president of Coral Energy Canada in 1999 and general counsel of Coral Energy and Tejas Gas.
Apache’s financial advisors were Barclays Capital Inc.’s Zach Jordan and Tudor, Pickering, Holt & Co.’s Aaron Blomquist and Matt Rollins.
Latham & Watkins counseled KAAC. That team included partners Jesse Myers, Bill Finnegan and Debbie Yee; associates Thomas Verity, Dan Harrist, Lexi Udeh and Rebecca Kendall; and tax partner Tim Fenn with associates Bryant Lee and Mike Rowe.
Citigroup was KAAC’s legal advisor, including Tim Kisling, Michael Jamieson, Claudio Sauer and Steve Trauber. Citigroup, Barclays and Credit Suisse were agents on a related private placement of Class A shares.
Altus will be a pure-play Permian Basin midstream C-corp with no incentive distribution rights. Apache will own 71 percent and have the ability to earn 37.5 million shares if certain share price and operational thresholds are met over the next five years.
KAAC is contributing $952 million in cash, including $380 million in proceeds from its initial public offering plus $575 million in proceeds from the private placement.
The transaction has to clear KAAC shareholders and is expected to close in the fourth quarter.
V&E, LL, PH, BB aid on Oxy’s $2.6B asset sale to Lotus, Moda
As The Lawbook also reported, Occidental Petroleum said Aug. 8 it was selling infrastructure assets to Lotus Midstream and Moda Midstream for $2.6 billion.
Marcia Backus is general counsel of Occidental, which she joined in 2013. The University of Texas-trained lawyer previously was at V&E, where she worked on transactions in more than 20 countries. She also served on the firm-wide management committee and as co-chair of the corporate department and chair of the partnership admissions committee.
Oxy’s financial advisors included Citi’s Michael Jamieson, Tim Kisling, Jason Miner, Claudio Sauer and Steve Trauber.
Locke Lord counseled EnCap Flatrock Midstream, which backs both Lotus and Moda.
Partners Michael Blankenship, Bill Swanstrom and Steve Peterson worked on the Lotus deal, which involves acquiring the Centurion pipeline system and the Southeast New Mexico crude oil gathering system for what some estimated was more than $1 billion.
Also pitching in were partner Terry Radney, senior counsel Elizabeth Guffy and Max Stubbs and partner Van Jolas.
Paul Hastings is representing Sugar Land-based Lotus with a team led by energy M&A partner Jimmy Vallee and energy M&A associate Isaac Griesbaum. Assisting were energy M&A associates Monica Diddell and Stephen Perry and tax partner Greg Nelson along with attorneys at the firm’s offices outside of Texas.
Barclays provided financial advice to Lotus, including Zach Jordan and Nelson Mabry.
EnCap Flatrock sponsored Lotus in February with an initial capital commitment of $400 million and will provide additional financial support for the acquisition. Lotus is led by former executives at Sunoco Logistics, which is now part of Energy Transfer in Dallas.
Peterson, Swanstrom and Blankenship also led the Locke Lord legal team for EnCap on Moda, which bought the Oxy Ingleside Energy Center in Ingleside, Texas, and certain crude oil and liquefied petroleum gas infrastructure. The center links Eagle Ford Shale and Permian Basin production to domestic and international markets.
Other Locke Lord attorneys on the Moda deal were Jolas, Stubbs and senior counsel Mechelle Smith.
Baker Botts counseled Moda led by a partner out of the firm’s New York office. But senior associate Scott Looper in Houston, associate Kyle Doherty in Houston, partner Preston Bernhisel in Dallas, partner Bobby Philpott in Houston and senior associate Kevin Henderson in Dallas were part of the deal team.
Crain, Caton & James in Houston also provided Moda with legal advice. Guggenheim Securities was Moda’s legal advisor.
Moda was started by former executives at Oiltanking Partners after its sale to Houston-based Enterprise Products Partners.
Oxy has been selling assets in the U.S. and abroad to focus on expanding its production in the Permian, where it’s one of the top producers.
Sidley aids on Starwood’s purchase of GE’s debt unit for $2.56B
Sidley Austin advised real estate lender Starwood Property Trust Inc. on its Aug. 8 announced agreement to acquire GE Capital’s energy project finance debt business and loan portfolio for $2.56 billion, including $400 million of unfunded loan commitments.
Part of Sidley’s deal team was Irv Rotter, a project finance and infrastructure partner who splits his time between Houston and New York. Paul Hastings also worked on the deal with lawyers outside of Texas.
Starwood said the acquired business will leverage the experience of affiliate Starwood Energy Group, which specializes in energy infrastructure equity investments. It’s executed transactions with $7 billion in asset value since its 2005 inception.
The business includes a vertically integrated platform with 21 full-time employees across loan origination, underwriting, capital markets and asset management. The loan portfolio consists of 51 senior loans secured by energy infrastructure assets.
Starwood chairman and CEO Barry Sternlicht said in a statement that it’s been the company’s intention since it began Starwood Property Trust to build a multi-cylinder finance company. Himanshu Saxena is CEO of Starwood Energy Group.
Starwood expects the transaction to close this quarter and boost earnings.
The buyer plans to finance part of the deal with a new secured term loan facility from MUFG with an initial advance of $1.7 billion and committed capacity for future funding obligations in the loan portfolio.
The rest of the funding will come from its existing liquidity and a $600 million committed acquisition facility from Credit Suisse and Citigroup Global Markets Inc.
Sidley, V&E advise on Andeavor Logistics’ $1.55B asset purchase
Sidley Austin said Aug. 6 it counseled Andeavor Logistics’ conflicts committee on its purchase of assets from San Antonio parent Andeavor for $1.55 billion.
Also advising were partner Ryan Carney and associate Neil Clausen on tax; counsel Scot Dixon on real estate; and partner John Michael, senior associate John Slaybaugh and associates Megan Menniti and Emma Jiang on energy transactions/projects.
The deal included $300 million in cash and 28.3 million units.
The assets involve gathering, storage and transportation assets in the Permian Basin, including the RIO Pipeline; legacy Western Refining assets and associated crude terminals; and most of Andeavor’s remaining refining terminalling, transportation and storage assets.
The drop down also includes the Conan Crude Oil Gathering System and the Los Angeles Refinery Interconnect Pipeline.
Jefferies analyst Christopher Sighinolfi said future contributions from Andeavor’s Grey Oak Pipeline joint venture and Corpus Christi marine terminal could help further enhance Andeavor Logistics’ basin position.
Andeavor is in the midst of merging with Marathon Petroleum, a deal that is expected to close on Oct. 1 if it clears stockholders from both companies. The vote is set for Sept. 24.
V&E, Gibson aid on First Reserve’s $1.225B Deep Gulf sale to Kosmos
As The Lawbook also reported, private equity firm First Reserve announced Aug. 6 that it agreed to sell Deep Gulf Energy Cos. to publicly traded Kosmos Energy for $1.225 billion.
The deal, which marks the buyer’s entry into the Gulf of Mexico, included $925 million in cash and $300 million in shares.
Also advising were partners David Peck and Jason McIntosh on tax, Stephen Jacobson on executive compensation and benefits, Sean Becker on labor and employment, Larry Nettles on environmental and a partner in its Washington, D.C. office on regulatory issues.
Gibson, Dunn & Crutcher represented First Reserve. The team was led by a corporate partner in Denver but included Houston tax partner James Chenoweth. Davis Polk & Wardwell represented Kosmos Energy.
Barclays was First Reserve’s and Deep Gulf’s financial advisors. Lazard Freres and Moelis provided fairness opinions to the special committees of Deep Gulf’s vehicles involved in the transaction.
First Reserve first backed Deep Gulf’s management team, former executives at Mariner Energy, in 2005 and then two more times through separate vehicles.
T&K, Akin aid on Ajax’s Midland property sale to Diamondback for $1.2B
As The Lawbook also reported, Kelso-backed Ajax Resources said Aug. 9 it was selling its northern Midland Basin assets to Diamondback Energy for $1.2 billion.
The price included $900 million in cash and 2.58 million shares of Diamondback stock, subject to certain closing adjustments.
Thompson & Knight advised Kelso-backed Ajax with a team led by partner Robert P. Dougherty III.
Others included partners Wesley P. Williams, Debra J. Villarreal, J. Dean Hinderliter, Jason Patrick Loden, Anthony J. Campiti and William J. Schuerger and associates Courtney J. Roane, Catharine A. Hansard, Aaron C. Powell, and Minator Azemi.
Jefferies was Ajax’s financial advisor.
Partner Michael Byrd at Akin Gump Strauss Hauer & Feld represented Diamondback.
He was accompanied by partners Seth Molay and Matt Zmigrosky and partner Alison Chen on tax; senior counsel Irina Maistrenko; counsel Stephen Boone and James Robertson; senior practice attorney Shane Sullivan; and associates Niki Roberts, Jacob Johnson and Jiha Ko.
Assisting were attorneys in Akin’s Washington, D.C. and Los Angeles offices on environmental, labor/employment and antitrust matters.
In a separate transaction, Akin counseled Diamondback on a drop-down sale of 1,696 net royalty acres to Viper Energy Partners for $175 million. That deal, led by Molay and Byrd, is expected to close this month.
Randall Holder is general counsel of Midland-based Diamondback, which he joined in 2011. Before that the Oklahoma City University-trained attorney was general counsel of Great White Energy Services and R.L. Hudson & Co.
Ajax said the sale comes less than three years after acquiring the Yellow Rose field from W&T Offshore for $376.1 million. It expects to close the transaction on Oct. 31.
Latham, Gibson work on Matador’s $750M private offering
Latham & Watkins said Aug. 10 it represented Bank or America Merrill Lynch on Matador Resources’ $750 million private offering.
Doug Rayburn at Gibson Dunn in Dallas represented Matador, whose general counsel is Craig Adams.
Adams joined Matador in 2012 after working as a partner at Baker Botts and Thompson & Knight. He has his law degree from Texas Tech University.
The offering involves 5.875 percent senior unsecured notes due 2026 that will be issued at par. Matador said it boosted the size of the offering from the previously announced $700 million.
The offering is expected to close Aug. 21. Matador intends to use the net proceeds to purchase its outstanding 6.875 percent senior unsecured notes due 2023, redeem any outstanding tender notes and for other general working capital needs.
T&K advises Scott Energy Partners on its $500M fourth fund
Scout Energy Partners closed its fourth fund at its $500 million hard cap with Thompson & Knight partner Wesley Williams advising it, Scout managing director Jon Piot confirmed Aug. 13.
Buyouts reported last week that Scout already has deployed around 80 percent of the pool and that it expects to come back to market with Fund V later this year, citing sources.
Piot said the firm hasn’t set a date or amount for the fund yet but will probably have that information by the fourth quarter.
Scott Gladden is Scout’s vice president of land and legal. Before joining the firm last year, he was president of Tana Exploration Co., a unit of TRT Holdings that’s controlled by Dallas billionaire Bob Rowling.
The Baylor-trained lawyer previously was co-founder and executive vice president of land and business development at Principle Petroleum, counsel at Winstead and K&L Gates and general counsel at Merit Energy.
V&E, Porter Hedges aid on $220M Continental-Franco-Nevada JV
Vinson & Elkins said Aug. 6 it advised Oklahoma City-based Continental Resources on the formation of a minerals joint venture with Franco-Nevada Corp.
Franco-Nevada will pay $220 million for its initial interest in the joint venture. The parties committed to spend up to $125 million per year over the next three years to acquire additional minerals in the Scoop and Stack oil and gas plays in Oklahoma through the JV.
The V&E corporate team was led by partners Dave Oelman and John B. Connally and senior associate Matt Falcone with assistance from associates Claire Campbell and Kathryn Hastings. The tax team included partner Todd Way and senior associate Julia Pashin.
Porter Hedges partners James Thompson and Scott Muehlberger counseled Toronto-based Franco-Nevada. They had assistance from partners Nick Nicholas (corporate) and Geoff Schultz (tax).
RBC Capital Markets was Continental’s financial advisor.
V&E counsels TPG RE Finance Trust on $161M offering
Vinson & Elkins said Aug. 8 it advised TPG RE Finance Trust Inc. on its underwritten public offering of 7 million shares of stock.
Venable was the trust’s Maryland counsel. Sidley Austin represented underwriters Citigroup and Goldman Sachs.
Estimated gross proceeds were expected to be $140 million or $161 million if the underwriters exercised their 30-day option to purchase up to 1.05 million more shares.
The trust said it intends to use the net proceeds to originate or acquire loans secured by institutional-quality commercial properties, primarily first mortgage loans, and other investments involving commercial real estate.
It also may use part of the proceeds for working capital and other general corporate purposes, including repaying oustanding debt under the company’s secured revolving repurchase agreements and senior secured credit facility with Bank of America.
TPG RE Finance Trust focuses on originating, acquiring and managing first mortgage loans and other commercial real estate‐related debt instruments secured by institutional properties in the U.S.
It’s managed by TPG RE Finance Trust Management, part of TPG Real Estate, which is the real estate investment platform of billionaire David Bonderman’s private equity firm TPG.
Akin, Latham counsel on Rattler Midstream’s $100M IPO
Rattler Midstream, a Midland-based midstream infrastructure company being spun out by Diamondback Energy, filed plans for an initial public offering on Aug. 7 with a $100 million placeholder.
The company plans to trade on the Nasdaq under the ticker symbol RTLR with Credit Suisse as its lead underwriter.
Akin Gump Strauss Hauer & Feld partners Seth Molay in Dallas and John Goodgame in Houston are providing outside legal counsel. Latham & Watkins partners J. Michael Chambers and John M. Greer are assisting the underwriters.