(July 31) – What a difference a week makes.
On July 23, The Texas Lawbook’s Corporate Deal Tracker reported that the prior week’s transactions handled by in-state lawyers only amounted to $2.13 billion – a pittance compared with the yearly high hit in May of $20.4 billion.
But this past week came close to the 2018 record. Helped along by BHP Billiton’s massive sale of its U.S. shale assets to BP and Merit Energy for $10.8 billion, the deal activity reached $15.1 billion.
The week wasn’t all about asset sales. There was news of initial public offerings and secondaries and an energy-related private equity firm closing on a $1 billion fund. There also were purchases of small companies by larger ones in oil and gas and other industries, including telecom, aerospace and technology.
Thirteen law firms and 95 lawyers advised on 15 deals, versus 15 law firms and 74 lawyers on 16 deals the previous week. Capital markets transactions made up four of the transactions valued at more than $1.2 billion.
If predictions prove correct, there’s going to be plenty of work to keep them and other Texas lawyers busy on transactions through the end of the year.
Three Texas firms work on BHP’s $10.8B U.S. shale sale to BP, Merit
As The Lawbook reported last week, three Texas law firms were involved in BHP Billiton’s sale of U.S. shale properties for $10.8 billion in cash.
The buyers were BP, which picked up BHP’s Eagle Ford, Haynesville and Permian properties under the Petrohawk unit for $10.5 billion; and Merit Energy, whose MMGJ Hugoton III unit agreed to acquire BHP’s Fayetteville Shale assets for $300 million.
Baker Botts said a Houston team represented Australia’s BHP Billiton, with partner Erin Hopkins leading the Petrohawk sale and partner Craig Vogelsang heading the Fayetteville divestiture.
Other team members were partners Jon Lobb, Jason Bennett, Scott Janoe and Rob Fowler; senior associates Lindsey Swiger, Luke Burns and Kasyn Stevenson; and associates Alia Heintz, Kyle Doherty, Katie McEvilly, Tiffany Sumrall, Joyce Banks, Justin Clune, Marcella Lunn, Taylor Lopez and Munir Saadi.
Foley Gardere partners Tim Spear and Eunice Song in Houston advised BP. Spear previously was an associate at Baker Botts.
Locke Lord counseled Merit with a team that included partners Van Jolas and Jason Schumacher in Dallas; counsel Bryan Bishop (Dallas); and partners Will Becker (Dallas), Ed Razim (Houston), Paul Nason (Dallas), Jerry Higdon (Houston), Michelle Earley (Austin) and Geoff Polma (Dallas).
The associates were Henry Benton, Nathan Crow and Stephanie McDermott, all of Dallas.
Merit Energy’s general counsel is Chris Hagge and its corporate counsel is Kathryn “Kat” Lyles.
The divestitures need to clear regulators but are expected to close by the end of October.
The sale of BHP’s U.S. shale assets has long been expected, but reports in June said the divestiture might be delayed until next year.
The bidders were thought to include Royal Dutch Shell partnering with the Blackstone Group; Chevron partnered with Warburg Pincus; and Apollo Global Management.
BP said the BHP purchase was a “transformational” deal that reinforces its position as the top onshore oil and gas producer in the U.S.
Four Texas firms aid on Chesapeake’s $2B asset sale to Encino
As The Lawbook also detailed last week, Gibson, Dunn & Crutcher represented Encino Energy on its purchase of Utica Shale properties from Chesapeake Energy for $2 billion.
The deal team led by partner Justin Stolte in Houston along with a partner the firm’s Denver office.
The team also included Texas associates Dave Cias, Matt Savage, Jordan Silverman, Graham Valenta and Eric Haitz.
Houston partner James Chenoweth assisted on tax matters and attorneys in Washington, D.C., New York and San Francisco helped on issues involving benefits, the Committee on Foreign Investment in the U.S., known as CFIUS, and environmental matters.
Kirkland & Ellis counseled Encino on underwritten financing from a syndicate of financial institutions. That team was led by debt finance partners Will Bos and Andy Veit and associate Chad Nichols and included capital markets partner Matt Pacey.
Latham & Watkins represented the banks, including partner Michael Chambers.
Shearman & Sterling counseled Chesapeake, with Houston partner Jeremy Kennedy said to be involved (he worked on deals for the natural gas producer when he was at Baker Botts). Kennedy said he couldn’t comment.
Canada Pension Plan Investment Board, known as CPPIB, and Encino formed Encino Acquisition Partners, or EAP, in 2017 to acquire large, high-margin oil and gas production and development assets in the lower 48 states.
CPPIB will invest about $1 billion in EAP and will own 98 percent of the partnership. Houston-based Encino, led by Hardy Murchison, will invest in EAP alongside CPPIB and operate the acquired assets.
The transaction is expected to close in the fourth quarter.
Oklahoma City-based Chesapeake has been paring assets to pay down its heavy debt load, which was accumulated under the late CEO Aubrey McClendon as part of his expansion drive.
Thompson & Knight counsels on Tailwater’s $1B third fund
Thompson & Knight said July 25 it counseled longtime client Tailwater Capital on the formation of its third fund, which raised $1 billion in commitments.
The deal team was led by partners Wesley P. Williams and included partners J. Holt Foster, III, J. Dean Hinderliter, and Jason P. Loden and associates Nathan W. Stone, Marc A. Lombardi and Kathleen Gerber. Partner Michele “Mitch” L. Gibbons also was on the team.
Capstone Partners was the fund’s placement agent.
Tidewater Energy Fund III, the private equity firm’s largest to date, was oversubscribed. It reached a hard-cap of $900 million and raised a $100 million co-investment for a platform company in the fund.
The Dallas-based firm partners with management teams in the midstream, or infrastructure, part of the energy sector. It’s led by founding partners Jason Downie and Edward Herring, who have worked together for nearly two decades and executed more than 100 transactions in the energy sector representing $18.8 billion in transaction value (they previously were at HM Capital, which grew out of Hicks Muse Tate & Furst).
Since launching in 2013, Tailwater has raised more than $2.7 billion across its funds and co-investments. The firm will continue to focus on acquiring and expanding midstream assets and participating in non-operated upstream opportunities in select basins through the firm’s E&P Opportunity funds.
Tailwater said it’s already committed a substantial amount of the third fund across six platform companies and has a robust pipeline of new teams and add-on opportunities.
Tailwater’s prior midstream fund, Tailwater Energy Fund II, closed at $650 million in 2014.
V&E advises Reata Pharmaceuticals on its $216M stock offering
Vinson & Elkins said July 25 it advised Irving-based Reata Pharmaceuticals Inc. on its public offering of 3 million shares of Class A common stock at $72 per share, raising $216 million.
The corporate team was led by partner Robert Kimball with assistance from senior associate Katherine Frank and associates Desi Baca and Grace-Ann Duquette. Partner Jim Meyer and associate Glen Ellsworth advised on tax issues.
Cooley counseled the underwriters, which included Jefferies, Leerink Partners, Stifel, Nicolaus & Co. Inc. and Cantor Fitzgerald & Co. Ladenburg Thalmann & Co. Inc. is co-manager for the offering.
Reata’s general counsel is Mike Wortley, a former Vinson & Elkins partner who was one of The Lawbook’s Lions of the Texas Bar.
The clinical-stage biopharmaceutical company plans to use the proceeds for working capital and general corporate purposes.
Those purposes could include advancing the development of bardoxolone methyl and omaveloxolone through clinical trials, preparing to file one or more new drug applications and planning for commercialization of its potential products, the company said.
Jones Day advises Big Red on $200M stake sale to Keurig Dr Pepper
Jones Day said several of its Texas lawyers advised Big Red on the sale of its remaining shares to Keurig Dr Pepper for a reported $200 million.
The team included associates Bobby Cardone, Michael Walraven, Sarah Aboukhair, Amy Chen and Kelly Rubin, partner Andrew Van Noord and associate Victoria Acuff.
Big Red’s financial advisor was Rothschild Global Advisory.
Keurig Dr Pepper’s legal advisor was Skadden, Arps, Slate, Meagher & Flom, although no one in the firm’s Houston office.
Headquartered in Austin, Big Red is a soft drink company with concentrate manufacturing operations in Waco. The transaction is expected to close in the third quarter.
The Keurig Dr Pepper merger, which closed last week, created a beverage giant with $11 billion in sales. It’s backed by JAB Holding, which also owns Krispy Kreme and Panera Bread and distributes other drink brands including Fiji Water, BodyArmor and Vita Coco.
Fiji announced this past week that it was going to build its own distribution system.
V&E advises Spartan Energy on planned $400M IPO
Spartan Energy Acquisition, a New York special purpose acquisition, or blank check, company, filed for a $400 million initial public offering with the Securities and Exchange Commission.
The Apollo Global Management-backed company plans to sell 40 million units priced at $10 each. It aims to list the company on the New York Stock Exchange under the symbol SPAQU.
Vinson & Elkins is advising Spartan, including partner E. Ramey Layne along with another partner in New York.
Kirkland & Ellis lawyers in New York are representing the underwriters, which include Citi and Credit Suisse.
Spartan intends to acquire a business in the energy industry. Apollo has previously made acquisitions in the oil and gas exploration and production, infrastructure and energy services parts of the sector.
Its management includes CEO Geoffrey Strong, a senior partner at Apollo; CFO James Crossen, who has the same role at Apollo; and director Greg Beard, who is global head of natural resources and a senior partner at Apollo.
Another director is Robert Reeves, who was CEO of Apollo-backed Athlon Energy until its $7.1 billion sale to Encana in 2014. He also was CFO of Encore Acquisition Co. and Encore Energy Partners until their $4.5 billion sale to Denbury Resources Inc. in 2010.
Baker Botts, V&E, Norton Rose Fulbright aid Hi-Crush on deal, financings
Frac sand provider Hi-Crush Partners said July 23 it expanded its “last mile” transportation and management capabilities with its $60 million acquisition of FB Industries.
The price includes $45 million in cash and $15 million in common units to FB’s owners, who include Henry Friesen, his son Tyler Friesen and his son-in-law Jon Doel.
Houston-based Hi-Crush also launched a $450 million senior notes offering.
Baker Botts was Hi-Crush’s outside counsel for the FB acquisition, including partner Edward Rhyne in Houston.
Latham & Watkins represented the underwriters, including Houston partners Michael Chambers and David Miller.
Vinson & Elkins partner Ramey Layne is helping it on a high-yield bond offering of senior unsecured notes to help fund the deal. Norton Rose Fulbright senior associate Ben Ratliff was its outside counsel on a $200 million credit agreement.
The senior secured facility will replace Hi-Crush’s existing revolver. The initial available borrowings are expected to be $120.4 million net of letter-of-credit commitments. JPMorgan Chase Bank is the administrative agent and an issuing lender.
Hi-Crush’s in-house counsel on all three deals were assistant general counsel Melissa McEllin and senior counsel Jayne Wabeke.
Former Fulbright partner William Barker is the principal strategy officer at Hi-Crush and Mark Skolos is its general counsel.
The acquisition is part of Hi-Crush’s strategy to extend its position as the most integrated mine-to-wellsite supplier of proppant and logistics services to the petroleum industry. The deal is expected to close this quarter.
FB Industries is a top maker and marketer of silo-based frac sand management systems.
Hi-Crush CEO Robert E. Rasmus said its customers are seeking more integrated relationships with suppliers who can deliver a full range of frac sand and logistics needs.
With the completion of the acquisition and execution of its development projects, Hi-Crush said it will operate 17.3 million tons per year of frac sand capacity.
Hi-Crush CFO Laura C. Fulton said the company continues to expect demand for frac sand to jump to more than 110 million tons this year and even higher next year.
“The tightness in reliable sand supply, resulting from this significant demand growth, as well as delays in our competitors’ announced construction projects, puts an even greater emphasis on the need for a fully-integrated frac sand supply and logistics provider,” she said.
V&E advises EQT on sale of Tampnet to 3i Infrastructure, ATP
Vinson & Elkins said July 27 it advised EQT Infrastructure on its agreement to sell offshore communication provider Tampnet AS to investor 3i Infrastructure plc and Danish pension provider ATP Group for undisclosed terms.
Texas team members included lead partner Mike Saslaw, associate Austin Elder, counsel Prentiss Cutshaw and associate Ken Adler, all in the Dallas office.
Advokatfirmaet Selmer in Oslo also counseled EQT, whose financial adviser was Citigroup.
Tampnet is the owner and operator of the world’s largest offshore fiber-backed communication infrastructure network with operations in the North Sea and the Gulf of Mexico.
EQT acquired Tampnet in 2012. It expanded its sales and Ebitda more than threefold and its employees twentyfold while closing and integrating strategic acquisitions and investing in offshore communication infrastructure within existing and new offshore regions.
Helge Svensson is CEO of Tampnet while Masoud Homayoun is a partner at EQT Partners, the investment advisor to EQT Infrastructure.
The sale has to clear regulators in several jurisdictions, including the Federal Communications Commission, and is expected to close next year.
EQT has raised $58.3 billion in capital across 27 funds. The funds have portfolio companies in Europe, Asia and the U.S. with sales of more than $22 billion and 110,000 employees.
Baker Botts advises Halliburton on Athlon Solutions purchase
Halliburton said July 24 it acquired family-owned Athlon Solutions, a provider of specialty water and process treatment chemicals and engineering solutions, for an undisclosed sum.
Athlon will become part of the Halliburton Multi-Chem business line, a provider of specialty oilfield chemicals for stimulation, midstream, and production customers.
Baker Botts represented Halliburton, including partner Jim Marshall, senior associate Carina Antweil and associates Jamie Yarbrough and Gita Pathak.
The tax partner was Ron Scharnberg, the environmental partner was Aileen Hooks and the employee matters special counsel was Chris Pratt. The team also included antitrust lawyers in the firm’s Washington, D.C. office.
Robb Voyles is Halliburton’s general counsel, having joined the company in 2013 after practicing at Baker Botts.
Halliburton said combining the two companies will strengthen its chemicals technology, manufacturing and supply chain. It also enhances Multi-Chem’s ability to deliver technical solutions to its customers and provides Halliburton with its first chemical manufacturing plant with full reaction and blending capabilities.
Athlon, led by CEO and president Tom Amonett, is headquartered in Houston and has 250 employees. It serves global customers as well as all major refinery and petrochemical areas in the U.S.
Athlon’s roots started in West Texas in 1953 with the founding of a small oilfield company, Champion Chemicals Inc. In 1990, it changed its name to Champion Technologies, which was sold to Ecolab in 2013.
The Johnson and Lindley families acquired Champion Technologies’ refinery process and water treatment business units and formed Athlon Solutions to operate the process and water treatment units as one independent company.
Foley Gardere counsels Rosewood-backed Novaria on John Hassall sale to KLX
Foley Gardere said it counseled Rosewood Private Investments-backed Novaria Group on its sale of John Hassall’s laboratory operations to KLX Inc. for an undisclosed sum.
Partners Chris Converse and Chris Babcock in Dallas were the leads for Novaria. KLX used in-house counsel in Miami.
KLX is a distributor and service provider of aerospace fasteners and consumables. It said the newly acquired capabilities will allow it to provide the additional required testing to support the quality requirements of its customer base.
Novaria, which is also backed by Tailwind Advisors, makes fasteners and critical components used exclusively in aerospace and military markets.
Novaria also formed a strategic partnership with KLX, which will have exclusivity on some of Novaria’s product lines and production capacity and preferred pricing for certain products and programs.
Novaria CEO Bryan Perkins said in a statement that the transaction and strategic partnership deepen Novaria’s exposure to aerospace programs while providing KLX greater sourcing and access to Novaria’s proprietary products and capabilities.
Foley Gardere represents Strait Lane on Griswold sale
Foley Gardere partner Chris Converse also led a team in completing the lifecycle representation of a Strait Lane Capital Partners’ portfolio company.
Dallas-based Strait Lane acquired Connecticut-based rubber and urethane foam product maker Griswold back in 2015 and recently finalized the sale of the company to publicly-listed Rogers Corp. for undisclosed terms.
Other Foley team members on the sale were partner Chris Babcock, special counsel Jon Bull and associates Austin Poynter and Arthur Vorbrodt, all of Dallas.
Lincoln International was Griswold and Strait Lane’s financial advisor.
Strait Lane said the investment resulted in an effective multiple of invested cash of 3.3 times and an internal rate of return of 54 percent.
The Griswold sale represents Strait Lane’s second exit this year and its third overall. The firm said the realized value in excess of the original investment for the three transactions and its other unrealized investments exceeds $100 million.
Bertram acquires BearCom from LKCM Headwater
Bertram Capital said earlier this month it acquired LKCM Headwater-backed two-way radio dealer BearCom with management for undisclosed terms.
Hirschler Fleischer in Richmond, Virginia, and Charlotte-based Moore & Van Allen provided outside counsel on the deal. BlackArch Partners was BearCom’s financial advisor.
Jacob D. Smith is a prinicipal of LKCM Headwater and also serves as its general counsel and chief compliance officer.
Before joining LKCM in 2006, Smith was an enforcement attorney with the SEC. The SMU-trained lawyer previously was a corporate/securities attorney at Haynes and Boone.
LKCM Headwater is co-headed by Corby Robertson III, the great-grandson of onetime Texas oil magnate Hugh Roy Cullen who also heads Quintana Capital. LKCM has offices in Fort Worth and Houston.
Garland-based BearCom was founded in 1981. It has 53 branches in the U.S. and Canada and has served 20,000 customers.
San Mateo, California-based Bertram Capital said the investment is its fifth platform acquisition completed out of its recently closed third fund. It has $1.4 billion in committed capital.
JCM, Katten advise on Trinity Hunt’s purchase of Improving
Trinity Hunt Partners said July 26 it acquired Improving, a Dallas provider of technology and software development services, for undisclosed terms.
Improving used Jones Carr McGoldrick partner Chris Carr for outside counsel. Dallas-based Trinity Hunt tapped Victor Zanetti, a partner at Katten Muchin Rosenman, which he joined in February from Andrews Kurth.
Improving was co-founded in 2007 by CEO Curtis Hite and has since expanded via acquisitions into the Houston, Minneapolis, Calgary, Columbus, Cleveland and College Station markets.
Trinity Hunt is partnering with Hite and the company’s managers, who will remain significant shareholders to help it expand organically and through acquisition.
Trinity Hunt is a middle market private equity firm originally sponsored by the Lamar Hunt family and Capital Z Investment Partners. It has invested in more than 60 platform companies over the last 25 years and has $715 million under management. Blake Apel and Scott Colvert are among its partners.
Locke Lord counsels ConnectGen management on Clean Line acquisition
Locke Lord said July 26 it represented the management team at ConnectGen on its acquisition of the non-transmission development assets of Clean Line Energy Partners. ConnectGen also is getting an undisclosed investment from Quantum Energy Partners through Quantum Energy Partners Fund VII.
The assets include a 600 megawatt wind project and several utility-scale wind and battery storage development projects. Clean Line is keeping its transmission assets.
The deal was led by Locke Lord partner Mitch Tiras, who had assistance from partner Sara Longtain and associate Rachel Fitzgerald, all of Houston. Latham & Watkins partner Jesse Meyers in Houston advised Quantum.
Quantum said July 26 it brought on Gabriel Alonso as executive in residence to identify, evaluate and execute on investment opportunities across the renewable and technology segments of the energy industry.
Alonso was previously CEO of Energias de Portugal unit EDP Renewables North America. He led EDPR’s entrance into U.S. renewables through the acquisition of Horizon Wind Energy in 2007.
The unit eventually became the fourth largest renewable energy operator in North America, expanding its installed capacity from 800 to 6,000 megawatts.
ConnectGen will be led by ex-Horizon executives Jayshree Desai as president and David Berry as CFO and strategy chief.
Dheeraj Verma is leading the investment from Quantum, which has managed with its affiliates more than $16 billion in equity commitments since inception.
UPDATE
Berry Petroleum Corp. ended up raising $183 million in its initial public offering. The issue priced at $14, below its $15 to $17 expected range, and issued 13 million shares, versus the 18.8 million shares it initially projected.
According to Renaissance Capital, Bakersfield, California-based Berry is the first oil and gas exploration and production company to go public in more than a year.
The company generated sales of $357 million for the 12 months ending March 31.
As The Lawbook previously reported, V&E represented the company with a team led by partners Doug McWilliams and Sarah Morgan.
Other team members that we hadn’t reported were senior associate Scott Rubinsky and associates McCall Grimes, Kathryn Hastings and Andrianna Frinzi.
Also offering assistance were partner Larry Nettles and senior associate Matt Dobbins on environmental matters; partners Jim Meyer and Wendy Salinas and associate Glen Ellsworth on tax; and partner Stephen Jacobson and associate Kristy Fields on executive compensation/benefits.
Gibson, Dunn & Crutcher partner Gerald Spedale, partner Shalla Prichard, tax partner James Chenoweth and associate Harrison Tucker counseled the underwriters, which included Goldman Sachs, Wells Fargo and BMO Capital. The stock trades on the NASDAQ under the symbol BRY.
Founded in 1909, Berry Petroleum owns oil and gas properties mostly in the San Joaquin Basin in California but also in the Uinta Basin in Utah, the Piceance Basin in Colorado and the East Texas Basin.
Linn Energy bought Berry in 2013 for $4.3 billion. Linn later filed for bankruptcy in 2016 and Berry emerged as a standalone company in February of last year, along with Linn.