Texas corporate dealmakers had a busy week. Southern Co., Schlumberger and ExxonMobil announced asset acquisitions and divestitures. Two Big Pharma companies did a $6.5 billion combo and a Houston food distributor expanded into Hawaii.
Fifteen transactions with a combined value of $10.5 billion were announced between Oct. 15 and Oct. 22. The companies employed ten law firms and 67 Texas attorneys to advise their clients.
Here is a summary of the week in Texas M&A and securities offerings:
Baker Botts advises Southern Co. on $1.7B in utility sales to South Jersey Industries
Baker Botts scored a sizable utilities deal this past week, advising Southern Co. on the sale of Elizabethtown Gas and Elkton Gas to South Jersey Industries for $1.7 billion.
The deal was led by one of the firm’s New York partners, but featured a slew of Texas lawyers, including senior associate Courtney Fore and associate Allison Lancaster in Austin on the corporate side; partner Mark Bodron in Houston on employee benefits; senior associate Chris Morales in Houston on tax; partner Jeremy Gott and senior associate Patrick Matthews in Dallas on real estate; and senior associate Paulina Williams in Austin.
Goldman Sachs was Southern’s financial adviser. Guggenheim Securities and BofA Merrill Lynch provided financial advice to Southern Jersey Industries, which received outside legal advice from non-Texas attorneys at Gibson Dunn & Crutcher.
Schlumberger acquires Canadian oil and gas assets with Torxen from Cenovus for $1B
Oilfield services giant Schlumberger made progress on its aim to expand its production management unit by pairing with Torxen Energy to buy oil- and gas-producing assets in Alberta, Canada, from Cenovus for $1 billion. Torxen, which is led by former Cenovus executive John Brannan, will operate the assets, although Schlumberger will own a majority stake and provide services around them.
Schlumberger general counsel Alex Juden didn’t respond to requests for the names of his in-house and outside counsel if he used any. Baker Botts has worked with the company on deals in the past, including its $12.7 billion acquisition of Cameron International in 2015 and its $11.3 billion purchase of Smith International in 2010, but didn’t counsel it on this one.
Juden has spent nearly 17 years working at Schlumberger, first as litigation counsel and later as general counsel for joint venture Schlumberger WesternGeco (he became GC in 2009). The Rice University and University of Houston law graduate previously held legal positions in various state and federal litigation practices after spending seven years in the U.S. Navy as an aviator.
Akin assists Genesis on sale of crude oil terminal to ExxonMobil for an undisclosed sum
Akin Gump Strauss Hauer & Feld’s Houston office advised longtime client Genesis Energy on its Oct. 18 sale of a crude oil terminal in Wink, Texas, to Exxon Mobil for undisclosed terms.
The deal team included partners Chris Centrich, Erik Shoemaker and Vince Kendrick. ExxonMobil used Hunton & Williams attorneys out of Richmond, Va.
ExxonMobil wouldn’t provide the names of inside counsel who worked on the deal, but its general counsel is Randall Ebner. Genesis’ general counsel is Kristen Jesulaitis, a University of Houston law grad who joined the company in 2011 after working as a corporate partner at Akin focused on the midstream energy sector.
The terminal is ExxonMobil’s first in the Permian Basin and will be anchored by the Delaware Basin acreage it acquired in January. Exxon Mobil’s entrance into midstream infrastructure in the area suggests that a large upstream deal could still be “in the cards,” analysts at investment bank Tudor, Pickering, Holt said in a note.
No outside Texas lawyers for Paradigm’s $500M sale to Emerson
St. Louis technology and engineering giant Emerson made another move toward expanding in the energy sector, announcing Oct. 16 that it was acquiring Houston-based oil and gas software provider Paradigm for $510 million. Emerson used Davis Polk lawyers in New York and Paradigm enlisted Kirkland & Ellis attorneys in New York as well.
Paradigm’s general counsel is Chris Chaffin, who previously was deputy general counsel at BMC Software and an associate at Vinson & Elkins. It’s not clear whether the Duke University and University of Texas law graduate is sticking around or headed elsewhere.
Paradigm has been through several owners through the years, including Fox Paine & Co., which invested in it in 2002. Ten years later, Fox Paine exited the company by selling it to private equity giant Apax for what was said to be $1 billion. The company was expected to fetch $1.5 billion in its most recent sale.
T&K, Baker Botts advise on Chaparral’s $170M asset sale to Perdure
Perdure Petroleum, a new oil and gas company, has popped up on the scene, and on Oct. 13 it made a big splash: It was revealed in a Securities and Exchange Commission filing that it bought hydrocarbon interests and associated assets that use enhanced oil recovery methods in Oklahoma and Texas from Chaparral Energy for $170 million.
Thompson & Knight advised Chaparral with a team led by Houston partner Robert Dougherty. Other team members included Dallas and Fort Worth partner Wes Williams, Dallas partner Jessica Hammons, Houston partner Hunter White, Dallas associate Sam Fubara, Houston tax partner Roger Aksamit and Austin environmental partner Ashley Phillips.
Baker Botts represented the buyer with a Houston team led by partner Jeremy Kennedy that included associates Ryan Staine and Alia Heintz and partner Jon Lobb and associate Katie McEvilly on tax matters. Partner Matt Larsen assisted on state tax matters from Dallas.
Kennedy, a Texas Tech law graduate who was elevated to partner at Baker Botts in 2013, has worked on a lot of asset sales for oil and gas companies, including an unnamed privately held partnership on its sale of properties in North Dakota and Montana to Oasis Petroleum in 2013 for $1.45 billion and Carrizo Oil & Gas on its $250 million acquisition of properties in South Texas’ Eagle Ford Shale in 2014.
More recently, Kennedy was part of the team representing the Carlyle Group on its $1.6 billion joint venture with Hilcorp Energy Co. — owned by billionaire Houston oilman Jeffery Hildebrand — and their acquisition of oil and gas properties in the San Juan Basin in New Mexico and Colorado from ConocoPhillips for $2.6 billion. He’s also advised EQT and Jones Energy on transactions.
Comstock expands joint venture with NextEra’s USG
Comstock Resources Inc. said Oct. 11 it expanded its joint development venture with NextEra Energy unit USG Properties Haynesville to include drilling in the Bossier formation on the company’s acreage in Sabine Parish, Louisiana.
Neither side’s outside counsel was yet been revealed and Comstock’s usual counsel, Locke Lord, said it wasn’t involved.
Comstock’s general counsel is Dale Gillette, who has been in that seat since 2006. Before joining the company, the 71-year-old practiced law in the energy sector for 34 years, most recently as a partner with Gardere Wynne Sewell and before that with Locke Lord predecessor Locke Liddell & Sapp.
The University of Texas law graduate also worked for Dallas oilman T. Boone Pickens as corporate counsel in the legal department of Mesa Petroleum Co. He also served in the legal department of Enserch Corp., now called TXU, which was acquired by Texas Utilities in 1996 for $1.7 billion.
Latham tax lawyer in Texas provides assist on Amnel-Impax merger
At least one Texas lawyer worked on a big pharmaceutical deal this week.
Amneal Pharmaceuticals LLC and Impax Laboratories, Inc. said Oct. 17 they agreed to merge in an all-stock transaction, creating the fifth largest generics business in the U.S. with an expected valuation of $6.4 billion.
Latham & Watkins advised Amneal with a team of lawyers mostly out of New York and California. But Jared Grimley, an associate in Houston, pitched in on tax matters along with partners in the firm’s Chicago and Washington, D.C., offices. Sullivan & Cromwell assisted Impax.
Baker McKenzie helps EnCap on Gravity Midstream sale to Pin Oak
The Texas offices of Baker McKenzie were involved in some M&A work this past week, advising San Antonio private equity firm EnCap Flatrock Midstream on the sale of Gravity Midstream Corpus Christi to Pin Oak Corpus Christi for an undisclosed sum.
The team was led by lawyers out of its New York office, but included partner Emily Harbison in Houston and associates Tanner Bodine and Jonathan Farrokhnia in Dallas. The other side’s legal representation has not been announced.
Gravity Midstream CEO Craig Peus, who is staying on, said the investment will help it operate and develop an independent logistics hub in Corpus Christi.
The owners of affiliate Pin Oak Terminals, Pelican Advisors-backed Dauphine Midstream and Swiss commodities trading giant Mercuria Energy Group, provided equity financing for the transaction, which closed Oct. 18.
HollyFrontier rolls up IDR’s at HEP with help from Bracewell, V&E, Akin
Dallas refiner HollyFrontier announced it was rolling up the incentive distribution rights structure at its master limited partnership unit Holly Energy Partners. The move is expected to enhance HEP’s ability to pursue growth opportunities, lower its cost of capital and increase transparency on the value of HollyFrontier’s stake in it.
As a part of the deal, HollyFrontier will end up with 59 percent of the first refiner-sponsored MLP versus a previous 36 percent. It agreed to waive $30 million in limited partnership distributions over three years.
Lawyers, including some in Texas, were all over this one, handling the vast number of entities and issues involved.
Morgan, Lewis & Bockius advised HollyFrontier with lawyers out of its Philadelphia office and Potter Anderson & Corroon assisted its audit committee out of Delaware.
HEP was assisted by two Texas-based law firms: Bracewell (partner Will Anderson and associates Benjamin Martin and Andrew Monk in Houston with assistance from its New York and Washington offices) and Vinson & Elkins on tax (partners Jim Meyer in Dallas and Ryan Carney in Houston and associate Brian Russell in Dallas).
Akin Gump Strauss Hauer & Feld partner John Goodgame in Houston advised the conflicts committee of the board of HEP’s general partner, HEP GP, along with Delaware firm Morris, Nichols, Arsht & Tunnell LLP.
Sysco buys Hawaiian food distributor HFM for undisclosed sum
Houston food distribution giant Sysco Corp. expanded into Hawaii with its announcement Oct. 17 that it was acquiring HFM FoodService. While terms weren’t disclosed, Sysco did say that HFM has $290 million in annual sales, making it one of the largest foodservice distributors in Hawaii and the only one with operations on all four major Hawaiian Islands, as well as Guam.
Neither Sysco spokespersons nor Sysco legal chief Russell Libby responded to requests for the company’s counsel on the deal. But the 10-year company veteran started his legal career at Atlanta-based Arnall Golden Gregory, which has advised the company on some of its acquisitions in the past. Libby was also general counsel at computer distribution and manufacturing company Cofra North America and American Retail Group.
Baker Botts assists Pelican with investment in Gordon Technologies
Houston private equity firm Pelican Energy Partners said Oct. 17 it made a “significant” investment in Gordon Technologies, a Scott, La.-based provider of measurement-while-drilling technology for the oil and gas industry, to help it keep up with increasing customer demand.
Baker Botts partner Efren Acosta in Houston worked the deal on Pelican’s side while Babineaux, Poché, Anthony & Slavich out of Lafayette, La., assisted Gordon.
Acosta joined Baker Botts in February when eight other Norton Rose Fulbright attorneys came onboard. Coincidentally, their move was announced the same day as Norton Rose Fulbright announced its merger with Chadbourne & Parke (Acosta was joined by partners David Peterman, Robert Phillpott, Edward Rhyne, Ned Crady, Daniel Mark, Natasha Khan, Ron Scharnberg and Dan Tristan).
While financial terms on Pelican’s Gordon deal weren’t disclosed, Pelican founder and managing partner Mike Scott told The Texas Lawbook that the firm usually makes equity investments of between $10 million and $30 million.
Pelican has raised $330 million in capital since its founding in 2012 and is investing out of its second fund. This past summer it sold portfolio company Multilift to publicly traded oilfield services provider Forum Energy Technologies for what some analysts thought was around $50 million.
BoyarMiller advises VLS Recovery on sale to Aurora Capital
Houston law firm BoyarMiller had its hand in the M&A game this past week, advising VLS Recovery on its purchase by Los Angeles private equity firm Aurora Capital Partners for an undisclosed sum.
The team included founding shareholder Gary Miller and associates Cyrus Chin and Corinne Sullins.
Miller previously advised VLS in 2011 when its management led a buyout of the company from its sponsor, HSBC Capital (USA) Inc., with help from Prudential Capital Partners. He was assisted by partner Steve Kesten and then-associates Taylor Hayden (who is now an entrepreneur in Charlotte) and Forrest Gordon (who formed his own law firm last year with onetime Fears Nachawati attorney Ben Lusky of Dallas after working in-house at Trican Well Services).
Attorneys at Gibson Dunn & Crutcher out of California and New York counseled Aurora. Jim Rebello at Duff & Phelps in Houston provided financial advise to VLS.
Hockley, Texas-based VLS provides specialty cleaning services for rail ,cars and large industrial containers and processing solutions for non-hazardous waste. Besides Texas, it has facilities in Georgia, Tennessee and South Carolina.
Gardere, T&K counsel on Tailwater’s commitment to Copperbeck
Dallas energy infrastructure investor Copperbeck Energy Partners announced Oct. 17 that it received an undisclosed equity commitment from Tailwater Capital with outside legal advice from the Dallas offices of Gardere Wynne Sewell and Thompson & Knight.
Gardere Wynne Sewell counseled Copperbeck with a team led by Robert Sarfatis, while T&K represented Tailwater, led by J. Holt Foster III.
Sarfatis has done deals involving Dallas-based Tailwater before. Three years ago, he represented Tailwater portfolio company Southcross Energy Partners on its acquisition of gas pipelines near Corpus Christi from Onyx Midstream and Onyx Pipeline Co. for $40 million. He also advised Enerven Compression on its sale of assets to First Reserve-backed Crestwood Marcellus Midstream in 2012 for $92 million and Enerven’s all-out sale to J-W Power Energy in 2013 for an undisclosed sum.
This year, Sarfatis has worked on some non-energy matters, including representing Dallas-based Frog Street Press on its acquisition by Excelligence Learning Corp. in April for an undisclosed sum. He is also representing an AT&T Stadium suite holder in a legal dispute with Cowboys Stadium LP — which is controlled by billionaire team owner Jerry Jones — over its obstructed view at non-football events (Sarfatis is working on that case with partner Rachel Kingrey).
Foster has also counseled Tailwater, including its $150 million commitment to Valiant Midstream LLC in August. And earlier this month, he advised Tailwater portfolio company Producers Midstream on its formation of Culberson Midstream with Charger Shale Oil to install a new natural gas gathering system and processing capacity in West Texas’ Delaware Basin.
Copperbeck recently closed the purchase of 62.5 percent of sulfuric acid distributor Sacronix from Martin Resource Management, which is keeping 37.5 percent (Copperbeck CEO Wes Martin is Martin Resource’s former development chief). Tailwater, which is led by former HM Capital partner and Goldman investment banker Edward Herring, has $2.1 billion in committed capital, $700 million of which is available for new investments.
Kirkland, V&E work on Vine Oil’s $530M private offering
Kirkland & Ellis LLP said that its Houston office represented Blackstone-backed Vine Oil & Gas of Plano, Texas, on its private offering of $530 million in senior unsecured notes that priced on Oct. 16. Vine — which is hoping to go public — intends to use the net proceeds to refinance its existing debt.
The Kirkland team was led by capital markets partners Matt Pacey, Justin Hoffman and Michael Rigdon and associates Ryan Guerrero, Christopher Fox and Justin Bosworth; debt finance partner Andy Veit and associate Chad Nichols; and corporate partner Bill Benitez and associate Kyle Watson.
Vinson & Elkins partners Alan Beck and Thomas Zentner and counsel Dan Spelkin in Houston advised Morgan Stanley.
AKK advises underwriters on Energy Transfer Equity’s $1B notes offering
Andrews Kurth said it advised the underwriters on Energy Transfer Equity’s $1 billion offering of 4.25% senior notes that closed Oct. 18.
The team in Houston included partners Mike O’Leary, Jordan Hirsch, Robert McNamara and Rob Taylor and associates Jerry Chandapillai, Brooke Milbauer, John Stribling, Warren Knull and Jocelyn Tau. The underwriters were led by Morgan Stanley and Mizuho Securities USA.
Latham & Watkins assisted ETE, including Houston partners Debbie Yee and Bill Finnegan and associate Chad MacDonald. Yee and Finnegan worked on ETE’s purchase of Southern Union in 2011 for $7.9 billion. Other Houston team members included associates Jayne Wabeke, Dan Harrist and Madeleine Neet; tax partner Tim Fenn and associate Bryant Lee; and environmental partner Joel Mack.