Conditions are looking up in Texas deal-making land now that spring break is over in most places and folks are getting back to work.
There were 15 deals announced in the last week worth $13.4 billion versus only 9 transactions the previous week valued at $4 billion. The big deal boosting the week’s value total was Concho Resources’ $9.5 billion purchase of RSP Permian, the biggest M&A transaction ever in West Texas’ and New Mexico’s prolific Permian Basin.
But other deals came into the market as well. There were acquisitions of an ailing energy infrastructure contractor and a well-known Latino-focused supermarket chain, pipeline and power plant deals, simplification transactions among master limited partnerships, a midstream private equity commitment and a scattering of notes and preferred stock offerings. And while a healthcare-related initial public offering successfully launched, another of a popular product at tailgating parties got pulled. Below are the week’s deals.
Gibson Dunn, V&E work on $9.5B Concho-RSP hookup
As the Texas Lawbook reported last week, Midland-based Concho Resources agreed to buy rival oil and gas producer RSP Permian for $9.5 billion in stock and debt.
Concho General Counsel Travis Counts turned to Gibson, Dunn & Crutcher and Sullivan & Cromwell as its legal advisers. Counts is the former deputy general counsel at Halcon Resources and associate general counsel at Petrohawk Energy. Before joining Petrohawk, the Tulane-trained lawyer practiced at the Hinkle Elkouri Law Firm.
The Gibson Dunn team was led by oil and gas partner Michael P. Darden and corporate partner Hillary Holmes with assistance from corporate associates Lindsay Ellis and Harrison Tucker and oil and gas associates Matt Savage, David Cias and Graham Valenta. All are in Houston.
Also working on the team were partners James Chenoweth (tax, Houston), Tull Florey (corporate, Houston), Shalla Prichard (finance, Houston), Doug Rayburn (corporate, Dallas) and Justin Stolte (oil and gas, Houston). They had help on benefits, environmental and intellectual property issues from lawyers in the firm’s Washington, D.C., Century City and New York offices.
RSP Permian General Counsel James Mutrie tapped his former law firm Vinson & Elkins to help with the transaction. Before joining RSP Permian, the Northwestern-educated lawyer was general counsel at United Surgical Partners International for seven years.
The V&E group was led by partners Doug McWilliams, Steve Gill and Lande Spottswood with assistance from associates Leonard Wood, Jing Tong, Mariam Boxwala, David Bumgardner, Maggie Webber, Andrianna Frinzi, Michael Pascual and Ryan Rivera, all of Houston.
Others on the deal included partner David D’Allessandro, senior associate Dario Mendoza and associate Steven Oyler of Dallas on executive compensation/benefits; partner David Peck and associate Megan James of Dallas on tax; partner John Grand of Dallas on oil and gas; and counsel Larry Pechacek of Houston on environmental matters.
Morgan Stanley was Concho’s financial adviser and Tudor, Pickering, Holt assisted RSP.
The deal, which Concho claims creates the largest unconventional shale producer in the Permian, has to clear shareholders from both companies but is expected to close in the third quarter.
While another bidder could emerge with a higher offer, analysts think the deal will go through as planned, increasing the scale and scope of Concho’s already impressive Permian position and providing more than $2 billion in synergies.
Baker Botts, Bracewell counsel on $1.67B Tallgrass merger
In the latest of the midstream energy’s “simplification” transactions, Tallgrass Energy GP said last week it would acquire Tallgrass Energy Partners in a stock swap that represented a 10 percent premium for the latter’s investors.
According to a Securities and Exchange Commission filing, the proposed maximum aggregate offering price of the Tallgrass Energy GP Class A shares involved in the deal amounts to more than $1.67 billion.
Baker Botts represented Tallgrass Energy GP. The team included Mollie Duckworth (partner, Austin); Joshua Davidson (partner, Houston); Courtney Fore (senior associate, Austin); Rachel Ratcliffe (associate, Austin); Allison Lancaster (associate, Austin) and Ty’Meka Reeves-Sobers (associate, Austin).
Other members were tax partners Michael Bresson (Houston) and Jon Nelsen (Austin); finance partner Daniel Tristan and associate David Nimmons in Houston; and employee benefits partner Mark Bodron in Houston.
The firm had help from attorneys in its Washington, D.C. and New York offices.
Bracewell assisted the conflicts committee of the board of Tallgrass Energy Partners’ general partner.
The attorneys included Houston partners Troy Harder, Gary Orloff, Tony Visage and Bruce Jocz, Houston senior counsel Allison K. Perry and Houston associates Lytch Gutmann, Andrew Monk and Kathy Medford. They had assistance from attorneys in their New York office.
Barclays is Tallgrass Energy GP’s financial adviser while Evercore is assisting the conflicts committee of Tallgrass Energy Partners’ board.
Tallgrass Energy GP is acquiring 47.6 million Tallgrass Energy Partners common units at 2-to-1 ratio, or about 95.2 million shares. As a result of the transaction, Tallgrass Energy Partners’ incentive distribution rights will be canceled and its units will no longer be publicly traded.
The deal has to clear a majority of Tallgrass Energy Partners’ unitholders and Hart-Scott-Rodino and is expected to close in the second quarter.
Analysts at Tudor, Pickering, Holt said the transaction synced with their expectations of a limited partnership consolidation as the previous valuation gap between the two entities made a buyout of the general partner “untenable.”
Latham assists CNX Midstream on $400M notes offering
Latham & Watkins said last week it advised Pittsburgh-based CNX Midstream Partners and CNS Midstream Finance on a private offering of $400 million in senior notes with Houston partner David Miller as the lead.
CNX Midstream Partners intends to use the net proceeds to fund its previously announced acquisition of 95 percent of the Shirley-Pennsboro gathering system in West Virginia from CNX Resources for $265 million. It also plans to tap the money to repay existing indebtedness under its revolving credit facility and for general partnership purposes.
The notes will be subject to a special mandatory redemption at 100 percent of the issue price if the Shirley-Pennsboro transaction isn’t completed on or before June 1.
Latham aids underwriters on CSI Compressco’s $350M notes offering
Latham also said last week it represented the underwriters on CSI Compressco’s $350 million private offering of senior secured first lien notes.
Partner David Miller led that matter as well along with partner Michael Chambers in Houston.
Bass Wallace is general counsel of CSI Compressco as well as affiliate Tetra Technologies in Houston. Before joining Tetra in 1994, the UT law grad previously spent 12 years at Vinson & Elkins.
The Woodlands-based CSI Compressco expects to use the $344.25 million in net proceeds to repay all of its outstanding borrowings under its revolving credit facility, which it will terminate, and for general partnership purposes, including the expansion of its compression fleet.
Sidley advises Bodega Latina on $300M Fiesta Mart purchase
Bodega Latina, the U.S. unit of Mexico’s Grupo Comercial Chedraui that does business as “El Super,” announced last week it planned to buy Houston-based Fiesta Mart.
Terms weren’t disclosed but reports put the purchase price at $300 million, including debt. Fiesta is backed by Acon Investments, which bought the chain in 2015 from Houston’s Levit family for an undisclosed sum. The supermarket was previously owned by Donald Bonham and O.C. Mendenhall, who co-founded it in 1972.
The Houston office of Sidley Austin advised Paramount, California-based Bodega Latina led by partners Mark Metts and Katy Lukaszewski in Houston.
Others on the team were Shawheen Molavi and William Coleman in Houston (on M&A); Zack Pullin in Houston (on tax); Kelly Dybala in Dallas (the finance lead); and Julia Chester in Dallas (on intellectual property). They had help on finance, real estate, insurance, antitrust, employee benefits, employment, immigration and environmental matters from attorneys in the firm’s Los Angeles, Chicago and Washington, D.C. offices.
Hogan Lovells assisted Fiesta with a team out of Virginia and Washington, D.C.
RBC Capital Markets was Bodega Latina’s financial adviser while Food Partners was Fiesta’s financial adviser.
Fiesta, an international food retailer with an emphasis on the Hispanic segment, operates 63 stores primarily in Dallas and Houston.
The combination marks Bodega Latina’s entry into the Lone Star State and creates one of the largest Hispanic-focused supermarket companies in the U.S. It now has 122 stores across California, Arizona, Nevada, New Mexico and Texas and sales of $3 billion.
The transaction is expected to close at the beginning of the second quarter. Fiesta stores will continue to be operated under their own banner.
K&S, V&E, Sidley advise on $300M Superior Pipeline deal
King & Spalding represented a joint venture made up of OPTrust and Partners Group on its acquisition of a 50 percent stake in Tulsa, Oklahoma-based Superior Pipeline from Unit Corp. for $300 million.
Partners Roxanne Almaraz and Stuart Zisman, senior associate Casey Ragan and associate Nathan Zhang in the Houston office advised on core corporate and transactional matters with assistance from partner Pete Hays and associates Mitch Moore, Kareem Ratani and Evan Korngold, also of Houston. King & Spalding counsel on tax, benefits, labor and employment, regulatory, finance and insurance included attorneys in New York, Atlanta and Washington, D.C. with Houston partner Andrew Stakelum advising on litigation.
Sidley Austin represented Partners Group with a team that was led by project finance and infrastructure partner Glenn Pinkerton and included energy partner Cliff Vrielink, M&A associate Alex Tanton and tax counsel Zack Pullin.
Vinson & Elkins advised Tulsa-based Unit with a corporate team that was led by partner Doug Bland with senior associate Luke Edney and associates Danny Hatch, Joclynn Townsend and Ed Vaunder. Also advising were partner John Lynch (on tax); partner Stephen Jacobson and associate Amy Benford (executive compensation/benefits); partner Tom Wilson (labor/employment); partner Billy Vigdor and associate Evan Miller (antitrust); and partner Larry Nettles (environmental).
Tudor, Pickering, Holt was Unit’s financial adviser.
The deal, announced March 29, was with SP Investor Holdings, which is owned by OPTrust and Partners Group. Closing is expected by April 3. Unit is keeping operating control of Superior Pipeline.
Unit said selling half of Superior Pipeline to a partner will help it expand the system while bringing in capital for other projects. It plans to use the proceeds to accelerate its drilling program, make additional capital investments in Superior and reduce corporate debt, among other things.
Superior buys, sells, gathers, processes and treats natural gas for Unit and third parties in Oklahoma, Texas, Kansas, Pennsylvania and West Virginia. It operates three natural gas treatment plants, 13 processing plants, 22 active gathering systems and 1,455 miles of pipeline. Its processing capacity is 340 million cubic feet per day.
T&K advises EnCap Flatrock on $250M commitment to Getka
Tulsa, Oklahoma, crude oil logistics provider Getka Energy said March 27 it attracted a $250 million equity commitment from EnCap Flatrock Midstream and Getka’s management team.
Getka Energy was advised by the LINDSEYfirm in Tulsa. EnCap Flatrock tapped its usual counsel, Thompson & Knight partner Sarah McLean in Austin.
Getka was formed earlier this year to provide storage, blending and terminal solutions and pipeline transportation and market optionality for producers across North America in addition to domestic and international marketers.
Getka expects to focus its early efforts on several basins and market hubs throughout the Midcontinent, including the market center at Cushing, Oklahoma.
Getka’s founders include CEO Dariusz Cichocki, chief commercial officer Clete Straub and COO Matthew Turner, who worked together at Enbridge Energy Partners developing storage and pipeline systems.
EnCap Flatrock Managing Partner David J. Kurtz joined Getka’s board.
Bracewell advises Rockland on $241M power plant purchase
Bracewell said March 29 it aided Houston-based Rockland Capital on its purchase of six power plants from AES Ohio Generation, a unit of DPL, for $241 million. The transaction was announced Dec. 19 and closed on March 27.
The team included Houston partners Ryan Holcomb and Bruce Jocz. Other members came from the firm’s New York and Washington, D.C. offices.
The facilities are in Ohio and Indiana and have a combined capacity of 972.5 megawatts.
Bracewell represents NRG on $210M Xoom acquisition
Bracewell also said March 29 it represented NRG Energy unit NRG Retail on its agreement to acquire Xoom Energy Global Holdings for $210 million.
The team included Houston partners Jessica Adkins, Bruce Jocz, Rebecca Baker and Jeff Andrews and associate Melanie Goebel. Attorneys from the firm’s New York, Washington, D.C. and Seattle offices also pitched in.
Xoom provides competitive retail electricity, natural gas and renewable energy supply options to residential and commercial customers in 100 utility markets in the U.S. and Canada.
Weil advises Primoris on $100M Willbros purchase
Weil Gotshal Manges said last week it advised Dallas-based Primoris Services on its purchase of struggling Willbros Group of Houston for $100 million in cash and debt assumption.
The Weil team in Dallas included lead partner James Griffin, counsel Ryan Gorsche and associates Michael Andrews and Camille Walker; tax partner Jonathan Macke; and business finance and restructuring partner Stephen Youngman and associates Candice Carson and Jeri Miller. Attorneys from the firm’s Silicon Valley, New York and Washington, D.C. offices also helped.
Conner & Winters was Willbros’ outside legal adviser with attorneys out of Tulsa (counsel Robert Curry was the company’s outside chief counsel in 2009 and 2010). The Austin-based firm of Streusand, Landon & Ozburn also provided Willbros with counsel, including partners Sabrina Streusand, Christopher Ozburn and Stephen Lemmon.
Greenhill was its financial adviser and Houlihan Lokey was Primoris’ financial adviser.
The deal, announced March 28, involves paying Willbros shareholders 60 cents per share in cash. Primoris also is settling all of Willbros’ debt obligations. It’s also providing up to $20 million in secured bridge financing to support its working capital liquidity needs before the deal closes, which is expected sometime this quarter if Willbros stockholders approve it.
Primoris plans to pay for the deal with cash on hand and through its credit facilities.
Willbros is an energy infrastructure contractor for the oil, gas and power industries in the U.S. and Canada. But it’s seen better days: On March 20 it said it was in advanced talks with potential buyers for all or part of the company as it was at risk of being out of compliance with its term credit agreement and its credit facility.
In January the company sold some of its mainline pipeline assets to Meridien Energy affiliate WB Pipeline for an undisclosed sum and closed its sale of its tank services business to the ATS Group.
In the first year after closing, the combined companies are expected to have $660 million in sales, including $470 million in the utility transmission and distribution segment, and $25 million in Ebitda, including $7 million in annual cost savings. Those cost savings are expected to grow to $7.5 million to $10 million 24 to 30 months after closing. The deal also will add $400 million to Primoris’ backlog.
Latham aids Landmark on $47.7M preferred unit offering
Latham & Watkins said it represented Landmark Infrastructure Partners on a public offering of Series C preferred units.
The matter was led by partner John Greer with associates Kevin Richardson, Eric Schoppe, Bo Rose and Andrew Tengler-West, all of Houston.
The offering involves 2 million Series C floating-to-fixed rate cumulative perpetual redeemable convertible preferred units representing limited partner interests in the partnership at a public offering price of $25 per unit. The underwriters have a 30-day option to purchase 300,000 more units.
The partnership expects to receive net proceeds of $47.5 million, or $54.7 million if the underwriters exercise their option in full. It intends to use the net proceeds to repay debt.
Raymond James & Associates and UBS Securities are book-running managers for the offering and B. Riley FBR and Janney Montgomery Scott are joint lead managers.
AKK advises underwriters on CAI’s $40M preferred stock offering
Andrews Kurth Kenyon said March 29 it advised the underwriters on a $40 million preferred stock offering by CAI International.
The team included Phil Haines, Rich Kronthal, Tom Ford, Robert McNamara, Jocelyn Tau, Lisa Shelton, Mike Hoffman, Amanda Thienpont and Audra Herrera.
The lead underwriters were B. Riley FBR, Janney Montgomery Scott, Oppenheimer and William Blair & Co.
The offering involves 8.50 percent Series A fixed-to-floating rate cumulative redeemable perpetual preferred stock.
Streusand Landon & Ozburn aids Genprex on $6.4M IPO
Genprex raised $6.4 million this past week in an initial public offering with help from Christopher Ozburn at Streusand Ldon & Ozburn in Austin.
The company, an Austin developer of immunogene therapy for non-small cell lung cancer, priced the 1.28 million share offering at $5 per share. It trades on the Nasdaq under the ticker symbol GNPX.
Network 1 Financial Securities Inc. was the sole bookrunner and used Magri Law in Ft. Lauderdale for counsel.
Inception Capital Management was one of Genprex’s pre-IPO backers.
Genprex’s general counsel is Elizabeth Han, who joined in 2016 from Norton Rose Fulbright, where she focused on health care compliance and regulatory matters and advised medical device manufacturers, pharmaceutical companies and hospitals.
Before Norton Rose, the University of Michigan-trained lawyer was a judicial intern for Judge Lee Yeakel at the U.S. District Court for the Western District of Texas.
Baker Botts, Kirkland aid on Legacy transformation
Another simplification transaction happened among master limited partnerships this past week, with Midland-based Legacy Reserves LP announcing it would transition into Legacy Reserves Inc.
The move includes Legacy Reserves Inc.’s purchase of Legacy Reserves GP, the general partner of Legacy Reserves LP, for $3 million in cash.
Baker Botts represented general partner member Moriah Properties. The team included partners Travis Wofford and Josh Davidson and associate Bill Pritchett, all of Houston. They were joined by Houston tax partner Mike Bresson and associate Zak Morozov and Houston litigation partners Danny David and Amy Hefley.
Kirkland & Ellis assisted Legacy Reserves LP, including partners Matt Pacey, Michael Fisherman and Doug Bacon, also in Houston. Richards, Layton & Finger in Delaware assisted Legacy Reserves LP’s conflicts committee, which received financial advice from Evercore.
Dan LeRoy has been general counsel of Legacy Reserves’ general partner since 2012. Before that, the Notre Dame law school graduate was a shareholder and president of the board of Cotton, Bledsoe, Tighe & Dawson, a Midland law firm.
Each unit representing a limited partner interest in Legacy Reserves LP will be exchanged for a share of Legacy Reserves Inc. Each 8% Series A fixed-to-floating rate cumulative redeemable perpetual preferred unit will be converted into the right to receive 1.9620 shares of common stock with each Series B fixed-to-floating rate cumulative redeemable perpetual preferred unit being converted into 1.72236 shares.
Any rights to accumulated and unpaid distributions will be discharged and the preferred units will be cancelled, Legacy said. The transaction needs to clear Legacy Reserves LP unitholders before it can close.
Chairman and CEO Paul T. Horne said in a statement March 26 that the move will give Legacy a less complicated balance sheet and an enhanced opportunity to raise capital and expand the business.
“We have established a platform for the creation of significant value for the company and we look forward to stepping out from the dark cloud we have been under as an upstream MLP,” he said.
Weil aids Government Brands on nCourt purchase from Mainsail
Weil said March 26 it advised Government Brands Holdings on its acquisition of nCourt from Mainsail Partners for an undisclosed sum. The buyer is backed by Providence Strategic Growth Capital Partners and Greater Sum Ventures.
Partner David Gail in Dallas led the deal along with an attorney in the firm’s Boston office. Harris Williams advised nCourt.
Atlanta-based nCourt connects government entities and the public through an integrated SaaS engagement and payments platform that helps facilitate secure, efficient and easy interactions.
YETI withdraws $100M IPO
YETI Holdings, the Austin-based maker of branded coolers and other outdoor and recreational products, said in a regulatory filing March 23 that it had withdrawn its $100 million initial public offering due to market conditions.
Owned by private equity firm the Cortec Group, the company originally filed to go public in 2016.
YETI general counsel Bryan Barksdale had hired Jones Day attorneys in Cleveland to take it public while the underwriters were using Latham & Watkins in New York.