© 2018 The Texas Lawbook.
By Claire Poole
(Feb. 6) – A sale of assets off the coast of Israel, a light mix of public offerings and a broad mix of transactions all highlighted the move into February by Texas dealmakers, with 13 firms and 100 attorneys working on 16 transactions last week worth $8.6 billion.
Deal count was up by five transactions versus the previous week’s 11. But the deal value was down by 31.7 percent over last week’s $12.6 billion, even with a large notes issue that closed in October but whose lawyers weren’t revealed until last week.
On the oil and gas front, there were asset sales, more initial public offering filings (with one making it to market), a joint venture formation and a partial unwinding of another one, private equity activity and a notes offering. There were also deals in the steel, banking, technology, culinary arts and nuclear waste industries. The deals are below.
Noble Energy sells Israeli field stake to Tamar for $800M
The biggest deal of the week was Noble Energy’s Jan. 29 sale of a 7.5 percent working interest in the Tamar field off the coast of Israel to Tamar Petroleum for $800 million.
Outside counsel couldn’t be determined by press time, but a source at one law firm that’s done work for Noble said it probably used Israeli counsel. Noble general counsel Arne Johnson didn’t respond to requests to identify outside counsel.
The price included $560 million in cash and 38.5 million shares of Tamar. Noble said it previously sold 3.5 percent of the Tamar field in mid-2016 (to insurance provider and pension manager Harel Group for $425 million), so the combined proceeds amounted to nearly $1.25 billion, including almost $1 billion in cash.
Raymond James analyst John Freeman said the sale came a bit sooner than expected with proceeds slightly lower than Noble’s previous Tamar sell-down.
Noble CEO David Stover said in a statement that the transaction supports the company’s commitment to sell down its Tamar interest in accordance with Israeli regulations and highlights the value of its Levant Basin assets, which have stable long-term cash flows at margins competitive with the best U.S. onshore oil plays.
Closing is expected by the end of the first quarter if Tamar Petroleum can finalize debt financing. Noble plans to use the proceeds to support its investment in the Leviathan development and sell the Tamar Petroleum shares over the next several years.
Publicly traded Tamar Petroleum will own 16.75 percent of the field versus its previous 9.25 percent and Noble will hold 25 percent versus its previous 32.5 percent.
FTS raises $351M in IPO with help from Jones Day
Fort Worth fracking firm FTS International raised $351 million in an initial public offering of 19.5 million shares priced at $18 each, the high end of their expected $15 to $18 range.
As The Texas Lawbook has reported, former Jones Day partner Charles Haag in Dallas had been advising FTS with help from the firm’s Chicago office. Haag recently jumped to Winston & Strawn. Shearman & Sterling in New York is assisting the underwriters, who are led by Credit Suisse and Morgan Stanley.
FTS’ general counsel is Jennifer Keefe, who practiced at Squire Patton Boggs in Dallas for 17 years before joining the company in 2014. She’s an SMU Law graduate.
Backed by Asian investment firm RRJ Capital and Singapore investment company Temasek, FTS has flirted with going public for several years. It filed for the offering in February of last year and submitted amendments in October.
Gibson Dunn, Latham aid on IPSCO’s proposed $500M IPO
Another IPO is hoping to hit the public markets, rewarding Texas lawyers with more billable hours.
Gibson, Dunn & Crutcher said Jan. 29 that it’s representing underwriters led by BofA Merrill Lynch and Morgan Stanley in the IPO of steel pipe maker and supplier IPSCO Tubulars.
The team is led by Houston corporate partner Hillary Holmes, who was assisted by Houston corporate associate Harrison Tucker, Dallas corporate associate Paige Lager and Dallas corporate associate Mark Jackson. Houston partner James Chenoweth is advising on the tax aspects of the deal.
Latham & Watkins partners Ryan Maierson and John Greer in Houston are representing IPSCO.
IPSCO said in an SEC filing Jan. 29 that it hopes to sell 23.2 million shares for $20 to $23 per share, or around $500 million at the mid-point. The offering includes 7.4 million shares by IPSCO and 15.8 million by Russian parent TMK.
The company intends to use the net proceeds to pay down its revolving credit facility and for general corporate purposes.
Bracewell advises on $500M PetroLogistics II JV
Bracewell said Jan. 27 it represented PetroLogistics on its formation of joint venture PetroLogistics II.
The team included partners Richard C. Rice, Charles H. Still Jr. and associate Andrew W. Monk of Houston with assistance from the firm’s New York office.
Houston-based PetroLogistics II is a joint venture between Quantum Energy Partners, Stonecourt Capital and the principals of PetroLogistics, David Lumpkins and Nathan Ticatch. It plans to continue the strategy of acquiring, developing and operating petrochemical manufacturing, processing and logistics assets in North America.
Quantum, Stonecourt and members of PetroLogistics II’s management team have made initial capital commitments of more than $500 million.
V&E, Baker Botts assisting Cactus on planned $375M IPO
Cactus, an oilfield services provider backed by Cadent Energy Partners, said in an SEC filing on Jan. 29 that it hopes to raise $375 million from an IPO by selling 21.4 million shares at between $16 to $19 per share.
The Houston company filed its issue on Jan. 19 with a $100 million placeholder.
As previously reported by The Lawbook, Vinson & Elkins is advising Cactus with attorneys in its New York office (partners Mike Rosenwasser and Adorys Velazquez, who are said to be moving to Baker Botts). Baker Botts partners J. David Kirkland Jr. and A.J. Ericksen in Houston are representing the underwriters, which include Citi, Credit Suisse and Simmons.
Latham, V&E aid on Oil States’ $200M notes offering
Latham & Watkins said Feb. 2 it counseled the underwriters on Oil States International’s $200 million convertible senior notes offering.
Partner Ryan Maierson in Houston led on the issue with help from the firm’s New York and Los Angeles offices. He was assisted by associates Trevor Lavelle, Eric Schoppe, A.J. Million and Drew Tengler-West in Houston.
Vinson & Elkins partners David Stone and Michael Telle in Houston counseled Oil States with help from associates Austin March, Josh Teahen and David Bumgardner.
Lias “Jeff” Steen is general counsel at Oil States, which he joined in 2008 after previously stints at Grant Prideco, Schlumberger and Camco. He’s a graduate of South Texas College of Law in Houston.
Oil States announced the offering Jan. 24, saying it would use the net proceeds to pay down its revolving credit facility. The company drew the funds to pay for the cash portion of its $615 million GEODynamics purchase, which closed Jan. 12.
Willkie Farr advises Platform on $129M in commitments
Houston-based Platform Partners said it closed Platform Partners Capital with $129 million in investment commitments, exceeding its initial $100 million target.
Willkie Farr advised Platform with a team led by partner Bruce Herzog and an attorney in the firm’s New York office. Herzog offices in Houston and New York.
Platform said it will focus on investing in senior/preferred equity and subordinated debt with minority ownership of lower middle-market companies in Texas and the surrounding area. It is structured as a perpetual investment company, which allows the firm to support entrepreneurs to achieve their long-term objectives.
Platform said it recently hired Jeremy Newsom to help lead the development of Platform Capital. He previously spent 17 years at Amegy Bank, where he most recently managed the corporate banking division. Newsom said he will target initial investments between $10 million and $40 million.
Founded in 2006, Platform is led by CEO Fred Brazelton, who previously was a partner at the CapStreet Group, Hicks, Muse, Tate & Furst and Willis, Stein & Partners. It manages $450 million in assets.
V&E, AKK counsel Quintana on hoped-for $125M IPO
In more IPO news, Houston oil and gas services provider Quintana Energy said in an SEC filing Jan. 29 that it plans to raise $125 million by offering 9.2 million shares priced between $12 to $15 apiece.
As previously reported in The Lawbook, Vinson & Elkins partners Sarah Morgan and Gillian Hobson in Houston are counseling Quintana. Andrews Kurth Kenyon partners Michael O’Leary and Taylor Landry are assisting the underwriters, which are led by BofA Merrill Lynch and Simmons.
The Lawbook reported back in September that the AKK team included George Vlahakos, Tom Ford, Tom Popplewell, Will Becker, Lisa Shelton and Jocelyn Tau. Vlahakos lateraled to Sidley Austin in November and Becker moved to Locke Lord this month.
Kirkland, T&K, Bracewell aid on Värde’s $100M Lilis investment
Kirkland & Ellis said Jan. 31 it advised affiliates of Värde Partners on its pending $100 million convertible preferred stock investment into Lilis Energy, a publicly traded explorer and developer operating in West Texas’ and New Mexico’s Permian Basin.
Sale proceeds will fund the cash portion of Lilis’ pending $70 million acquisition of acreage and production from OneEnergy Partners Operating and part of its drilling program this year.
The Kirkland team was led by corporate partners Shubi Arora and Jhett Nelson and associates David Moore, William Mabry and Fernanda Langa; debt finance partner Lucas Spivey and associate Ryan Copeland; capital markets partner Justin Hoffman and associate Christopher Fox; and tax partner Mark Dundon and associate Joe Tobias.
Thompson & Knight and Bracewell counseled San Antonio-based Lilis on the acquisition, which involved $40 million in cash and $30 million in stock. Bracewell also represented Lilis on the preferred stock transaction as well as a new three-year, $50 million first-lien term loan provided by Riverstone Credit Partners.
Leading the effort from Thompson & Knight was associate Kelli Sims in Houston. Her team included Dallas partner Robert Dougherty, Fort Worth and Dallas partner Cole Bredthauer, Austin partner Ashley Phillips, Dallas partner Brandon Bloom and Dallas associate Katie Gerber.
Lawyers from Bracewell on all three matters included partners Charles H. Still Jr., Rebecca Keep and Michele J. Alexander and associates Anna K. Miller, William H. Ebert, Emily A. Banse, Kathy Witty Medford, Tyler C. Lohse and Ryan Davis.
SunTrust Robinson Humphrey was Lilis’ financial adviser.
A Locke Lord team of partner Terry Radney, senior counsel Max Stubbs, partner Eric Johnson and partner Mitch Tiras, all of Houston, represented OneEnergy and its backer Carnelian Energy Capital on the property sale.
Lilis’ general counsel is New York City-based Ariella Fuchs, who previously was an associate at Baker Botts as well as White & Case and Dewey & LeBoeuf.
Fenimore, Hunton aid Guaranty’s $34.3M Westbound purchase
Guaranty Bancshares, the publicly traded holding company for Guaranty Bank & Trust, said Jan. 29 it has expanded into the Houston area by buying Westbound Bank for $34.3 million.
Hunton & Williams advised Westbound with a team in Dallas that included partners Scott Austin, Jeff Blair, Tara Elgie, Robert Flowers, Daryl Robertson and Peter Weinstock; counsel Abigail Lyle and Beth Whitaker, and associates Carl Goss, Caitlin Sawyer and Zayne Tweed. They had help from attorneys in the firm’s Washington, D.C. and Richmond, Va. offices. The Bank Advisory Group was Westbound’s financial advisor.
Fenimore, Kay, Harrison & Ford assisted Guaranty with a team led by managing partner Chet Fenimore in Austin. Sandler O’Neill & Partners provided financial advice.
Guaranty’s general counsel is Randy Kucera, a Yale Law School graduate who joined in the bank in 2012. Before that he worked as a partner in the litigation practice of Akin, Gump, Strauss, Hauer & Feld for more than five years after serving as assistant district attorney in the Dallas County District Attorney’s Office.
Mount Pleasant, Texas-based Guaranty is led by chairman and CEO Ty Abston, who said in a statement that the deal further expands its Texas banking franchise with locations in Houston, Katy, Bellaire and Conroe. As of Dec. 31, Westbound reported assets of $228 million, loans of $160.3 million and deposits of $188.5 million.
Westbound CEO Troy England will become Houston area chairman for Guaranty and lead its Houston expansion.
The purchase price includes 900,000 shares of common stock and $6.4 million in cash. If Westbound’s tangible equity is more than $16.5 million at closing, Westbound can pay a pre-closing cash distribution to its shareholders and option holders equal to any excess.
The deal is expected to close in the second quarter if it clears regulators and Westbound shareholders. The transaction will boost Guaranty’s assets to more than $2.2 billion and give it 32 operating locations in 24 Texas markets. As of Dec. 31, Guaranty had assets of $2 billion, loans of $1.4 billion and deposits of $1.7 billion.
V&E counsels CS Disco on $20M Bessemer financing
Vinson & Elkins said Jan. 30 it counseled legal technology provider CS Disco on a $20 million equity financing led by Bessemer Venture Partners with participation from LiveOak Venture Partners and the Stephens Group.
The V&E team was led by counsel Shaun Mathew and Wes Watts with associate Luke Thomas, all of Austin.
Houston-based Disco said the new round of funding will be used to accelerate research and development, scale out the U.S. go-to-market team and expand into Asia Pacific, Europe and Latin America.
All three firms had already invested in Disco, whose total investment amounts to more than $50 million. Bessemer partner Bob Goodman sits on Disco’s board.
Disco founder and CEO Kiwi Camara said in a statement that the company expanded sales by 2.7 times and by more than 3.3 times in the AmLaw 200 tier of firms last year. It established sales and services operations in all major U.S. markets and launched its enterprise program to sell to corporate legal departments.
Weil counsels Kainos on Bonewerks Culinarte acquisition
Weil, Gotshal & Manges said Jan. 29 it advised private equity firm Kainos Capital on its acquisition of Culinarte Marketing Group, which does business as Bonewerks Culinarte. Terms weren’t disclosed.
The lead partner on the deal was partner Glenn West in Dallas. Bryan Cave advised Culinarte with a partner in its Denver office and associate Rafael Mendez in Dallas.
West has advised Dallas-based Kainos before, including on its acquisitions of JTM Foods and Del Monaco Foods by its portfolio company Kettle Cuisine. He has also worked on the divestitures of portfolio companies Healthcare Solutions, InterHealth Nutraceuticals and Trilliant Food and Nutrition.
Bonewerks Culinarte is a Green Bay, Wisconsin-based maker of premium stock reductions for professional chefs and home cooks.
Jones Day aids J.F. Lehman on Waste Control purchase from Valhi
Jones Day said Jan. 29 it represented New York- and Washington, D.C.-based private equity firm J.F. Lehman on its acquisition of Waste Control Specialists from Valhi. Terms weren’t disclosed.
Partner Alain Dermarkar in Dallas led the team from Jones Day, which previously advised J.F. Lehman on its sale of portfolio company Doss Aviation to L3 Technologies in September.
A lawyer in the Washington, D.C. office of Pillsbury Winthrop Shaw Pittman served as regulatory counsel for J.F. Lehman. Environmental and natural resources partner Amanda Halter in Pillsbury’s Houston office also pitched in (she became partner this year).
Dallas-based Valhi tapped Baker Botts, including partners Neel Lemon and Samantha Crispin, also of Dallas.
Valhi’s general counsel is Andrew Nace, who joined the company in 2013. He previously was general counsel of Kronos Worldwide, Titanium Metals and Software Spectrum. The Valderbilt-trained lawyer started his career as an associate at Locke Lorde.
Evercore was J.F. Lehman’s financial adviser and placement agent for the transaction’s debt financing, which was provided by the Carlyle Group’s Credit Opportunities Fund.
J.F. Lehman said the acquisition is its fourth platform investment in the environmental and technical services sector.
Waste Control owns and operates a waste disposal, storage and treatment facility in Andrews County, Texas. The company claims it’s the only site in the U.S. licensed to process and dispose of Class A, B, and C low-level nuclear waste from government and commercial generators in all 50 states. Its customers include the Department of Energy, the Environmental Protection Agency and utility and healthcare companies.
The company has a strategic partnership with J.F. Lehman portfolio company NorthStar Group Holdings, which provides environmental and technical services for commercial and government end markets to support U.S. electric utilities in safely decommissioning nuclear power generation sites.
Kirkland, Bracewell counsel Vine, GEP on asset swap
Kirkland & Ellis said Jan. 31 it counseled Vine Oil & Gas on its agreement with GEP Haynesville to exchange non-operated working interests in most of Vine and GEP’s joint venture assets in Red River, DeSoto and Sabine parishes in northwest Louisiana.
The Kirkland team was led by corporate partner Bill Benitez and associate Kyle Watson. It also included corporate partner Anthony Speier and associates David Moore, Tim Vaughan and RJ Malenfant and tax partner Chad McCormick and associate Tim Campany.
Bracewell represented GEP, including partners G. Alan Rafte and Austin T. Lee and associates John L. Stavinoha III and Shannon M. Rice, all of Houston.
The parties said the exchange unwinds a material portion of the joint venture and allocates future development to each party. Vine and GEP will continue to share joint ownership in around 50 producing wells that were brought online in 2015 and 2016 that were excluded from the exchange.
Stallion Oilfield mostly goes in-house on AI’s Water deal
Stallion Oilfield Services, a Houston-based portfolio company of the Carlyle Group and the Riverside Co., said Feb. 1 it mostly used in-house counsel on its acquisition of the assets of AI’s Water Service, a Washington, Pa., provider of potable water transportation and services to the oil, gas and mining industries.
General counsel Brian Baird said the company did have assistance from Reed Smith’s Pittsburgh office on local issues, including personal property and real estate acquisitions.
“Since the real estate wasn’t ready yet, we closed the purchase of the personal property assets and signed a short term lease covering the real estate with a purchase option and we hope to close that next week,” he said.
The seller was represented by Taczak Law Office in Washington, Pa.
AKK advises Wal-Mart on $6B in notes in October
Andrews Kurth Keynon said Feb. 1 it advised Wal-Mart Stores on $6 billion in notes offerings that closed Oct. 20.
The team included partners Dudley Murrey in Dallas, Courtney Cochran Butler in Houston, Brooks Antweil in Houston, Tom Popplewell in Dallas and Robert McNamara in Houston. They were aided by Dallas associate Ethan Post, who left the firm Feb. 2.
Wal-Mart offered the bonds to refinance debt as it tries to improve its stores and better compete with Amazon for online sales, according to an analyst at Fitch Ratings.
The offerings included $300 million in floating rate notes due 2019, $1.2 billion of 1.75 percent notes due 2019, $1.25 billion of 1.9 percent Notes due 2020, $1.25 billion of 2.350 percent notes due 2022, $1 billion of 2.65 percent notes due 2024 and $1 billion of 3.625 percent notes due 2047.
The lead underwriters were Barclays, Citigroup, Morgan Stanley, HSBC Securities, J.P. Morgan and Mizuho Securities.
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