© 2018 The Texas Lawbook.
By Claire Poole
(March 6) – Deal activity dipped a bit this past week, with 13 firms and 116 Texas lawyers advising on 19 transactions worth $5.4 billion versus the previous week’s 20 transactions worth $6.6 billion.
Capital markets activity accounted for the three biggest deals of the week, with Bracewell working on two of them for the issuers. The week also saw a slew of asset sales, including a large power plant, some storage facilities and a pipeline; a secondary stock offering in the oilfield services industry; and another “simplification” transaction in the midstream energy sector.
It wasn’t all energy. There also were two high-tech fundings, an automotive glass merger, a hospital joint venture dismantling and an investment in a movie/brewhouse chain – something for everyone as February closed out and March began.
AKK, Bracewell advise on Kinder Morgan’s $2B notes offering
Andrews Kurth Kenyon and Bracewell snared work on a big securities offering this past week: Kinder Morgan’s $2 billion notes offering.
AKK advised the underwriters, with a team made up of partners Mike O’Leary, Brooks Antweil, Rob Taylor, Tom Ford and Allison Mantor and associates Taylor Landry, Warren Knull, Brooke Milbauer and Leslie Slaughter, all of Houston.
Bracewell assisted Kinder Morgan, including partners Troy L. Harder, Gary W. Orloff and Michele J. Alexander and associates Kathy Witty Medford, Kate Barrington McGregor, Tyler C. Lohse, Ryan Davis and Jay Larry.
Kinder Morgan attorneys involved in the offering included Adam S. Forman (deputy general counsel), R. Eric McCord (assistant general counsel) and Angela S. Teer (assistant general counsel). Its general counsel is 16-year company veteran David DeVeau.
Mizuho Securities, MUFG Securities Americas and SMBC Nikko Securities America were the lead underwriters.
The offering consisted of $1.25 billion in 4.30 percent senior notes due 2028 and $750 million in 5.20 percent senior notes due 2048. Kinder Morgan issued the notes under its shelf registration statement filed in October 2015.
The company expects to use the net proceeds to repay its commercial paper and borrowings under its revolving credit facility and for general corporate purposes.
Bracewell represents Phillips 66 on $1.5B senior notes offering
Bracewell snared work on another big securities offering this past week, advising oil and gas refiner Phillips 66 on a $1.5 billion senior notes issue that will help fund a stock buyback.
The team included partner Will Anderson and associate Tyler Lohse in Houston and counsel Ian Brown and associate Josh McNulty in Dallas. They had help from two lawyers in the firm’s New York office.
Phillips 66’s general counsel is Paula Johnson, who joined the company in 2012 after 10 years at ConocoPhillips, where she served as Conoco’s deputy general counsel. She has her law degree from the University of Oklahoma.
Cravath, Swaine & Moore in New York advised the underwriters, which included Deutsche Bank, Citigroup, Goldman Sachs, Mizuho Securities and Scotia Capital
The offering included $500 million in floating rate senior notes due 2021, $800 million in 3.90 percent senior notes due 2028 and $200 million in 4.875 percent senior notes due 2044.
Phillips 66 announced the buyback in February. It includes 35 million shares of Phillips 66 stock from billionaire Warren Buffett’s Berkshire Hathaway.
The conglomerate was looking to sell down its stake to less than 10 percent to avoid regulatory requirements associated with owning more.
Baker Botts aids underwriters on Enbridge’s $850M notes offering
Baker Botts is advising underwriters Credit Suisse and Citigroup on an $850 million notes offering by Canadian pipeline company Enbridge, according to a Securities and Exchange Commission filing from Feb. 28.
The law firm said it couldn’t provide any information on the transaction, including the individual lawyers who worked on it.
Sullivan & Cromwell in New York counseled Enbridge.
The offering involves fixed-to-floating rate subordinated notes. The proceeds will be used to partially fund capital projects, cut debt and for other general corporate purposes.
Kirkland advises GenOn on $520M power plant sale to Platinum
Kirkland & Ellis said Feb. 28 it counseled NRG Energy unit GenOn Energy on its pending sale of its Hunterstown power generation facility in Pennsylvania to Platinum Equity in a transaction valued at $520 million.
The team included corporate partners Kim Hicks, Shubi Arora and Andrew Calder and associates Jeannie Poland, Stella Tang, Juan Pablo Lopez and Gordon Cranner. Latham & Watkins advised the buyer with lawyers out the firm’s New York office.
The power plant sale has to clear regulators but is expected to close in the second quarter.
GenOn filed for bankruptcy last year. It plans to separate from NRG when it completes the Chapter 11 process.
Located in Gettysburg, the Hunterstown facility is a combined-cycle, gas turbine power plant that can generate 810 megawatts, enough to supply 648,000 homes.
Los Angeles-based Platinum said the plant features elements that it looks for in an investment, including entry price, downside protection and operational excellence that can create value. Platinum partner Louis Samson said the firm is looking for add-on opportunities for the Hunterstown asset as well as more platform investments in the power generation market.
AOS Energy Partners provided consulting services to Platinum on the acquisition and will co-invest in the plant. Morgan Stanley is providing financing for the deal.
Founded in 1995 by Tom Gores, Platinum has $13 billion in assets and 30 portfolio companies under management and has completed 200 acquisitions. It’s currently investing from its fourth fund, which amounts to $6.5 billion.
KBR taps out-of-state lawyers on $355M SGT purchase
Houston government services provider KBR said Feb. 23 it agreed to pay $355 million for Stinger Ghaffarian Technologies, or SGT, which delivers technology solutions and services to the U.S. government for space programs, national security and civilian operations.
KBR general counsel Eileen Akerson went with out-of-state lawyers for the acquisition with a Hogan Lovells team in McLean, Virginia. SGT owner Kamco Holdings of Naples, Florida, tapped Pillsbury Winthrop Shaw Pittman, also out of McLean.
Akerson became KBR’s top legal officer in 2014 after working as senior vice president of commercial and vice president of legal and chief counsel managing the legal functions for the hydrocarbons business group. Before joining KBR in 1999, the Catholic University-trained lawyer was an attorney at Spriggs & Hollingsworth in Washington, D.C.
KBR said SGT further expands its high-tech professional services across NASA and other government entities, including supporting human space flight, the International Space Station and military and commercial space. It previously acquired Wyle and HTSI.
If cleared by regulators, the deal is expected to add to earnings per share in the first year after closing. SGT has a $3.4 billion backlog.
Baker Botts represents Bristow on $350M notes offering
Baker Botts said Feb. 26 it represented the Bristow Group on a $350 million private offering of senior secured notes.
The team included corporate partners John Geddes and A.J. Ericksen, senior associate Carina Antweil and associates Lakshmi Ramanathan, Ruchira Podali and Emmie Proctor, all of Houston.
Assisting were partners Lyman Paden and Rachael Lichman of Houston; associate Sarah Christian in Austin and associate Josh Espinosa in Dallas (on finance); partner Jon Lobb and associate David Morris in Houston (tax); and partner Scott Janoe and associate Harrison Reback in Houston (environmental).
Bristow’s general counsel is Timothy Knapp, who joined the company last year. The University of Denver-trained lawyer was previously general counsel at SourceGas, and before that, a partner at Knapp & Rome.
V&E was counsel for the initial purchasers, including partners David Stone and Thomas Zentner in Houston.
Bristow announced Feb. 23 that it priced the offering, which consists of 8.75 percent senior secured notes that mature in 2023. It plans to use the proceeds to repay all of its term loan debt, cash collateralize letters of credit outstanding under its revolving credit facility and for general corporate purposes.
Once the offering closes, Bristow intends to terminate its term loan and revolver.
Baker Botts, Orrick aid on Delek US’ $315M asset sale to Delek Logistics
Baker Botts said Feb. 27 it assisted Delek US Holdings on its sale of storage terminals that support its Big Spring refinery to affiliate Delek Logistics Partners for $315 million.
The team included corporate partner A.J. Ericksen and associates Leslie Daniel, Bill Pritchett and Mitch Athey, all of Houston; partners Mike Bresson in Houston and Matthew Larsen in Dallas, senior associate Jared Meier in Houston and associate Jacob Walley in Houston (on tax); and energy projects partner Dan Mark. Partner Scott Janoe in Houston advised on environmental matters.
Orrick, Herrington & Sutcliffe counseled the conflicts committee of Delek Logistics’ general partner. That team included partner David Ronn and associates Mason Harry and Ryan Giggs; partner Barbara de Marigny; and associate Luisa Muskus, all of Houston. The firm had assistance from lawyers in its Washington, D.C. office.
Duff & Phelps provided financial advice to the committee and J.P. Morgan assisted Delek US.
The dropdown, which was announced Feb. 26, is expected to be financed with cash on hand and borrowings on its revolver and close in March.
Jones Day advises Andeavor on $180M pipeline purchase from Plains
Jones Day said Feb. 27 it advised Andeavor Logistics on its acquisition of the Wamsutter Pipeline System from Plains All American Pipeline for $180 million.
Partner Jeff Schlegel in Houston led the deal team. Plains used in-house counsel Lev D. Rabinowitz, who is senior group counsel at the company. Its general counsel is Richard McGee, who previously was president of Duke Energy International.
San Antonio-based Andeavor announced the purchase Feb. 19. It expects to close it in the first half of this year if it clears regulators, financing it with borrowings under its revolver.
Wamsutter is a 575-mile pipeline transporting crude oil from Wyoming to Salt Lake City refineries. Andeavor expects the assets to provide annual net earnings of $8 million to $12 million and EBITDA of $20 million to $24 million, including synergies, which represents a purchase price multiple of about 8 to 9 times EBITDA.
Latham represents underwriters on $153.8M Oil States secondary
Latham & Watkins said March 2 it represented underwriter JP Morgan on a $153.8 million secondary stock offering for Houston oilfield services provider Oil States International.
Partner Ryan Maierson in Houston led the deal team. Vinson & Elkins represented Oil States (partner Mike Telle) while Baker Botts aided Lime Rock (partner A.J. Ericksen).
Oil States general counsel Jeff Steen joined the company in 2008 after working as assistant general counsel at Camco International, general counsel for Schlumberger North America and vice president of legal at Grant Prideco. He received his law degree from South Texas College of Law.
The offering, which Oil States announced Feb. 22, involved the sale of 5.9 million shares of its common stock by shareholder HCperf Holdings, formerly known as GEODynamics, which Oil States acquired from Lime Rock Partners in January for $525 million in cash and stock.
Strasburger aids Oil States on $85M acquisition of Argonaut’s Falcon Flowback
Oil States International also made an acquisition this past week, announcing Feb. 28 it acquired Argonaut Private Equity-backed Falcon Flowback Services for $85 million.
Strasburger & Price partners Garney Griggs and Debra Gatison in Houston and associate Weldon Woodall in Dallas made up Oil States’ external legal team. Counsel and assistant corporate secretary Ellen Pennington led the deal in-house. Frederic Dorwart in Tulsa advised the seller.
Falcon provides flowback and well testing services for the separation and recovery of fluids, solid debris and proppant used during hydraulic fracturing operations.
Argonaut, which was founded by Tulsa billionaire George Kaiser, claims to have $3 billion of capital deployed in direct investments. Its third fund raised $600 million in 2016. Last year it sold Summit ESP to Halliburton for an undisclosed sum.
Oil States, which is led by CEO Cindy Taylor, said Falcon will provide additional scale and diversity to its completion services well testing operations in key shale plays in the U.S. with its seven service locations and 400 employees. It’s funding the deal through its revolver.
HayBoo, T&K represent Tetra on $57.5M in divestitures
The Woodlands-based Tetra Technologies said March 1 it agreed to sell its offshore decommissioning services businesses and its Maritech operations to Orinoco Natural Resources and Epic Offshore Specialty for $57.5 million.
Haynes and Boone partner Bill McDonald, who recently lateraled from AKK, and partners Stacy Brown and Barry Davis at Thompson Knight were Tetra’s outside counsel. Slattery Marino & Roberts in New Orleans represented the buyers.
Tetra general counsel Bass Wallace led the in-house team, which included senior counsel Kelton Tonn and Alicia Boston. Wallace has been the company’s general counsel since 1994 after working for 12 years at V&E. He received his law degree from the University of Texas School of Law.
As part of the transactions, Orinoco agreed to assume responsibility for completing Maritech’s $47 million in remaining asset retirement obligations. Tetra also is keep the working capital of the businesses being sold and will receive $3 million in cash for inventory and fuel and a $7.5 million promissory note payable on Dec. 31 of next year.
Tetra CEO Stuart M. Brightman said in a statement that going forward the company will focus on offshore and onshore fluids; on water management and frac flowback services in the shale plays; and on field compression.
The company expects the divestitures to reduce the volatility of its earnings and eliminate the uncertainty of Maritech’s asset retirement obligations.
V&E aids Alliance Holdings on its $23.5M combo with Alliance Resource
V&E said Feb. 26 it advised Tulsa-based Alliance Holdings GP on its agreement to merge with Alliance Resource Partners in a share swap.
The corporate team was led by partners Dave Oelman and Shamus Crosby, counsel Dan Spelkin and senior associate Justin Hunter. Advising on tax issues were partner Ryan Carney and associate Christine Mainguy.
Oelman said there were no other counsel or bankers, as the deal was a reorganization of entities under common control.
The deal, part of a wave of “simplification” transactions among midstream master limited partnerships, was announced Feb. 23.
Based on Alliance Resource’s last quarterly distribution of 51 cents per unit, it would issue 1.32 million units that were recently worth about $23.5 million. Closing is expected in the second or third quarter.
Egan Nelson aids Meritize on $6.8M funding from Colchis, others
Frisco educational lending services provider Meritize said Feb. 21 it closed a $6.8 million seed funding round from Colchis Capital, Chicago Ventures and Cube Financial Holdings.
Other investors included ECMC, College Loan Corp., University Ventures, City Light Capital, PC Squared and Meritize management.
Egan Nelson partner Brian Alford in Austin advised Meritize. Alford also advised Austin oil and gas software developer MineralSoft on its Series A funding round last year led by Cottonwood Venture Partners.
Meritize was co-founded by Chris Keaveney and Phillip Stegner, who have worked in credit and lending industries leading units in consumer credit, home lending, risk and data at companies, including MeasureOne, SoFi, Capital One and JPMorgan Chase.
Launched in January of last year, Meritize uses a student’s academic achievements to assess the probability of student completion and loan repayment performance. It claims the technology unlocks a demographic of students previously underserved by traditional lending vehicles, including those with thin credit or who lack a cosigner. Student loans now represent the second-largest category of consumer debt in the U.S.
The company said the funding will help it expand the business and its team and support sales and marketing as it continues to build its platform.
ZenBusiness raises $4.5M in seed funding
Austin-based ZenBusiness said Feb. 26 it officially launched with a $4.5 million round of venture capital funding led by Lerer Hippeau.
Other investors included technology venture capital firms Greycroft, Slow Ventures, Revolution’s Rise of the Rest Seed Fund and Founders Fund.
ZenBusiness plans to use the funding for product development and marketing as it expands into new verticals to serve the growing number of Americans creating businesses in the small business and sharing economy.
ZenBusiness’ fractional general counsel is Jennifer Carroll, who focuses her practice on serving technology companies and supporting founders from formation through exit.
The Cleveland State University-trained lawyer previously was corporate counsel at Drillinginfo and executive director of DLA Piper’s NEXT program, which provided legal services at start-up pricing for capital conscious founders.
ZenBusiness helps start-up companies create, maintain and manage a limited liability company or other corporate entity. Its goal is to assist entrepreneurs in starting 1 million small businesses in five years, which it thinks could result in 2.5 million new jobs and $100 billion in income.
The company is led by Ross Buhrdorf, the founding chief technology officer of HomeAway, which was acquired by Expedia in 2015 for $3.9 billion.
Jones Day aids Riverside on its Real Property Management investment
Jones Day said Feb. 27 it advised private equity firm the Riverside Co. on its investment in Real Property Management, the largest property management franchise in North America. Terms weren’t disclosed.
Michael Weinberg, administrative partner of the Dallas office, led the deal team. The sellers’ law firm was Kirton McConkie in Salt Lake City, where the target is based.
Madison Capital, GE Capital, NXT Capital, NewStar Financial, Midcap Financial and Ares Capital provided financing for the transaction.
The target is the 11th add-on to Riverside’s Dwyer Group platform, which represents 20 consumer brands, 18 of which are franchised.
Real Property Management helps residential property owners protect and maximize their investments. It has a national network of more than 300 franchisees, which provides such services as rent collection, maintenance, leasing and legal.
The company primarily serves rentals owned by smaller, non-institutional property owners, such as individual homes, condos and small apartment buildings.
Including Real Property Management, Dwyer has 3,100 franchisees and eight support centers in North America, the U.K. and Germany. It said the new franchise concept opens cross-selling opportunities with Dwyer’s portfolio of services.
Riverside makes control and non-control investments in expanding businesses valued at up to $400 million. Since its founding in 1988, it has invested in 500 transactions and its portfolio includes 80 companies.
Gibson Dunn aids CenterOak on TruRoad formation
Gibson, Dunn & Crutcher said March 1 it represented CenterOak Partners in the formation of TruRoad Holdings through its investment in JN Phillips Auto Glass and combination with Techna Glass.
The firm’s team included Dallas corporate partner Rob Little and associates Louis Matthews, Eric Pacifici and Blair Watler.
The seller is represented by Mintz Levin with attorneys out of the firm’s Boston and Washington, D.C. offices.
The combination creates the second largest automotive glass and claims-management company in the U.S. CenterOak’s investment will provide capital to support expansion.
Senior management of JN Phillips Auto Glass, including Robert Rosenfield, and the Techna Glass management team will roll over their equity ownership into TruRoad. Rosenfield will serve as CEO of the combined entity, which will continue to operate out of Woburn and Burlington, Massachusetts, and Sandy, Utah.
CenterOak Partners invested in TruRoad with capital from its $420 million CenterOak Equity Fund I.
Gibson Dunn represents Tenet on JV interest sale to Baylor Scott
Gibson Dunn also represented Dallas-based Tenet Healthcare on selling its minority interest in a joint venture for three North Texas hospitals to Baylor Scott & White Health for undisclosed terms.
The firm’s deal team includes Dallas corporate partner Rob Little and associate Louis Matthews. Little also worked on the joint venture’s formation in 2015 with Caitlin Calloway, who is now associate general counsel at Hennessy Advisors in Austin.
Tenet’s general counsel is Audrey Andrews, who has been at the company since 1998. Before that, the UT law grad was assistant general counsel at MAPA for three years and an associate at Locke Lord in Dallas.
Baylor Scott & White’s legal counsel for the deal was Hunton & Williams with an attorney out of its Richmond, Virginia, office.
Tenet announced the deal Jan. 4 and closed it Feb. 28.
Formed from the 2013 merger between Baylor Health Care System and Scott & White Healthcare, Baylor Scott & White Health is the largest not-for-profit health care system in Texas with assets of $11.1 billion, 50 hospitals, 7,800 active physicians and 48,000 employees.
Tenet operates general acute care and specialty hospitals, ambulatory surgery centers, urgent care centers and other outpatient facilities in the U.S. and the U.K. It employs 130,000.
Locke Lord represents Twin Point on its investment in Flix
Locke Lord said March 1 that it represented Twin Point Capital on its unspecified equity investment in Flix Entertainment to fund the continued expansion and development of its Flix Brewhouse concept.
The Locke Lord team included partners Scott Arrington, Steve Peterson, Steve Boyd, Jerry Higdon, Eric Larson, Sara Longtain, Ed Razim and Geoff Polma; senior counsel Michelle Gutierrez-Begin; and associates Elizabeth Corey, Matt Frogel, Matt McKenna, Sarah Roark, Emily Self, Jennie Simmons and Brooks Vanlandingham. All are in Houston except for Polma, who is in Dallas.
Round Rock-based Flix was advised by Blue Square Capital Advisers and its legal counsel was Davis Wright Tremaine in Seattle. It announced the investment on Feb. 28.
Founded in 2011, Flix claims to be the world’s only first-run cinema and dine-in microbrewery. The four-unit company plans to open four more this year in Little Elm and El Paso, Texas; Madison, Wisconsin; and Chandler, Arizona. It hopes to accelerate the pace of openings starting in 2019.
Twin Point Capital is an investment firm founded by Lawrence H. Guffey and Jonathan E. Friesel in 2015 with offices in Palo Alto and New York City.
AKK advises PulseTech on purchase of Zamp Solar
AKK said March 1 it represented PulseTech Products on its purchase of SNJ Enterprises, which does business as Zamp Solar, for an undisclosed sum.
The team included associate Chrissy Williford and counsel Tom Popplewell in Dallas along with other attorneys who left the firm after the transaction closed, AKK said. Woodbridge International provided SNJ with financial advice.
The deal was announced Feb. 13 after closing Feb. 2.
Oregon-based Zamp Solar is a designer and maker off-grid solar modules and portable and recreational vehicle solar energy products.
Southlake, Texas-based PulseTech makes 12-volt, lead-acid battery maintenance and testing products, including ruggedized solar panels. The company sells to the U.S. military, first responders and commercial fleet and equipment owners as well as to consumers.
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