© 2018 The Texas Lawbook.
By Claire Poole
(Feb. 27) – Deal activity involving Texas attorneys kept steady this past week, with 13 firms and 69 lawyers advising on 20 transactions worth $6.6 billion.
Transaction count and value was up from the prior week, when there were 15 transactions worth $5.5 billion. However, there was one less firm and two-thirds fewer attorneys working the deals, which ranged from M&A and capital markets transactions to a private equity fundraising to venture financings, including one in artificial intelligence.
The highlights included a $2.8 billion media transaction that closed involving the work of a lawyer in Dallas and two firms counseling on a $600 million debt offering that will buy some time for a struggling oilfield services company. Texas attorneys also helped paper the divestitures of a steakhouse and a fitness chain and shed two entire companies that provide the oil and gas industry with services and equipment.
Jones Day advises Koch on financing of Meredith’s $2.8B purchase of Time Inc.
Media and marketing giant Meredith Corp. completed its $2.8 billion purchase of Time Inc. at the end of last month and one Texas lawyer got a piece of the deal.
Jones Day said Feb. 21 that partner Alain Dermarkar in Dallas was part of the team that advised Koch Equity Development, a Koch Industries unit that committed $650 million in preferred equity financing to help fund the deal. He had help from lawyers in the firm’s Chicago and Washington, D.C. offices.
Dermarkar has counseled Wichita, Kan.-based Koch before, including Koch Ag & Energy Solutions on its sale of a 1,054 megawatt power plant in Odessa to a unit of Vistra Energy for $350 million as well as Koch Equity Development on its $2 billion investment in enterprise software provider Infor. Both transactions closed last year.
Meredith said the combination makes it a Top 10 digital media company with 170 million monthly unique visitors in the U.S., 10 billion annual video views and $700 million in digital advertising revenues per year.
ASB Real Estate sells Infomart Dallas for $800M
ASB Real Estate Investments said Feb. 14 that it agreed to sell data center and office complex Infomart Dallas to California-based Equinix for $800 million.
The deal includes cash and debt securities that will be paid out over a three-year period after closing, which is expected in the second quarter.
A DLA Piper partner in Miami led the team providing outside legal advice to ASB, which received financial advice from DH Capital.
Davis Polk & Wardwell represented Equinix, which used Citi and J.P. Morgan for financial advice.
ASB purchased Infomart Dallas in 2005, expanding its capacity to 110 carriers with tenants including Equinix, Bank of America and Verizon. CEO Robert Bellinger said in a statement that the sale was an opportunity to realize gains for the firm’s investors while rebalancing its real estate portfolio in line with allocation targets.
Latham, Kirkland assist on Weatherford’s $600M notes offering
Latham & Watkins said Feb. 23 it counseled Houston-based Weatherford on a $600 million private offering of senior notes and a cash tender offer for its outstanding senior notes due next year. Both matters were led by partners John Greer and Ryan Maierson in Houston.
Kirkland & Ellis assisted the underwriters, who were led by Deutsche Bank. The team included partners Julian Seiguer and Justin Hoffman and associates Robbie Hopkins, Bryan Flannery and Caleb Lowery, all of Houston.
Weatherford’s general counsel is Christina Ibrahim, who joined the company in 2015 after working for seven years in various roles at Halliburton, most recently as chief commercial counsel for its global operations. Before that, the Texas Southern University-trained lawyer was general counsel at WellDynamics for more than three years.
Analysts say the debt-financing plan will take some of the pressure off of the highly leveraged oilfield services company, the fourth biggest in an industry dominated by Schlumberger and Halliburton.
“Although this transaction will not change Weatherford’s heavy debt load, it will alleviate near-term refinancing pressures,” Moody’s Investors Service said in a note.
Fogo de Chão taps non-Texas outside lawyers for $560M buyout by Rhône
Dallas-based Brazilian steakhouse chain Fogo de Chão agreed to be bought out by private equity giant Rhône Capital on Feb. 20 for $560 million in cash, but tapped out-of-state outside counsel to advise it.
Davis Polk and Weil, Gotshal & Manges were legal counsel to Fogo and its board, while Jefferies provided financial advice. Sullivan & Cromwell assisted Rhône, which tapped JP Morgan for financial advice and Credit Suisse and Wells Fargo for financing.
Fogo de Chão General Counsel Albert “Gerry” McGrath told The Texas Lawbook that Davis Polk also worked on its 2015 initial public offering along with Baker & McKenzie on various ancillary matters.
McGrath has been the top legal officer at the company since 2014 after practicing at Baker & McKenzie in Dallas for 14 years. Before that, the SMU law grad was general counsel at CS Wireless for three years and Emerson Radio for four years.
PEHub estimates that 60 percent owner Thomas H. Lee Partners doubled its money on the sale in five years.
The sale came after a strategic alternatives review process. The company’s stockholders will receive $15.75 per share, a 25.5 percent premium over the stock’s closing price before the deal was announced. The parties expect the transaction to close in the second quarter.
Gibson Dunn, Bracewell counsel on Concho’s $280M in asset sales
Concho Resources said as part of its fourth quarter earnings results Feb. 20 that it sold oil and gas properties for $280 million in proceeds.
Concho didn’t respond to requests for more information, but The Texas Lawbook has been able to piece together some of the details through various sources.
According to a filing with the U.S. Securities and Exchange Commission, the properties were in Reeves and Ward counties in Texas’ southern Delaware Basin. Tudor, Pickering, Holt and Jefferies were said to be shopping the assets. A source says attorneys in Gibson Dunn’s Houston office provided Concho with outside legal advice, not Vinson & Elkins partner Bryan Loocke as was previously thought (Loocke had advised Concho on previous deals).
NGP-backed Luxe Energy bought one package while Colgate Energy — whose sponsors include NGP and Pearl Energy – bought the other. Sources say that Bracewell advised both buyers, with partner Carl von Merz counseling Luxe (he did so while at Morgan Lewis as well) and partner J.J. McAnelly and associate Molly Butkus representing Colgate.
Von Merz and McAnelly confirmed with The Lawbook that they counseled the buyers on the acquisitions from Concho. Loocke said he’s not in a position to comment.
Midland-based Concho also announced a property swap in the Midland Basin and New Mexico Shelf. It didn’t name the party but reportedly it was Chevron.
Concho’s general counsel is Travis Counts, who joined the company in 2013. Before that, he was deputy general counsel of Halcón Resources and an associate general counsel of corporate at Petrohawk Energy. Before Petrohawk, the Tulane-trained lawyer practiced at Hinkle Elkouri (now just Hinkle) in Kansas.
Locke Lord aids Tucker on $275M purchase by STEP Energy
Locke Lord said Feb. 23 that it advised family-owned Tucker Energy Services on its purchase by Canada’s STEP Energy Services Ltd. for $275 million.
Partner Joe Perillo in Houston led the deal team, which included partners Steve Boyd, Jerry Higdon, Paul Pruett, Buddy Sanders, Ed Razim and Michael Rose of Houston and partner Van Jolas of Dallas. They were assisted by senior counsel Michelle Gutierrez-Begin and associates Elizabeth Corey, Jeannie Diep, Sarah Lozano, Emily Self, Sarah Roark and Brooks Vanlandingham.
The financial advisers on the deal were CIBC Capital Markets for STEP and Piper Jaffray’s Simmons & Co. for Tucker.
Tucker, which has offices in Houston and Tulsa, provides fracturing and completion solutions primarily in the SCOOP/STACK and Woodford plays in Oklahoma.
STEP said Feb. 22 that it had been looking to expand into the U.S. fracturing and completions market. It will fund the deal with cash on hand, proceeds from an offering and through new credit facilities.
Baker Botts advises Pelican on $233M fund
Pelican Energy Partners said Feb. 22 it raised $233 million for its third fund, Pelican Energy Partners III, which was raised in only three months and “substantially” oversubscribed.
Baker Botts advised Pelican with a team that included corporate partner Ed Rhyne and associates Katie Belleville and Ian Jelsma; tax partner Bobby Phillpott and associate Katie McElvy; and ERISA partner Rob Fowler, all of Houston.
Champlain Advisors was the fund’s placement agent.
The fund was bigger than its last, which closed in July 2016 with $210 million in commitments.
Mike Scott is founder and managing partner of Houston-based Pelican, which focuses solely on energy service and equipment company investments.
V&E advises Paragon on $232.5M sale to Borr Drilling
V&E said Feb. 22 it advised onetime bankrupt Paragon Offshore on its sale to Norway’s Borr Drilling for $42.28 per share in cash, or $232.5 million.
The V&E corporate team was led by partner Mike Telle with partner Jim Prince, counsel Jay Blackman and associates Nettie Downs and Mariam Boxwala.
Also advising were partner David D’Alessandro, senior associate Missy Spohn and associate Steven Oyler (executive compensation/benefits); partner Darin Schultz and senior associate James Longhofer (finance); partner Lina Dimachkieh (tax); partner Tom Wilson and senior associate Christie Alcala (labor/employment); and partner Jim Loftis and counsel Sarah Mitchell (litigation).
Lawyers from V&E’s Washington, D.C. office were also involved. Deutsche Bank was Paragon’s financial adviser.
Borr’s U.S. counsel was Seward & Kissel out of New York and its Norwegian counsel was Ro Sommernes, which is known as Rosom.
Borr, which is controlled by Norwegian investor Tor Olav Troeim, has been buying up rigs around the world from such companies as Hercules Offshore, Transocean and Sembcorp Marine unit PPL Shipyard.
Borr is expected to scrap 21 older rigs out of the 32 it’s picking up from Paragon due to the high costs of reactivating them in a challenging market. However, it expects day rates to start rising next year as oil companies boost capital spending.
Borr said the transaction will make it the world’s largest premium jack-up rig operator, with 24 built after 2000.
Houston-based Paragon was spun off by Noble Corp. in 2014 and emerged from Chapter 11 bankruptcy last year. It has $180 million in cash and $215 million in liabilities linked to debt and working capital, and as of Jan. 31, it had a revenue backlog of $204 million.
Borr, which is led by onetime executives at Noble and Seadrill, expects to close the deal in March if it clears Paragon shareholders and a Delaware bankruptcy court regarding certain rigs. It will finance it with cash on hand and proceeds from equity and/or debt issues.
Bracewell represents Riverstone-backed Three Rivers III on $200M asset sale
Riverstone Energy announced Feb. 17 it sold all of Three Rivers Operating III’s properties in the Permian Basin for $200 million in proceeds.
It didn’t name the buyer, but sources say it was Pine Brook Partners-backed Admiral Permian Resources, which affiliate Riverstone Holdings also backs. Pine Brook wouldn’t comment.
Bracewell advised Three Rivers III, including partner J.J. McAnelly and associate Molly Butkus.
A closed-ended investment fund that trades on the London Stock Exchange, Riverstone Energy formed Three Rivers III in 2015 to pursue acquisition, exploitation and development opportunities in the Permian after partnerships with the two previous incarnations under the same management team.
Riverstone Energy said the sale represents a gross multiple of invested capital of 2.2 times on its $94 million investment and a gross internal rate of return of 49 percent. Its $111 million in gross profit will be subject to taxes and a performance fee at the sale’s closing, which is expected by April.
Riverstone Energy has 14 active investments spanning conventional and unconventional oil and gas activities in the continental U.S., Western Canada, the Gulf of Mexico and Mexico.
Weil advises Koshidaka on $172M Curves acquisition
Weil, Gotshal & Manges said Feb. 21 it advised Japan’s Koshidaka Holdings on the U.S. aspects of its purchase of private equity-backed Curves International for $172 million.
Weil’s deal team was led by Dallas partner Jim Griffin, who has worked on some big deals in his career. They include Dow Chemical on its $130 billion merger with DuPont; Applied Materials on its $29 billion combination with Tokyo Electron and its $4.9 billion acquisition of Varian Semiconductor Equipment; and Oracle on its $9.3 billion acquisition of NetSuite and its $5.3 billion purchase of Micros Systems.
Waco-based Curves was previously owned by Connecticut-based North Castle Partners, which bought it in 2012 with $70 million in financing.
Sidley Austin advises American Midstream on $138.5M asset sale
Sidley Austin said Feb. 20 it represented Houston-based American Midstream Partners on the sale of two refined products terminals to DKGP Energy Terminals – a joint venture between Delek Logistics Partners and Green Plains Partners – for $138.5 million.
Houston partner Cliff Vrielink – who knows his way around a midstream deal – led the Sidley team, which included associates Tommer Yoked, Jameson Miller and Jeff Kinney. Barclays was American Midstream’s financial adviser.
Delek used Norton Rose Fulbright out of New York, while Green Plains tapped Husch Blackwell in Omaha.
American Midstream’s general counsel is Christopher Dial, who was just brought on last month after previously working as general counsel at Susser Holding II. Before that, he was associate general counsel at Susser Holdings and Sunoco. The University of Houston-educated lawyer began his career as an associate at Andrews Kurth.
American Midstream’s previous general counsel was Regina Gregory, who returned as general counsel at Energy Spectrum Capital-backed Frontier Energy Services in Tulsa last fall.
The terminals are in North Little Rock, Arkansas, and Caddo Mills, Texas. American Midstream said the sale simplifies its business while creating capital flexibility. It plans to plow the proceeds into Southcross, which it acquired last fall for $815 million, and other strategic growth opportunities.
American Midstream said it expects to sell more terminal assets, including its marine and specialty chemical storage facilities, as well as other potential non-core assets as it redeploys capital into higher growth assets. Sidley could be seeing more work as a result.
AKK advises Just Energy on $100M debentures offering
Andrews Kurth Kenyon said Feb. 22 it represented Canada’s Just Energy Group on its sale of $100 million in convertible unsecured subordinated debentures. The team included partner Phil Haines and associate Amanda Thienpont in Houston.
The deal closed Feb. 22. The underwriters included CIBC World Markets, National Bank Financial and BMO Nesbitt Burns, among others.
Jones Day advises Andeavor on $75M Delek terminals acquisition
Jones Day announced Feb. 20 that it advised Andeavor on its purchase of West Coast asphalt terminals from Delek US Holdings for $75 million plus working capital.
Partner Stephen Olson and associate William Mason in Houston led the deal team. Jay Greathouse, a senior associate at Norton Rose Fulbright in San Antonio, was lead counsel for Delek.
Andeavor’s general counsel is Kim Rucker, who joined the company in 2016. Before that, the Harvard-educated attorney was general counsel at Kraft Foods and Avon Products, chief governance officer at Energy Future Holdings (formerly TXU), corporate counsel at Kimberly-Clark and in private practice at Sidley in Chicago.
The assets, formerly part of Alon Asphalt, include terminals in Elk Grove, Bakersfield and Mojave, California, and Phoenix, Arizona, and a 50 percent stake in the Paramount Nevada Asphalt terminal in Fernley, Nevada.
San Antonio-based Andeavor said it plans to expand these additions to its asphalt business so it can serve more customers and boost the product offering. It hopes to increase sales by 20 percent over the next three years.
The acquisition will bring Andeavor’s asphalt capacity to 430,000 tons across 10 terminals. It has to clear regulators, but is expected to close in the first half of this year.
SparkCognition uses non-Texas lawyers for $56.5M funding
Austin artificial intelligence developer SparkCognition said Feb. 20 it raised $56.5 million in Series B funding from Verizon Ventures, Boeing, CME Ventures, Brevan Howard Investment Holdings and Invenergy Future Fund.
Other investors included two Cisco veterans, former chairman and CEO John Chambers and former chief development officer Pankaj Patel. An unnamed American global financial services company and one of the largest asset management firms in the world also participated in the round.
Greenberg Traurig provided outside legal advice to the company with lawyers outside of Texas, SparkCognition’s general counsel Conny K. Ruthven told The Lawbook.
Ruthven has been at the company for five months, having previously been a partner at Michael Best & Friedrich in Austin for a year. Before that, she was general counsel of ADRevolution, which was purchased by Tactara in 2012 for an undisclosed sum.
Her other work history includes roles as counsel at Wilson & Warner, founding director and CFO of Innovate Texas Foundation, assistant general counsel of investments and securities at Employees Retirement System of Texas and founding director and treasurer of the Travis County Women Lawyers Foundation.
The University of Houston law graduate started her legal career as an associate at Gunderson Dettmer after working as an M&A tax consultant at Arthur Andersen.
Founded and led by CEO Amir Husain, SparkCognition provides advanced machine learning technology to customers in energy, oil and gas, manufacturing, finance, aerospace, defense and security. It’s raised $73.5 million since inception. It plans to use the new funding to expand its 250-member workforce, accelerate product development, expand its geographic reach and break into new industries.
Austin is becoming a hub for artificial intelligence start-ups that are attracting venture funding. Tethr and CognitiveScale both received $15 million in investments last year.
Locke Lord advises ION Geophysical on $47.5M public offering
Locke Lord said Feb. 23 that it advised ION Geophysical on a $47.5 million public offering.
The team was led by Houston partners Eric Johnson and Mike Blankenship. Additional team members included Houston associates Ben Smolij and Matt McKenna and an attorney in its Boston office.
Blankenship said ION and Oppenheimer were able to successfully execute an equity offering of stock and warrants despite a volatile market. “There was sufficient demand,” he said.
Proskauer Rose counseled the underwriters with lawyers out of its New York office.
Matt Powers is ION Geophysical’s general counsel. He joined the company in 2013 as senior counsel and was promoted to deputy general counsel in 2016 and general counsel last year. Before ION, the University of Chicago-educated lawyer practiced at the Houston offices of Sidley Austin and Mayer Brown, where he worked in the transactional and litigation groups.
The offering, which was completed on Feb. 21, included 1.82 million shares of ION’s common stock along with warrants to purchase an additional 1.82 million shares. The proceeds will be used to pay off debt and for general corporate purposes.
Egan Nelson counsels Complai on $1.4M seed funding
Complai, an Austin-based developer of business travel tracker Shep, announced Feb. 22 that it had closed a $1.4 million seed funding round led by Moonshots Capital with participation from the Capital Factory, an Austin accelerator and fund.
Angel investors also participated, including former Sabre CEO Kathy Misunas, former Travelocity Business president Ellen Keszler, SoFi co-founder Jim Finnigan and ex-CMO of HomeAway and Visa Europe Mariano Dima.
Egan Nelson advised Complai, including partner José Ancer in Austin and an attorney in the firm’s New York office.
Complai plans to use the financing to bring the company’s flagship product to market, support customer onboarding and expand the team and product. Moonshots co-founder and general partner Craig Cummings will join Complai CEO Daniel Senyard on the company’s board.
Sysco buys Louisiana food distributor Doerle for undisclosed sum
Houston food distributor Sysco said Feb. 19 that it acquired Doerle Food Services for an undisclosed sum.
The company received outside legal advice from Atlanta’s Arnall Golden Gregory, where Sysco legal chief Russell Libby started his career in law. The 10-year company veteran also was general counsel at computer distribution and manufacturing company Cofra North America and American Retail Group. He has his law degree from Emory University School of Law.
Based in Broussard, Louisiana, Doerle Food Services generates $250 million in annual sales distributing food in Oklahoma, Texas, Arkansas, Louisiana, Mississippi and Alabama. Sysco expects to retain the executive management team. Doerle Energy & Marine wasn’t part of the transaction.
Orrick advises ArcLight’s Amphora on Avangrid acquisition
Orrick partner Blake Winburne in Houston confirmed last week that he advised ArcLight-backed Amphora Gas Storage USA on its acquisition of Enstor Gas from Avangrid for an undisclosed sum. He was joined by partner Brad Gathright, who is also based in Houston.
Latham & Watkins represented Orange, Conn.-based Avangrid with lead lawyers out of its New York and Washington, D.C. offices.
Enstor Gas operates Avangrid’s gas storage business, which operates facilities in the Gulf Coast and southwest regions of the U.S. The deal was announced Feb. 16 and is expected to close in March.
The transaction doesn’t include Avangrid’s Enstor gas trading business, which it has agreed to sell to a unit of Castleton Commodities in January for undisclosed terms.
AKK aids Brentwood on purchase of Credentials Solutions
Andrews Kurth Kenyon said Feb. 20 that it counseled private equity firm Brentwood Associates on its purchase of Credentials Solutions for an undisclosed sum.
The deal closed Jan. 1 and was announced Feb. 6.
The AKK team included Austin partners Ted Gilman and Russ Denton, Dallas partner Will Becker (who recently moved to Locke Lord) and Houston partner Tony Eppert.
Also on the team were counsel William Dillard and associates Casandra Cuellar, Jae Kim, Tucker Groendyke and Matt Daley, all of Austin, as well as associates Stephanie McDermott in Dallas, Emily Cabrera in The Woodlands and Jayde Ashford Brown in Dallas.
Northfield, Illinois-based Credentials Solutions provides tech-enabled services to the higher education market. Los Angeles-based Brentwood has invested in 50 portfolio companies with a total transaction value of $6 billion.
Quanta closes Northwest Lineman purchase
Houston-based Quanta Services said Feb. 22 it completed its acquisition of Northwest Lineman College for an undisclosed sum.
A Quanta spokeswoman said it’s the company’s policy not to disclose its outside legal partners.
Quanta’s general counsel is Donald Wayne, who joined the company last year after serving in the same capacity at Archrock Partners. Former Norton Rose Fulbright partner Stephanie Hildebrandt stepped in as his replacement when he joined Quanta.
Northwest Lineman College is an educational and training institution based in Boise, Idaho, that serves the electric power industry. Quanta said the purchase will enhance its ability to meet the training and recruiting demands of its employees.
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