Dealmaking Land this week appeared pretty barren in terms of value compared with previous weeks. Part of the reason is that only four of the 11 deals we collected revealed financial terms. So the value amounted to only $1.4 billion, one-tenth the previous week’s sum.
While the M&A, capital markets and private equity activity involved the same amount of lawyers as the previous week (88), 13 law firms got a piece of the action, versus only seven in the previous period. And the number of deals was greater — 11 compared with the prior week’s 8.
The first week of May saw asset sales, an initial public offering and joint ventures in the energy industry along with mergers in the coal and banking sectors. There also were joint ventures announced by companies big and small and the formation of a new private equity fund. The highlights are below.
Haynes & Boone advises Shell on $950M sale of Argentine business
Haynes & Boone said April 30 it advised affiliates of Royal Dutch Shell on the divestiture of its downstream business in Argentina to Raízen for $950 million in cash.
The team was led by partner Ricardo Garcia-Moreno, who splits his time between the firm’s Houston and Mexico City offices. The other partners on the deal were partners Alberto de la Peña and Patricia Mastropierro, who split their time between the firm’s Dallas and Mexico City offices.
Associates included Valisa Berber-Thayer and Janna Mouret in Houston and foreign associate Fernando Villasenor in Dallas.
Raízen, a joint venture set up in 2011 between a Shell affililate and Cosan, is a top biofuels producer and fuels distributor in Brazil with 6,000 Shell branded service stations. As part of the deal, it’s getting a refinery in Buenos Aires and 645 retail stations along with liquefied petroleum gas, marine fuels, aviation fuels, bitumen, chemicals and lubricants businesses and supply and distribution activities in the country.
Shell announced the deal April 24. After the deal closes, businesses acquired by Raízen will continue their relationships with affiliates of Shell through various commercial agreements with an estimated value of $300 million.
Bracewell represents Rockland Capital on $454M Rockland III formation
Bracewell said May 1 it represented Rockland Capital on the formation of Rockland Power Partners III, which attracted $454 million in capital commitments, surpassing its target.
The team included partners in the firm’s New York office as well as partners Bruce R. Jocz and Jason M. Jean in Houston and counsel Ian R. Brown and associate Christie Latimer in Dallas.
Bracewell said it also represented Rockland on two transactions involving the sale of its flywheel energy storage business to Convergent Spindle and RGA Investments for undisclosed sums. Both transactions closed April 27.
That team included partner Ryan S. Holcomb in Houston, counsel R. Joe Hull in Austin and associate Sidney Troy Nuñez in Houston along with attorneys in the firm’s New York and Washington, D.C. offices.
Rockland sold two 20 MW flywheel energy storage projects, the Stephentown project in Stephentown, New York and the Hazle project located in Hazle Township, Pennsylvania, to affiliates of Convergent Energy and Power. The projects will continue to operate and serve the New York Independent System Operator and PJM Interconnection grids.
Rockland also sold 100 percent of the equity interests in Beacon Power, which operates a flywheel energy storage business and owns related certain technology, intellectual property, patents and manufacturing equipment, to RGA Investments.
Bracewell, Fenimore aid on $350M Allegiance-Post Oak Bancshares merger
Bracewell also said May 1 it’s advising Allegiance Bancshares on its purchase of Post Oak Bancshares for $350 million in stock, a merger that will expand the buyer’s assets by 38 percent to $4 billion.
Bracewell lawyers involved in the transaction included partners Will Anderson, Scott C. Sanders, Rebecca L. Baker and Troy L. Harder in Houston and Timothy A. Wilkins in Austin. Assisting them were associates Joshua T. McNulty in Dallas and Kathy Witty Medford and Tyler C. Lohse in Houston. A partner in the firm’s New York office also pitched in.
Fenimore Kay Harrison & Ford is assisting Post Oak, including managing partner Chet Fenimore, senior counsel Pam O’Quinn and attorney William Teten, all of Austin.
Shanna Kuzdzal is general counsel of Allegiance. Before joining last year, the University of Texas-trained lawyer was associate general counsel at Prosperity Bank and an associate at Bracewell.
Post Oak’s general counsel is Charles Carmouche, who joined in 2004 after serving as general counsel at Fiesta Mart for more than 10 years. He also graduated from UT’s law school.
Performance Trust Capital Partners provided financial advise to Post Oak while Raymond James provided a fairness opinion to Allegiance’s board.
The terms include 0.7017 of an Allegiance share for each Post Oak share along with option to purchase another share.
Bracewell said the transaction is the largest merger to be announced in the Texas banking industry so far this year. Once it closes, it would potentially be one of the five largest transactions based on total transaction value in the last five years.
The deal has to clear both banks’ shareholders and regulators and is expected to close in the fourth quarter, although Allegiance warns that there may be delays.
Post Oak Bank has 13 locations, 12 in Houston and one in Beaumont, adding to Allegiance’s 16 banking locations and one loan production office. As of March 31, 2018, Post Oak reported assets of $1.43 billion, loans of $1.15 billion and deposits of $1.24 billion.
Allegiance chairman and CEO George Martinez said in a statement that the combined company, which will be Houston’s largest community bank, will be well-positioned to take advantage of organic and strategic growth opportunities to further enhance shareholder value.
Post Oak chairman, CEO and president Roland Williams will become executive vice chairman of Allegiance.
Post Oak has grown through acquisition over the last few years, buying the $156 million-asset SSB Bancshares in 2015 and the $187 million-asset State Bank of Texas in January, both for undisclosed terms.
Latham, V&E counsel on PermRock Royalty Trust IPO worth $106M
Latham & Watkins and Vinson & Elkins were involved in PermRock Royalty Trust’s initial public offering, which raised $106 million.
Latham & Watkins represented the underwriters, which included Wells Fargo, Goldman Sachs, UBS, Deutsche Bank, Jefferies, Stifel and Oppenheimer.
Latham partner John Greer in Houston and associates Nick Dhesi, A.J. Million and Drew Tengler-West led the deal team. Others on the team were Houston partner Jeffrey Muñoz on oil and gas matters; Houston partner Tim Fenn and associate Jim Cole on tax matters; and Houston partner Joel Mack on environmental matters. Lawyers in the firm’s Washington, D.C. office also helped on environmental and benefits and compensation matters.
Vinson & Elkins advised PermRock. That team was led by partners Dave Oelman and Mike Telle with assistance from associates Anne Peetz, Eryn Roberts and David Lassetter. Also advising were partner Bryan Loocke, senior associate Alan Alexander and associate Erin Mitchell (energy transactions/projects); and partners Jim Meyer and Ryan Carney and associate Glen Ellsworth (tax).
The offering involved 6.25 million units representing about 51.4 percent of the trust at $17 per unit. The trust’s sponsor, Boaz Energy II, was the only selling shareholder and expected to receive $95 million to $110 million in net proceeds to pay off its revolver, among other things.
Fort Worth-based PermRock Royalty Trust was formed by Boaz to receive 80 percent of the net profits from the sale of oil and natural gas production from Boaz properties in West Texas’ Permian Basin. Boaz itself was formed by its management team and NGP Energy Capital Management.
Baker Botts, Latham, Kirkland aid on CNX Midstream transactions
Baker Botts said May 3 it represented the conflicts committee of the board of CNX Midstream Partners’ general partner on strategic transactions with its sponsor CNX Resources and HG Energy II Appalachia involving asset swaps and cash.
Baker Botts’ deal team included partner Joshua Davidson, associate Leslie Daniel and oil and gas senior associate Scott Looper, all of Houston.
Latham & Watkins counseled CNX, including partners Jeff Munoz and Mike King in Houston along with associates Lauren Anderson in Houston and Alice Parker in Dallas, tax partner Tim Fenn in Houston and associate Jim Cole in Houston.
Kirkland & Ellis assisted HG, including partner David Castro and associates Chris Heasley and Barret Schikta, all of Houston.
Evercore provided financial advice to CNX Midstream’s conflicts committee and CIBC Capital Markets did so for CNX Resources.
Bracewell partner Will Anderson and associate Benjamin J. Martin counseled Evercore.
CNX Midstream agreed to relinquish its 5 percent interest in the midstream assets of DevCo II and its 5 percent interest in the Moundsville midstream assets in DevCo III and release from dedication about 280,000 acres.
In exchange, it’s getting a 16,100 acre dedication in southwest and central Pennsylvania, a 40-well minimum well commitment from CNX Resources, a 12-well minimum well commitment from HG Energy II, a 100% interest in the Majorsville-to-Markwest pipeline and $2 million in cash from CNX Resources.
CNX Midstream said the transaction strengthens its asset portfolio and outlook.
Katten advises Alpha Natural on Contura stock merger
Contura Energy said April 30 it was merging with ANR and Alpha Natural Resources Holdings for an undisclosed sum, creating a top U.S. coal company.
Katten Muchin Rosenman is assisting ANR and Alpha Natural led by a partner in its Chicago office. But environmental and workplace safety partners Danny G. Worrell in Austin and Greg Dillard in Houston and associate Katie Bennett Hobson in Austin were part of the team.
Davis Polk & Wardwell is advising Contura out of New York. Contura’s financial adviser is Jefferies and Alpha’s is Moelis.
Alpha shareholders will receive 0.4071 of a Contura common share for each ANR class C-1 share and each Alpha Natural Resources common share they own, which represents 46.5 percent of the merged entity.
The combination is expected to enhance competitive positioning and generate $30 million to $50 million per year in cost synergies. It’s keeping the Contura Energy name and will led by Contura’s management team, with Kevin Crutchfield continuing as CEO.
Alpha chairman and CEO David Stetson will resign and transition to the Contura board, which will be made up of five Contura directors and four Alpha directors, including Daniel Geiger, John Lushefski and Harvey Tepner.
Crutchfield said in a statement that the transaction wouldn’t have been possible a year ago, but resurgent global coal markets, tightened production after divestitures and cost synergies provide a value-creating opportunity. Stetson said the combined organization will have a stronger balance sheet, greater capabilities and a longer reserve life.
The transaction is expected to close in the third quarter if it clears shareholders.
Contura is a Tennessee-based coal supplier with mining operations across coal basins in Pennsylvania, Virginia and West Virginia. Alpha Natural Resources has mining operations in seven counties in West Virginia and supplies metallurgical coal to the steel industry and thermal coal to generate power.
Contura was formed by a group of Alpha’s former first lien lenders and launched in 2016 with the acquisition of coal assets from Alpha Natural. The sale was part of Alpha’s emergence from its Chapter 11 reorganization process in the U.S. Bankruptcy Court for the Eastern District of Virginia.
Contura and Alpha have since operated independently, although Contura has purchased and resold some Alpha’s produced metallurgical coal to customers overseas.
Since its launch, Contura has tried to strengthen its balance sheet, including refinancing its debt, expanding its trading and logistics platform and divesting its two Powder River Basin thermal mines in December. Alpha also has taken steps to streamline its capital structure and sell higher-cost, active and idle operations.
Bracewell assists Phillips 66 Partners on pipeline, terminal JV’s
Bracewell was busy on another deal last week, advising Phillips 66 Partners on joint ventures involving the Gray Oak Pipeline and South Texas Gateway Terminal with Andeavor, Enbridge and Buckeye Partners.
The Houston lawyers who worked on the deal included partners Alan Rafte, Dale Smith, Bruce Jocz and Rebecca Baker; counsel Tamara McKinzie and associates Patrick Johnson, Shannon Rice and Sidney Troy Nuñez. Attorneys in Washington, D.C. and New York were also part of the team.
V&E advised Andeavor while Sidley Austin assisted Enbridge and Morgan Lewis aided Buckeye.
Phillips 66 Partners entered into joint venture, construction and operating agreements with Andeavor and an equity option with Enbridge in relation to the pipeline. Phillips 66 Partners also agreed to take a 25 percent interest in a joint venture with Buckeye to develop the new South Texas Gateway Terminal at the mouth of Corpus Christi Bay.
Phillips 66 Partners will own 75 percent of the pipeline joint venture while Andeavor will hold 25 percent. Enbridge will have an option to indirectly acquire up to 32.75 percent of the pipeline joint venture.
Buckeye will operate the South Texas Gateway Terminal and have a 50 percent stake while Phillips 66 Partners and Andeavor will each have a 25 percent ownership interest.
The pipeline is expected to be commissioned by the end of 2019 and will transport crude oil from West Texas to the Corpus Christi, Sweeny and Freeport markets. It will be linked in Corpus Christi to the new deep-water marine storage terminal, which will be the pipeline’s primary outlet.
Hogan, Skadden advise on SABIC joint venture with Exxon Mobil
Hogan Lovells said May 2 it advised Saudi Arabian chemicals maker SABIC on its recently announced joint venture with ExxonMobil to advance development of the Gulf Coast Growth Ventures project, a 1.8 million tonne ethane cracker planned for construction in San Patricio County, Texas.
The project also will include a monoethylene glycol unit and two polyethylene units.
Construction will begin after the environmental permitting process is completed, which is expected between 2021 and 2022.
The Hogan Lovells team advising SABIC was led by partners David Locascio and Jeffrey Whittle in Houston along with a partner in the firm’s Washington, D.C. office. Other team members included partner Cameron Cosby and senior associate Polly Sims in Houston, along with a senior associate in the firm’s Denver office.
ExxonMobil used Skadden Arps partners Eric Otness and Frank Bayouth and associate MarcAnthony Delgado in Houston.
When completed, the plant will become the largest of its type in the world. It’s SABIC’s third joint venture with ExxonMobil, which includes two in Saudi Arabia.
SABIC recorded a net profit of $4.9 billion last year on sales of $39.9 billion. Its assets amounted to $86 billion and production reached 71.2 million metric tons. It employs 34,000 worldwide and operates in more than 50 countries.
The Saudi Arabian government owns 70 percent of SABIC with the remaining 30 percent publicly traded on the Saudi stock exchange.
V&E, Eversheds counsel on Northstar-Colonial deal
V&E said May 2 it advised Oaktree Capital Management-backed Northstar Midstream on the sale of its Northstar Port Arthur Terminal to a unit of Colonial Pipeline for an undisclosed sum.
The V&E corporate team was led by partner Shamus Crosby with assistance from associates Ali Choate, Aaron Carpenter and Jonathan Sapp, all of Houston.
Eversheds Sutherland assisted Colonial. Partner Ram Sunkara, who offices in Houston and Atlanta, led the transaction team with support from firm attorneys in Atlanta and Washington, D.C.
Simmons was financial adviser to NorthStar and Oaktree.
The terminal is a newly-constructed marine-export facility in Port Arthur with marine loading capabilities and pipeline connectivity to the Port Arthur refining complex.
Georgia-based Colonial is owned by CDPQ Colonial Partners, IFM (US) Colonial Pipeline 2, KKR-Keats Pipeline Investors, Koch Capital Investments and Shell Pipeline.
Sidley Austin, V&E work on WhiteWater pipeline agreements
Sidley Austin said May 3 it advised private equity-backed WhiteWater Midstream on agreements with WPX Energy, MarkWest Energy Partners and Targa Resources for its Delaware Basin Agua Blanca Pipeline.
Sidley partner Cliff Vrielink in Houston led the deal team, which included associate Chelsie Gonzales, also of Houston. They had help from attorneys in the firm’s Washington, D.C. office.
Vinson & Elkins partner Chris Collins in Houston represennted Targa. WPX and MarkWest handled the matter inhouse.
WhiteWater Midstream announced May 2 that it had executed transportation and interconnect agreements for the natural gas residue pipeline, which is a joint venture between WhiteWater and WPX. MarkWest, a unit of MPLX and an affiliate of Targa Resources, will join WhiteWater and WPX as joint venture partners. About 80% of capital expenditures will be funded with project level debt.
WhiteWater also entered into long-term transportation service agreements with two premier Delaware Basin producers in Culberson County. The producers weren’t named.
WhiteWater will own 60 percent of Agua Blanca with WPX holding 20 percent and MPLX and Targa each having 10 percent.
Founded in 2016, Austin-based WhiteWater is backed by equity commitments from Denham Capital Management and Ridgemont Equity Partners.
Paul Hastings aids Great Salt Plains on acquisition
Paul Hastings said May 4 it represented Great Salt Plains on its acquisition of Thunderbird Midstream in Oklahoma.
Energy M&A partner Jimmy Vallee led the Paul Hastings team, which included partners Sam Cooper and Greg Nelson and associates Monica Diddell and Stephen Perry.
Vallee and Nelson previously counseled MVP Holdings on the formation of Great Salt Plains Midstream, a joint venture in Oklahoma’s STACK oil and gas region with Energy Spectrum and Chisholm Oil & Gas.
Thunderbird Midstream used in-house counsel.
The acquisition, which closed May 1, includes a cryogenic natural gas plant and a 34 mile natural gas pipeline gathering system, continuing the expansion of Great Salt Plains’ infrastructure.