There weren’t as many deals this week as last week, but they amounted to a whole lot more and involved a lot more Texas lawyers, with mergers and big asset purchases among the highlights.
Seven law firms and 88 Texas lawyers advised on eight transactions worth $14.25 billion, versus six firms and 61 Texas lawyers advising on 12 deals worth $5.3 billion the previous week. The value approached the year-to-date high of $16.5 billion hit in January.
The biggest deals were in power and utilities, the oil and gas infrastructure, or midstream, industry and in real estate.
Akin Gump, Baker Botts counsel on CenterPoint-Vectren $6B merger
As The Texas Lawbook previously reported, two Texas law firms were involved in CenterPoint Energy’s $6 billion purchase of Indiana natural gas utility Vectren on April 23.
Akin Gump represented Houston-based CenterPoint Energy on the acquisition with a team led by Houston energy partner W. Robert Shearer along with attorneys in the firm’s New York and Washington, D.C. offices. Dallas partner Michelle Reed also pitched in from the firm’s cybersecurity, privacy and data protection practice.
Bingham Greenebaum Doll was CenterPoint’s Indiana counsel.
Taft Stettinius & Hollister was Vectren’s Indiana counsel.
Akin Gump has advised CenterPoint before, including on its $363 million investment in Enable Midstream Partners in 2016 with partners David Elder and John Goodgame in Houston and Houston office partner-in-charge Chris LaFollette as part of the team. So had Baker & Botts’ Mayor, who advised it on a $575 million exchange offer for convertible notes.
CenterPoint’s general counsel is Dana O’Brien, who joined the utility in 2014 from logistics company CEVA Logistics, where she was chief legal officer and chief compliance officer and a member of the executive board. Before that the University of Texas-trained lawyer was general counsel at Quanta Services, a construction and service provider to the utility industry. After law school, she clerked for then-Justice Nathan Hecht of the Texas Supreme Court and began her legal career as a corporate associate at Weil, Gotshal and Manges.
Providing financial advice on the deal were Goldman Sachs for CenterPoint and BofA Merrill Lynch for Vectren.
The transaction has to clear Vectren shareholders, the Federal Energy Regulatory Commission, the Federal Communications Commission and Hart-Scott-Rodino but should close in the first quarter of next year.
Texas attorneys from five firms aid on EQT deals valued at $5B
EQT Midstream Partners announced several long-awaited transactions on April 26 valued at $5 billion to boost its business and help it streamline its operations. And five Texas law firms were involved in making them happen.
The deals came after parent EQT Corp. bought Rice Energy last year, which left the fate of Rice affiliate Rice Midstream Partners hanging in the balance.
EQT Midstream is buying EQT Corp.’s Olympus gathering system and a 75 percent interest in Strike Force Midstream along with Gulfport Energy’s 25 percent stake in a multi-part transaction worth $1.69 billion. EQT Corp. will receive $1.15 billion in cash and 5.9 million common units of EQT Midstream while Gulfport will receive $175 million in cash.
EQM Midstream also announced a unit-for-unit merger with Rice Midstream at an implied transaction value of $2.44 billion, including $325 million in debt. And its general partner EQT GP Holdings is purchasing the incentive distribution rights of Rice Midstream Partners from Rice Midstream GP Holdings, a unit of EQT, for $937 million in stock.
Baker Botts assisted EQT along with Wachtell, Lipton, Rosen & Katz.
Latham is advising Rice Midstream Partners’ conflicts committee. The team was led by Houston partner Ryan Maierson with associates Nick Dhesi, Ryan Lynch, Taylor Anthony, Caroline Ellerbe and Rebecca Kendall.
Others providing counsel were Houston partner Tim Fenn with associate Bryant Lee on tax matters. Houston partner Joel Mack assisted on environmental matters with help from an associate in the firm’s Washington, D.C. office, which also handled employee benefits.
Hunton Andrews Kurth is representing the conflicts committee of EQT GP Holdings. The team was led by partner Mike O’Leary and included partners Tom Ford, Robert McNamara and Jocelyn Tau and associates Garrett Hughey, Oliver Fankhauser and Audra Herrera, all of Houston.
Gulfport was counseled by Akin Gump partners Seth Molay and Thomas Yang in Dallas.
Richards Layton & Finger in Delaware advised the conflicts committee of EQT Midstream Partners.
Goldman Sachs was EQT Corp.’s financial adviser while Evercore assisted EQT Midstream, Jefferies helped Rice Midstream Partners and Baird advised the conflicts committee of EQT GP Holdings.
Gibson, Dunn & Crutcher represented Evercore, including corporate partner Hillary Holmes, corporate associate Melissa Pick and tax partner James Chenoweth, all of Houston, with help from a corporate associate in New York.
The EQT Midstream merger with Rice Midstream has to clear Rice Midstream’s unitholders and regulators. EQT Midstream expects the consolidation’s efficiency gains to result in $15 million in annual cost synergies and $500 million of capital avoidance while maintaining similar gathered volume growth.
V&E advises CYS on merger with Two Harbors valued at $1.2B
Vinson & Elkins said April 26 it advised real estate investment trust CYS Investments on its merger with New York-based Two Harbors Investment valued at around $1.2 billion.
The team was led by partner Steve Gill, senior associate Justin Hunter and associate Yong Eoh in Houston along with a partner in the firm’s Washington, D.C. office. They had assistance from associates Brittany Smith, Greg Henson and Michael Pascual in Houston as well as attorneys in the firm’s Washington, Richmond, Virginia, and New York offices.
Partner David D’Alessandro, senior associate Dario Mendoza and associate Steve Oyler in Dallas pitched in on executive compensation/benefits, as did Dallas partner Michael Holmes on litigation.
Lawyers at Sidley Austin in New York counseled Two Harbors, whose financial adviser is JMP Securities. Barclays and Credit Suisse are financial advisers to CYS.
The parties expect to close the deal in the third quarter.
Announced April 26, the transaction involves a stock swap and $15 million in cash. If the exchange ratio is based on adjusted book value per share on March 31, stockholders of Waltham, Massachusetts-based CYS would receive $7.79 per share in cash and stock for each of their shares, a 17.7% premium over CYS’ closing price on April 25.
The parties said the benefits to Two Harbors stockholders include additional capital to support continued growth, an improved cost structure, enhanced scale and liquidity with potential for premium valuation and maintaining a quarterly dividend at 47 cents per share through 2018.
The benefits to CYS stockholders are expected to include enhanced scale and liquidity, a “meaningful” premium for their shares, a more diversified business model and joining with a “strong steward of capital.”
V&E aids Sumitomo on $750M purchase of Crescent Communities
V&E worked on another big deal this past week, advising Sumitomo Forestry America on its purchase of three key businesses owned by MatlinPatterson- and Anchorage Capital Group-backed Crescent Communities.
Terms weren’t disclosed. But an investor disclosure from Sumitomo revealed the price as $370 million plus $380 million in debt assumption, according to the Charlotte Observer. The real estate company, a unit of Japan’s Sumitomo Forestry Co. Ltd., is getting $2 billion worth of projects as part of the deal.
Also advising were Dallas partner David Peck and Houston associate Neil Clausen on tax; Houston partner Larry Nettles and Austin associate Rachel Comeskey Austin on environmental; and Dallas partner Shane Tucker and Houston associate Kristy Fields on executive compensation/benefits.
The rest of the team included Dallas partner Russell Oshman and associate Ken Adler (real estate); Houston senior associate Christie Alcalá (labor/employment); associates Cameron Land of Dallas and Ben Cukerbaum of Austin (corporate); Houston partner Devika Kornbacher and associate Sean Hill (intellectual property); and Dallas counsel Sarah Mitchell (litigation). An attorney in the firm’s London office also assisted on labor/employment.
Moelis was Crescent’s financial adviser and Paul, Weiss, Rifkind, Wharton & Garrison was its outside legal adviser. Falls River Group and Zelman Partners were Sumitomo Forestry America’s financial advisers.
Charlotte, North Carolina-based Crescent said the acquisition brings a new commitment to its integrated real estate platform and long-term growth initiatives. Its executives are staying on.
The companies hope to close the transaction this quarter.
Palmetto Bluff, the 20,000-acre resort community under the Montage brand in Bluffton, South Carolina, will be kept by Crescent Communities’ existing owners.
Crescent Communities has been an operator and developer of residential, commercial/mixed use communities for 55 years with a focus on high growth markets across the southeast and southwest.
Founded 320 years ago, Sumitomo Forestry has said it’s positioning its overseas business as a main area for growth.
Jones Day advises Mill Creek Residential on sale to ASRS for $630M
In another real estate deal, Jones Day said April 23 it advised apartment developer, acquirer and operator Mill Creek Residential Trust on its sale to Arizona State Retirement System, or ASRS, and Mill Creek management.
Terms weren’t disclosed, but The Wall Street Journal reported that the transaction valued Mill Creek at around $630 million. ASRS will end up with 50 percent of the trust, which was previously owned by Rockwood, Crow Holdings and current and former management shareholders.
Jones Day partner David Lowery led the deal team out of Dallas. He’s advised Mill Creek before, including on its development and construction of a 350-unit multifamily project in Orlando, Florida.
Mill Creek said the transaction aligns its management team with a long-horizon investor that offers additional capital. ASRS will gain access to 71 communities representing 19,100 apartments that are operating or under construction.
Mill Creek and ASRS said they will continue to seek investments that center on strategic, long-term opportunities.
Latham, HuntonAK assist on Energy Transfer’s $450M unit offering
Latham & Watkins and HuntonAK said last week that they advised on Energy Transfer Partners’ $450 million preferred unit offering.
HuntonAK assisted the underwriters, which included Merrill Lynch, Morgan Stanley, RBC Capital Markets and Wells Fargo. The lawyers included partners Mike O’Leary, Jordan Hirsch, Phil Haines, Tom Ford, Robert McNamara and Jocelyn Tau and associates Chris Adcock, Brooke Milbauer and Leslie Slaughter.
Dallas-based Energy Transfer Patners priced the offering of 18 million units at $25 per unit. The underwriters had a 30-day option to purchase up to 2.7 million more units.
The midstream services provider plans to use the proceeds to repay amounts outstanding under its revolving credit facility and for general partnership purposes.
Jones Day counsels Lennox on sale of South American unit to Elgin
Jones Day said April 23 it advised Lennox International on the sale of its South American business to private Brazilian company Elgin for undisclosed terms.
Partner James O’Bannon in Dallas led the deal with an attorney in its São Paulo and Cleveland offices.
O’Bannon has counseled Lennox before, including on the sale of its Australia and Asia businesses this past March to Sweden’s Beijer Ref for an undisclosed sum.
Lennox’ chief legal officer is John Torres, who has served in that post since 2008. He previously was general counsel at Freescale Semiconductor, which was originally part of Motorola, where he worked as senior counsel and general counsel for the semiconductor business.
Before Motorola, the University of Chicago-trained lawyer spent 13 years in private practice in Phoenix specializing in commercial law.
Lennox hopes to close the sale later this year if it clears Brazilian regulators. It expects to book second-quarter charges related to the divestiture that amount to 73 cents per share, or $30 million.
Lennox claims to be a global leader in the heating, air conditioning and refrigeration markets. The company has said it wants to focus more on North America and Europe, where it has opportunities and strong market positions.
Bracewell counsels Drilling Tools on pickup of Premium Oilfield unit
Bracewell said April 26 it represented Hicks Equity Partners-backed Drilling Tools International on its purchase of Premium Oilfield Services’ drill pipe rental unit for undisclosed terms.
The team included corporate and securities partner Will Anderson, finance partner Heather Brown, employee benefit/compensation partner Bruce Jocz and litigation partner Bob Nichols all of Houston.
Senior Counsel Allison Perry counseled on tax issues in Houston. The Houston-based associates on the team included Ben Martin, Andy Monk, Andrew Bueso, Jackie Coleman, Christina Katsampes, Yeon Jae Ko, Kristen Wong and Kevin Tamm.
DuBois Bryant & Campbell assisted Premium Oilfield, including partners Nick Fox and Jody Kerwin in Austin.
Houston-based PPHB advised Premium Oilfield Services on the sale. PNC Business Credit provided financing for the transaction.
Hicks Equity Partners is the private equity arm of the Thomas O. Hicks family office. Hicks was one of the founders of private equity firm Hicks Muse Tate & Furst, which raised more than $12 billion across six funds and completed more than $50 billion worth of leveraged acquisitions.
Based in New Iberia, Louisiana, Premium Rental Tools rents drill pipe, tubing workstrings, blowout preventers and handling tools to oil and gas explorers and producers in North America, including the Permian, Bakken, Gulf of Mexico shelf and Gulf Coast land markets. It operates out of facilities in New Iberia as well as in Odessa and Watford City, North Dakota.
Wayne Prejean, CEO of Houston-based Drilling Tools International, said in a statement that the product line will help the company provide another service to customers and that it’s already identified synergies that will be beneficial for the continued growth of its business.
Prejean is a former director of drilex products at Baker Hughes. In 1999, he founded Wildcat Services, which he built up and eventually sold to National Oilwell Varco in 2006 for an undisclosed sum.
Hicks Equity Partners said it looks to invest in established companies with proven track records, strong free cash flow characteristics and a competitive industry position and an experienced management team that wants to partner with long-term capital.
Update:
In February, Riverstone Energy announced that it had sold all of Three Rivers Operating III’s properties in the Permian Basin for $200 million. It didn’t name the buyer, but sources told the Texas Lawbook that it was Pine Brook Partners-backed Admiral Permian Resources, which affiliate Riverstone Holdings also backed. Pine Brook wouldn’t comment.
On April 23, Admiral confirmed it was the buyer. It also said that funds managed by the private equity group of Ares Management acquired a majority stake in Admiral. Admiral said Sidley Austin advised it while Kirkland & Ellis counseled Ares Management.
Sidley partner Mark Metts and associate Katy Lukaszewski in Houston worked on the transaction while Kirkland & Ellis partners Anthony Speier and Rhett Van Syoc, also in Houston, led their deal team.