Several Texas attorneys were involved in the big utility merger announced late Wednesday in which Canada’s Hydro One Ltd. is acquiring Avista Corp. of Spokane, Wash., for $5.3 billion.
Andy Calder, a corporate partner in Kirkland & Ellis’ Houston office, advised Avista on the buyout. Attorneys from the firm’s New York and Washington, D.C. offices were also part of the deal team.
Bracewell assisted Hydro One with a team that included several attorneys in Houston. They included employee benefits and executive compensation partner Bruce R. Jocz, environmental partner Heather M. Palmer, employment partner Rebecca L. Baker and senior benefits counsel Allison K. Perry. Lawyers in the firm’s New York, Hartford, Conn., and Washington, D.C. offices were also part of the effort.
Bracewell spokesman Paul Grabowski in Houston said the firm was able to win Hydro One’s business based on its reputation in the utility industry, noting that lead M&A lawyer John Klauberg in New York also advised Great Plains Energy Inc. on its $12.2 billion acquisition by Westar Energy Inc. (which had to be reworked to appease Kansas regulators).
Hydro One’s chief legal officer is James Scarlett, who was a former senior partner at the Toronto law firm, Torys. Avista’s senior counsel is Marian Durkin, who previously was deputy counsel at United Airlines in Chicago after spending 18 years at Briggs and Morgan in Minneapolis.
Moelis & Co. was Hydro One’s financial adviser on the deal with a team that included Scott DeGhetto in Houston and two associates in New York. Bank of America Merrill Lynch assisted Avista with bankers based in New York.
The transaction works out to $53 per share for Avista, a 24 percent premium over its closing price. The companies expect to file regulatory documents within 60 days and close the deal in the second half of next year.
Chris Ellinghaus, a power and utilities analyst at Williams Capital Group LP in New York, said the combination of two hydroelectric-centric utilities is logical and a competing bid at a higher valuation is unlikely. But he isn’t certain that the Washington Utilities and Transportation Commission, or WUTC, will accept Avista’s Hydro One merger request.
“The WUTC is highly unpredictable at this point after the recent rate case denial and Washington is indeed running out of publicly traded utilities,” he said. “Politics could play a role in the approval of the transaction.”
Ellinghaus expects more M&A in the sector, noting that El Paso, Texas-based El Paso Electric Co. and Otter Tail Corp. in Fergus Falls, Montana, have “reasonable chances of success” of being taken over and New Jersey Resources Corp. and South Jersey Industries Inc. have been rumored to be takeover targets. “I wouldn’t be surprised on either,” he said.