It’s not every day that one of the biggest players in the Permian Basin targets a multibillion-dollar acquisition – and it’s certainly not every day that an indication of interest moves to a definitive purchase agreement in a little more than one week.
That is the eye-popping tale of how Pioneer Natural Resources’ planned acquisition of DoublePoint Energy came to be.
While naturally there was internal work done ahead of time, Pioneer sent along its initial indication of interest on March 24, according to Michael P. Darden, who co-led the Gibson Dunn & Crutcher team alongside Jeffrey Chapman that advised the Irving company on the transaction.
DoublePoint sent a response the next day. In turn, Gibson already had prepared a first draft of the membership interest purchase agreement to ship off to Vinson & Elkins, Fort Worth-based DoublePoint’s outside counsel. Alston & Bird also advised DoublePoint on the deal.
“It’s hard to believe that was only about a week ago,” said Darden when he spoke to The Texas Lawbook on Friday.
Darden said as of March 25 “swords had been crossed.”
“And I don’t mean that in a bad way,” he added.
It was at that point though both Gibson and V&E were fully engaged to move forward and get together teams to work whatever hours were necessary to get the deal done as quickly as possible. V&E came back with another response and draft late Saturday night, and by the beginning of the next week, Gibson returned with a new one in place. The draft volley continued throughout last week.
“We were going full-bore – maybe not all night, but all day and well into every night,” he recalled.
Yet, the $6.4 billion deal was not without complications.
“There are unique challenges, but those usually get worked out over time as you negotiate. We had to address those unique challenges in a very, very short time period and get both sides – counsel and principals – to understand and agree on how we would address them,” said Darden.
The share and cash deal brought along its own hurdles due to the two types of compensation, especially involving publicly traded shares and the nature of the high quality, in-demand assets.
And that’s not to mention the current world of remote work. Darden recollected all-hands meetings in which he’d hear dozens of beeps indicating someone new had joined a conference call line.
“Even in what I would call the ‘normal environment,’ not the one we’re living in now, doing this deal in a week would have been phenomenal. It would have been unbelievably speedy. When you add the fact that we were in this other environment, it just makes it border on the miraculous.
“I’m sorry I said that,” Darden added with a laugh. “We had some internal discussions about ‘How did we do that?’ It was unbelievable.”
Darden points to the willingness of Pioneer, DoublePoint and other stakeholders to reach an agreement so quickly, in addition to outside counsel.
“We were thoroughly impressed with the V&E team that was working on this. We all know each other; we all do these kinds of deals; and we’re opposite each other a lot,” said Darden.
Outside of Darden and Chapman, the Gibson team included Dallas partner Jonathan Whalen, Houston of counsel James Robertson, New York associate Kristen Poole, Houston associate Nathan Zhang and Denver associate Graham Valenta. Dallas partner Krista Hanvey advised on benefits; Dallas associate Michael Cannon advised on tax aspects; Washington, D.C. counsel Andrew Cline advised on antitrust aspects; and Houston partner Shalla Prichard advised on finance aspects.
V&E’s team was led by Jim Fox, Doug McWilliams and Shay Kuperman, with assistance from Jackson O’Maley, David Bumgardner and Michael Zarcaro. Other key team members included Dan Komarek, Sydney Verner, Billy Vranish, Patrick Whelan, Daniel Wicoff, David Peck, Brian Russell, Tzvi Werzberger, Carter Olson and David Wicklund.
The Alston & Bird team included Mitchell Griffith, Rob Vartabedian, Conrad Hester, Gaye Lentz and Nick Davis.
The deal, which is expected to close in the second quarter, was led internally at Pioneer by Mark Kleinman, general counsel, and Tom Murphy, corporate secretary.
“I’ve done bigger deals and I’ve done deals in the same area – the same price area and same geographical area and deals all over the world – but I’ve never seen one done quite like this,” said Darden.
You can read more about the deal details here.