As journalists, we are incapable of allowing a new year to unfold without lists of everything, from our favorite recipes to dead people.
This is our list, a roster of transactions that caught our attention this year among the more than 2,000 Texas-related transactions submitted to the Corporate Deal Tracker in 2024. These “Texas-related” deals are transactions that involve either Texas-headquartered parties, Texas-based lawyers or, better yet, both.
It’s not a ranking, just a list of deals that struck us as significant for reasons we’ll try to explain. They’re not necessarily the biggest or the splashiest, but deals filtered by what they suggest to us about the 2024 deal market both within Texas and beyond.
AI’s trillion-dollar traction
Like Cher or The Rock, each year seems to earn its own shortcode to explain its market zeitgeist: 2020 = “pandemic,” 2021 = “energy transition,” 2022 = “inflation,” 2023 = “consolidation.”
Even in Texas — perhaps especially in Texas — few are likely to argue with our belief that in 2024 “artificial intelligence” had an outsize influence over deal markets. Far more than prospectus-driven vapor, the far-reaching potential of AI is fusing high-tech Texas with its legacy energy industry in ways unforeseen by many just a few years ago.
Thus, it caught our attention on Oct. 30 when KKR announced the formation of a $50 billion strategic partnership with Energy Capital Partners, a collaboration aimed at the development of data center power generation. We’re choosing to mention this deal first because it not only epitomizes that fusion of technology and energy essential to hyperscaling — for data services and cloud storage — but also because KKR was advised by two Houston partners at Simpson Thacher & Bartlett, Shamus Crosby and Breen Haire. And at $50 billion, it also happened to be the largest Texas-related transaction of 2024. But KKR says it may spend as much as $250 billion annually on data centers and their energy needs. That is the essence of significance.
Renewing renewables
AI-driven hyperscaling is also leading a newly reinvigorated demand for the development of 24/7 renewable energy production, which — according to a recent study by McKinsey — is likely to quadruple energy demand from data centers by 2030. Data centers don’t care where the power comes from — whether wind or coal, natural gas or nuclear fission; it just has to be steady, abundant and, with the emergence of AI, hopefully cheap. The need is fueled by the fact that a simple ChatGPT query consumes more than ten times the energy of a simple Google search. That brings a renewed economic incentive to renewables.
In 2024, there were 88 Texas-related deals directly involving renewable energy sources or utility-grade storage valued at $24 billion. That’s more than 1 in every 5 of 396 Texas-based energy-related transactions. And many of the deals can be traced back to the need for cheaper sources of energy for data services, cloud storage or other high-energy uses like bitcoin mining.
Breen Haire, for instance, also teamed with Simpson partner Katy Lukaszewski to advise KKR in its $2 billion joint venture with Hannon Armstrong Sustainable Infrastructure, a broad-based investor in solar, wind and biofuels projects.
The investments are both local and global, and in 2024, the intersection of O&G and renewables became commonplace and, on occasion, ironic.
In July, Blackstone announced its $1.1 billion acquisition of a 30.2 percent interest in Kansas-based midstream Tallgrass Energy. Blackstone purchased the stake from Spain’s Enagás S.A. Latham & Watkins, led by Houston partners Ryan Lynch and Kevin Richardson advised Enagás and Vinson & Elkins counseled Blackstone, led by Houston partners Lande Spotswood and Alex Robertson.
The deal had an interesting and significant backstory.
In 2020, Enagás was part of a Blackstone-led consortium — along with GIP, USS and NPS — that purchased Tallgrass in a $3.5 billion take-private deal. Enagás paid about $1.6 billion for its stake in Tallgrass. Enagás announced that the Tallgrass sale involved a $389 million loss on its end but that the cash from the transaction would allow Enagás to continue its long-planned rotation to renewable assets for the EU market. An EU mandate, Royal Decree-law 8/2023, designated Enagás as provisional manager of the EU’s Hydrogen Backbone Network.
Meanwhile, O&G lives on …
Texas being Texas, there was no shortage of traditional oil & gas deals as the last couple of years of consolidation continued apace.
The largest pure O&G deal involved Midland-based Diamondback’s $26 billion merger in February with cross-town rival Endeavor Energy Resources. The deal with Endeavor, which operated more than 2,700 wells in the Permian, helped position Diamondback as the eighth-largest producer in the basin over the last five years. Diamondback was advised by Wachtell, Lipton, Rosen & Katz, Endeavor by Paul, Weiss, Rifkind, Wharton & Garrison and Vinson & Elkins. Skadden advised Diamondback’s financial advisor, Jefferies.
Wachtell was also involved in the second-largest energy deal. The New York firm advised Houston-based ConocoPhillips in its $22.5 billion acquisition of Marathon Oil. Marathon was counseled by the Houston-based Kirkland & Ellis duo of Sean Wheeler and Debbie Yee.
In January, Chesapeake Energy and Southwestern Energy announced a $7.4 billion all-stock merger that marked the end of Chesapeake. Chesapeake was advised by Wachtell and Latham & Watkins, with Houston partner Kevin Richardson and Austin partner Bill Finnegan in the lead. For Southwestern, which is based near Houston, Kirkland & Ellis was outside counsel, with Houston partner Doug Bacon and Austin partner Kim Hicks at the helm.
Founded in 1989, Chesapeake quickly developed a controversial profile as an aggressive, unconventional producer of natural gas — especially after its discovery in 2008 of the Haynesville Shale. But in the wake of the Great Recession, a massive debt load forced Chesapeake to divest much of its gathering and processing business, marked by the $4.975 billion sale in December 2014 of its positions in the Marcellus and Utica Shale — to Southwestern Energy.
Emerging from bankruptcy in 2021, a slowly rebuilt Chesapeake was able to finance the merger with Southwestern, which closed in October. With the merger, Chesapeake-Southwestern became the largest natural gas producer in the U.S., poised to feed the emerging LNG plants and terminals along the Texas-Louisiana Gulf Coast. Upon closing, however, the combined company was renamed Expand Energy. And Chesapeake Energy ceased to exist.
April saw the trend of consolidation hit the oilfield services sector with the SLB (Schlumberger) acquisition of ChampionX Corp. in an all-stock transaction valued at $7.7 billion. Latham & Watkins advised SLB with a corporate squad led by Houston partners Ryan Maierson and Thomas Verity, alongside Chicago-based partner Christopher Drewry. Weil advised ChampionX from New York.
… while LNG stumbles on
2024 was a rough year for LNG. It began in January when the Biden Administration announced a pause in new permitting for LNG exports while the government studied the environmental effects of processing and transporting the liquefied product.
Less than two years before, with the February 2022 invasion of Ukraine, LNG seemed poised for a heroic and profitable introduction to markets in Western likely to be deprived of Russian natural gas.
Since then, however, there has been a veritable parade of setbacks for the burgeoning industry in the form of court losses, warmer-than-expected winters, high-than-expected stockpiles, lower-than-expected demand and, above all, natural gas prices that seem all but frozen in place.
All that was punctuated in July with the decision by Tellurian Inc. to sell itself to Australia’s Woodside Energy Group for $1.00 per share in cash, meaning $900 million. Even that was a 75 percent premium over Tellurian’s closing price per share on July 19. Tellurian was advised by Akin Gump Strauss Hauer & Feld, led by Houston partner John Wetwiska.
Perhaps most telling, the deal included a loan of up to $230 million to keep Tellurian’s Driftwood LNG site in Lake Charles, Louisiana, active as it headed for completion. Upon closing of the deal in October, the Tellurian project was renamed Woodside Louisiana LNG.
Take PE to the ballgame
In August, owners of the National Football League voted to allow private equity to buy stakes in NFL teams. The measure allows the purchase of up to 10 percent ownership in a team — a small stake, but a giant step in the quickly escalating private equity interest in all forms of sport.
In December, Dallas-based Arctos Partners purchased a stake in the NFL’s Buffalo Bills, advised by Kirkland & Ellis through Dallas partner Michael Considine and Houston partner Adam Garmezy.
Sports-related deals abounded in 2024. Kirkland’s Considine helped Arctos acquire a stake in the Utah Hockey Club, an NHL hockey expansion franchise based in Salt Lake City. He also teamed with Austin partner John Kaercher on the purchase by Echo Investment Capital of a stake in the Oklahoma City Energy, a professional soccer team.
And in professional pickleball (proof that the professionalization of sports is, indeed, boundless) Gibson Dunn & Crutcher advised PE firm SC Holdings, D.C. on its merger of two rival pickleball circuits, the Dallas-based Carvana PPA Tour and MLP by Margaritaville (Seriously, that’s its name).
And speaking of names, the downtown home of the Houston Astros is changing brand names and its branded business from orange juice to HVAC services. In November Daikin Comfort Technologies signed a 15-year deal with the team that will change the name of Houston’s baseball venue from Minute Maid Park to Daikin Park.
The deal wasn’t exactly M&A, but Daikin is no stranger to the transactions market or the CDT Roundup. Since 2021, the Roundup has reported on 15 transactions with Daikin with the Japanese-owned company on the buying side of deals HVAC operations from Seattle and San Diego to Falls River, Mass., as well as Houston, where in nearby Waller, they operate a 4.2 million SF campus with one of the largest HVAC manufacturing operations in the world. On most of those deals, Gibson, Dunn & Crutcher has advised Daikin and Houston partners Stephen Olson and Sean McFarlane advised on the naming deal.
HVAC has become a comfortable space for PE investing. In 2024, there were 19 acquisitions in the HVAC space. It’s both a testament to the role of climate change on investing and — once again — the need for cooler residential environments for those hyperscaling computers.
Verizon dials back Frontier fiber
In September, Verizon announced its purchase of Dallas-based fiber network provider Frontier Communications. The price was $9.6 billion, which became a $20 billion with the addition of Verizon’s assumption of Frontier’s debt. Frontier has spent more than $4.1 billion over the past four years upgrading its fiber network, which currently includes more than 2.2 million subscribers across 25 states, and has derived more than 50 percent of its revenue from fiber products. Debevoise & Plimpton acted as legal counsel to Verizon; Cravath, Swaine & Moore advised Frontier and Paul, Weiss, Rifkind & Garrison advised its strategic review committee.
Frontier, the largest pure play fiber provider in the nation, filed for bankruptcy in 2020, but had emerged invigorated, particularly in its B2B business — which it credits to a step-by-step introduction of AI into its routine sales processes.
The deal has been approved by Frontier stockholders. When the deal closes, perhaps by the end of 2025, the Frontier network will be folded into Verizon’s base of 7.4 million connections in 9 states and Washington, D.C. Geographically, the acquisition expands the Verizon fiber network from its core Northeast and Mid-Atlantic markets to include Florida, California and Texas, three states the provided Frontier with a boost in market share when they purchased the systems in 2016 — from Verizon.
Home Depot raises the roofer
Construction acquisition may be a splash-less corner of the M&A market, but one of the biggest splashes in Texas M&A came in the form of Home Depot’s $18.25 billion acquisition of SRS Distribution in March 2024. Yes, $18.25 BILLION.
Based in the North Texas suburb of McKinney, SRS has amassed — mainly through its own acquisitions — 775 locations for its distribution of roofing and construction supplies. The deal closed in June. The deal was guided in-house by SRS general counsel Dustin Gunderson, who tapped Latham & Watkins as outside legal counsel. The Latham team was led from New York by partners Paul Kukish and Michael Vardanian.
That was the biggest among the 41 construction-related transactions submitted to the Texas Lawbook’s Corporate Deal Tracker last year, but there were others of significance.
Dallas-based Arcosa Inc., for instance, agreed in August to acquire the construction materials business Stavola Holding Corporation for $1.2 billion. Stavola has been a provider of aggregates and other building materials in the New York and New Jersey markets since 1948. The Stavola acquisition, Arcosa’s first in the New York-New Jersey MSA was part of its long-term strategy to expand its footprint to grow in a variety of attractive economic regions in an effort to reduce the cyclicality of a business vital to the infrastructure sector.
But as part of the same announcement, Arcosa also announced the divestiture of its steel components business to New York-headquartered Stellex Capital Management, signaling a move by Arcosa towards a core business focus on aggregates and building materials.
The deal involved lots of Texas lawyers, particularly Kirkland & Ellis partner Kevin Crews, who represented Arcosa in at least four other transactions. But it also involved Baker Botts, whose partners Luke Weedon and Samantha Crispin advised on the financing. And also Gibson Dunn & Crutcher led by partners Robert Little and Joe Orien, who advised Arcosa on its divestiture of its steel components business.
And finally, to keep our AI thread alive amidst all the asphalt and steel, Thomas Laughlin, a Dallas partner at Kirkland & Ellis, advised Dallas-based Braemont Capital on its acquisition of Loenbro from Tailwind Capital. Colorado-based Loenbro provides electrical and mechanical services to data centers and their adjacent infrastructure.
As we tried to say, these may not be the biggest or most complicated deals inked in 2024, but each has a significance beyond itself as a sign, a trigger or simply what we consider an interesting backstory.
Sure, that makes it subjective. But after all, it is our list.