Two M&A deals – valued together at almost $3 billion – were announced on Monday involving 16 Texas lawyers at three different law firms.
Kirkland & Ellis said it counseled Brookfield Super-Core Infrastructure Partners on its agreement to buy a 25% equity stake in liquefied natural gas facility Cove Point from Dominion Energy Inc. for $2 billion in cash.
The Texas members of the Kirkland team were corporate partners Doug Bacon and Allan Kirk in Houston, debt finance partner Roald Nashi (Washington, D.C., and Houston) and corporate associates Joshua Abbotoy and Bryan Jones (both of Houston). Partner David Wheat (of Dallas and Houston) lent a hand on tax matters.
McGuireWoods counseled Richmond, Va.-based Dominion, including partner Jay Hughes in Houston. The rest of the team included attorneys in Richmond, New York, Washington, D.C., and Charlotte. Dominion deputy general counsel Russ Singer in Richmond lead the deal in-house.
J.P. Morgan was Dominion’s financial advisor, including Jay Horine, David Harkin, Andrew Castaldo, Eric Anderson, Alexander Berezner and Ian Martin.
The second deal involved Innophos Holdings Inc.’s sale to One Rock Capital Partners for $932 million in cash and assumed debt, which will make it a private company.
Working on employee benefits were Houston partner Rob Fowler, Dallas partner Jennifer Trulock, Dallas senior associate Marian Fielding and Houston associate Gabriela Alvarez. Austin partner Aileen Hooks advised on environmental issues.
Latham & Watkins counseled New York-based One Rock with attorneys outside of Texas.
Lazard provided financial advice to Innophos while RBC Capital Markets assisted One Rock.
Dominion’s announcement is part of the company’s intent to set up a permanent capital structure for Cove Point. Brookfield Super-Core is an infrastructure fund managed by Brookfield Asset Management Inc.
Dominion chairman, CEO and president Thomas F. Farrell II said in a statement that the Brookfield agreement highlights Cove Point’s value and allows the company to redeploy capital toward its regulated growth capital programs.
Cove Point is an LNG import, export and storage facility on the western shore of the Chesapeake Bay in Lusby, Md. The deal includes a 136-mile pipeline that connects the facility with the interstate pipeline system.
The assets provide liquefaction, gasification, transportation, storage and peaking gas supply services to customers in the U.S., India and Japan. Dominion completed a $4.1 billion expansion last year to enable natural gas exports.
Dominion said the transaction represents an implied enterprise value of $8.22 billion, excluding working capital. The company expects to use the proceeds for general corporate purposes, including reducing its annual common equity financing.
The deal is expected to close by year-end. Dominion is keeping operational control of the facility and its services.
Meanwhile, middle-market private equity firm One Rock agreed to acquire all of Innophos’ outstanding stock for $32 per share in cash. The offer represents an 18% premium to the 30-day volume-weighted average closing share price of Innophos’ common stock ending Sept. 9, the last trading day before market speculation about a potential transaction.
That deal is expected to close the first quarter of 2020 if it clears stockholder and regulatory approval.
The definitive agreement includes a 30-day “go-shop” period when Innophos, with the help of its legal and financial advisors, will solicit alternative acquisition proposals and potentially enter into negotiations about those proposals. Innophos said it can’t assure that the process will result in a better proposal or that any other transaction will be approved or completed.
Under the agreement’s terms, Innophos has suspended all dividend payments.
The transaction will be financed through committed equity financing provided by One Rock affiliates as well as committed debt financing from several financial institutions.
Innophos chairman, CEO and president Kim Ann Mink said in a statement that after careful consideration and a strategic alternatives review, including an outreach program to multiple financial and strategic bidders over several months, the board determined that a sale to One Rock was in the best interest of its stakeholders.
“We remain confident that our transformational strategy is the right path forward for Innophos; however, executing on this strategy in an increasingly volatile macroeconomic and complex financial environment as a small-cap public company remains challenging and could take longer than initially expected,” she said. “While we believe our long-term goals are achievable, we believe that the offer from One Rock is in the best interest of our stockholders as it will deliver immediate and certain value.”
One Rock managing partner Tony W. Lee said Innophos’ innovative ingredient solutions are used by world-leading brands across a range of attractive food, health, nutrition and industrial markets.
“Part of our goal is to maximize Innophos’ growth potential by continuing to expand its presence in high-growth food, health and nutrition markets while further strengthening and optimizing its cash-generative core business,” he said.