© 2015 The Texas Lawbook.
By Natalie Posgate
(March 25) – Corporate attorneys Vinson & Elkins’ Houston office negotiated a nice amount of dollar signs this first half of the week.
On Monday, they finalized terms for Dallas-based Energy Transfer Partners’ second dropdown of its retail business to company affiliate Sunoco for $816 million. And today, the firm squared away a $1 billion equity commitment by its client, Quantum Energy Partners, to Houston-based LINN Energy.
Texas lawyers from other firms were on the other end of both deals. Andrews Kurth represented Sunoco and Latham & Watkins represented LINN.
In the dropdown transaction, Sunoco will acquire 31.58 percent of the membership interests of the retail business, which distributes approximately 5.3 billion gallons per year in motor fuel to customers in the East, Midwest and Southeast. Sunoco will pay $775 million in cash and issue $40.8 million in SUN common units to ETP. The transaction is expected to close in April.
ETP turned to Houston corporate partner Matt Strock and associates Lande Spottswood and Brittany Sakowitz to lead the V&E team. They received assistance from associate John Bell. Houston partner Price Manford, Washington, D.C. partner Gary Huffman and Dallas associate Brian Russell provided tax advice. Dallas partner Brian Bloom and Houston associate Jared Whalen advised on executive compensation/benefits aspects of the deal.
Houston partner Jon Daly of Andrews Kurth led the deal for Sunoco. He received assistance from partners Alison Mantor, Lisa Shelton and O’Banion Williams and associates Cindy Lin, Jennie Miller, Patrick Dies, Matt Martin and Matt Grunert.
The first dropdown transaction occurred in September 2014. In that transaction, ETP dropped down 110 company-operated convenience stores and 210 dealer-operated and consignment sites from the MACS/Tigermarket business for $768 million. ETP also sold Hawaii-based Aloha Petroleum to Sunoco for $240 million.
Strock and Daly also were also involved in the first dropdown.
In the other deal, LINN will use the $1 billion equity capital to fund selected future oil and natural gas acquisitions and development in those acquired assets. LINN will have the ability to participate in all acquisition opportunities with a direct working interest ranging from 15 to 50 percent.
Last August, V&E advised Quantum when it formed a $450 million partnership with Tug Hill to pursue the acquisition development and exploitation of North American oil and gas assets.
LINN General Counsel Candice Wells turned to Houston corporate partner Michael Dillard to lead the Latham deal team. Partners Michael King and Sean Wheeler and associates Christopher Little and Elizabeth More also worked on the deal.
Latham has handled many matters for LINN, one of the most recent being a $500 million partnership that the company formed with GSO Capital Partners for future oil and gas development. Dillard, along with Wheeler, led that deal for LINN as well.
Quantum Energy Partners, a Houston-based private equity firm, hired Houston corporate partners John B. Connally and Keith Fullenweider to lead the V&E deal team. Houston partner John Lynch and associates Chris Colquitt, Robert Hughes and Danielle Patterson were also involved.
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