The Work

August 13, 2010 3:25 PM

Energy M&A Staying Hot For Am Law 200 Firms

Posted by Brian Baxter

Mergers and acquisitions in the oil and gas market--one of the hottest sectors for transactional work so far this year--got another boost Friday with the announcement that energy company Dynegy was going private in a $4.7 billion deal. One of the largest leveraged buyouts so far in 2010, the transaction involved lawyers from a half-dozen Am Law 200 firms.

Simpson Thacher & Bartlett represented longtime private equity client The Blackstone Group on the transaction. Corporate partner Wilson Neely--a former American Lawyer Dealmaker of the Week for his role advising Blackstone on its $2.3 billion acquisition of Busch Entertainment--and energy and infrastructure practice chair David Lieberman led a team from the firm working on the deal. Neither lawyer immediately returned a request for comment.

Sullivan & Cromwell M&A partners Joseph Frumkin and Audra Cohen, tax partner David Spitzer, and executive compensation partner Matthew Friestedt are advising Houston-based Dynegy on its sale to Blackstone. Dynegy's independent directors first hired Frumkin and S&C last year for a $1 billion sale of nine power plants to LS Power Associates, according to The Deal. (Frumkin was not immediately available for comment.)

Dynegy is being advised on employee benefits matters by Locke Lord Bissell & Liddell partners Edward Razim III and Laurence Hansen, while King & Spalding global energy cochair Neil Levy, energy partner David Tewksbury, antitrust chair Jeffrey Spigel, and antitrust partner Peter Todaro are providing regulatory advice to the company. (Last year Dynegy turned to Akin Gump Strauss Hauer & Feld to handle the deal with LS Power, a major shareholder.)

Fried, Frank, Harris, Shriver & Jacobson corporate partners Philip Richter and Gus Atiyah advised Goldman Sachs and Greenhill & Co., as lead financial advisers to Dynegy on the Blackstone deal.

Bloomberg reports that when taking into account debt held by Dynegy, which has lost 94 percent of its market value during the past three years, the deal's value shrinks to roughly $540 million. Blackstone is also receiving $1.36 billion from Princeton-based power producer NRG Energy for ownership of Dynegy plants in California and Maine.

Kirkland & Ellis energy practice chair Mitchell Hertz took the lead advising NRG on its side deal with Blackstone, along with corporate partners Gerald Nowak and Patrick Groomes and energy partner Elaine Walsh. NRG Energy is also acquiring a power station in Texas from Kelson Limited Partnership for $525 million. Both of NRG's acquisitions are expected to close by the end of the year. (Hertz was out of the office on Friday and unavailable for immediate comment.)

The Blackstone-Dynegy deal wasn't the only energy transaction announced in recent days. Late Thursday, offshore drilling contractor SeaDrill announced that its Seawell subsidiary--a Norwegian drilling and well services provider--had acquired drilling and oil field services company Allis-Chalmers Energy for $890 million. Both Kirkland and S&C snared legal advisory roles on the deal by Hamilton, Bermuda-based SeaDrill.

William Plapinger, coordinator for S&C's European offices, and M&A partner Stephen Kotran are advising Goldman Sachs International as financial adviser to Seawell on the deal. Kirkland corporate partners Stephen Fraidin--another former American Lawyer Dealmaker of the Week for his work representing NRG Energy in a hostile takeover battle--and William Sorabella represented RBC Capital Markets as financial adviser to Allis-Chalmers on the transaction.

Robert Jewell, the managing partner of Andrews Kurth, advised Allis-Chalmers on the acquisition along with corporate partner Henry Havre and tax partner Robert McNamara. Kai Thøgersen, managing partner of Norwegian firm Thommessen in Oslo, served as local counsel to the Houston-based company along with capital markets partner Lars Eirik Gåseide Røsås. Allis-Chalmers general counsel Theodore Pound and assistant general counsel Robin Brice headed up in-house affairs.

Skadden, Arps, Slate, Meagher & Flom M&A partner Frank Bayouth, European corporate finance cochair Richard Ely, and tax partner Sally Thurston advised Seawell on the Allis-Chalmers acquisition. Norwegian firm Wiersholm, Mellbye & Bech served as local counsel to Seawell. The deal is expected to close by the end of the year.

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