Top US firms line up on $7.2bn Apollo-led energy LBO
Five top US law firms have won roles as a private equity consortium led by Apollo Global Management has agreed to acquire El Paso Corporation's oil and gas exploration and production units in a $7.15bn (£4.5bn) leveraged buyout, reports The Am Law Daily. El Paso announced last week that it had reached an agreement to sell the businesses to a group composed of Apollo, Access Industries and Riverstone Holdings. The deal reportedly marks the second-largest private equity takeover of an energy producer.
February 27, 2012 at 07:29 AM
3 minute read
Five top US law firms have won roles as a private equity consortium led by Apollo Global Management has agreed to acquire El Paso Corporation's oil and gas exploration and production units in a $7.15bn (£4.5bn) leveraged buyout, reports The Am Law Daily.
El Paso announced last week that it had reached an agreement to sell the businesses to a group composed of Apollo, Access Industries and Riverstone Holdings. The deal reportedly marks the second-largest private equity takeover of an energy producer.
The agreement is designed to expedite the sale of El Paso to Houston-based energy company Kinder Morgan, which announced in November it would acquire its oil and gas rival for $38bn (£24bn), including debt. That transaction, which is scheduled to close in the second quarter of this year, will create the largest natural gas pipeline network in the US and the fourth-largest energy company in North America.
When El Paso announced plans last year to sell off its exploration and production businesses, it retained Wachtell Lipton Rosen & Katz to advise on the process. But with Kinder Morgan, represented by Bracewell & Giuliani and Weil Gotshal & Manges, now in line to acquire El Paso, its lawyers have taken over the transactional work related to the sale.
Weil corporate partners Jay Tabor and Rodney Moore in Dallas are advising El Paso on the divestiture of the exploration and production units.
Lawyers from Debevoise & Plimpton, O'Melveny & Myers, Paul Weiss Rifkind Wharton & Garrison and Willkie Farr & Gallagher are advising the private equity consortium on its purchase of El Paso assets.
Apollo, which is planning $5.5bn (£3.5bn) in debt financing for the acquisition, turned to Paul Weiss to serve as counsel to the investor group on the proposed transaction. M&A partner John Scott, finance partners Gregory Ezring and Mark Wlazlo, tax partner Brad Okun, deputy corporate chair Marco Masotti, corporate partner James Schwab and M&A counsel Brian Finnegan are leading a team from Paul Weiss working on the deal.
The firm's work for Apollo got a huge boost last year when it recruited seven corporate partners from O'Melveny, including current Paul Weiss partners Ezring, Wlazlo, Okun, and Scott, all of whom handled Apollo work. Apollo's general counsel, John Suydam, is the former head of O'Melveny's M&A practice.
O'Melveny environmental practice chair Eric Rothenberg in New York is serving as special counsel to Apollo on energy and environmental matters related to the divestitures by El Paso.
New York-based Access, which is controlled by Russian billionaire Len Blavatnik, is being advised by a team of Debevoise lawyers led by M&A partners Kevin Rinker and Jeffrey Ross and tax partner David Schnabel, while Willkie Farr corporate partners Bruce Herzog and Adam Turteltaub in New York are representing Riverstone in the matter.
Completion of the sale of El Paso's exploration and production units is dependent upon the successful close of the company's acquisition by Kinder Morgan.
The Am Law Daily is a US affiliate title of Legal Week.
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