Private equity–backed natural gas pipeline operator Crestwood Midstream Partners L.P. and energy services companies Inergy L.P. and Inergy Midstream L.P. announced Monday they plan to form a partnership to transport, process, and store gas and oil extracted from many of the country’s largest shale formations.
The deal, which will create a company with an enterprise value of approximately $7 billion, brought assignments for lawyers in Houston—where the recent boom in energy work has created a rush by Am Law 200 firms to open offices there—as well as in New York and Delaware.
At the end of a complex multistep transaction, First Reserve—the energy-focused private equity firm that owns 43 percent of Crestwood Midstream and 100 percent of its affiliate Crestwood Holdings LLC—will control the combined company.
Both Inergy Midstream and Inergy L.P. will continue to be listed on the New York Stock Exchange once the deal is complete, while publicly traded Crestwood Midstream will be merged with a subsidiary of Inergy Midstream.
The transaction is expected to take place over the next several months. Robert Phillips, the chairman, president, and CEO of the Crestwood entities, will lead the combined operations, according to a joint press release, with the rest of management coming from a mix of the two sides.
"Both of our companies are focused on capitalizing on the rapidly developing U.S. shale plays," current Inergy and Inergy Midstream chairman and CEO John Sherman said in the statement.
Houston-based Crestwood turned to Simpson Thacher & Bartlett and Akin Gump Strauss Hauer & Feld to help it execute the deal, while the Inergy companies sought legal advice from Vinson & Elkins.
Simpson Thacher is a longtime adviser to First Reserve and helped the private equity fund in 2010 when Crestwood Midstream paid $773 million for a controlling interest in Quicksilver Gas Services L.P. M&A partner William Curbow in New York led the Simpson Thacher team on both that deal and the Inergy transaction.
The primarily New York–based deal team from Simpson also included M&A associate John O’Connell; M&A counsel Chris May and associate John Pitts in Houston; partner Alden Millard and associates Hayley Urkevich Nivelle and Amy Ward on credit aspects; capital markets partner Edward Tolley and associate David Azarkh; executive compensation and employee benefits partner Brian Robbins, counsel Aimee Adler and associate Eric Wolf; partner John Creed and associate Sean Austin on tax aspects; intellectual property associate Jodie Pimentel; and senior counsel Michael Isby and associate Timothy Mulvihill on environmental issues.
Akin Gump partner John Goodgame advised Crestwood alongside his Houston-based colleagues; partner Thomas Weir on tax aspects, M&A counsel Andrew Lehman, and energy transactions associate Jon Boben.
From Vinson, corporate partners Michael Rosenwasser and Gillian Hobson led a team advising Inergy, assisted by tax partner John Lynch and associates Kai Liekefett, Julian Seiguer, and Ryan Carney.
Vinson has worked for Kansas City, Missouri–based Inergy since representing Inergy L.P. on its 2001 initial public offering, Hobson said Monday. Since then, the firm has advised Inergy on several transactions, including last year’s sale of Inergy’s retail propane business to Suburban Propane Partners for $1.8 billion. (In addition to its midstream energy businesses, Inergy also makes table salt.)
A trio of Delaware law firms also played a role on the deal: Morris, Nichols, Arsht & Tunnell advised a conflicts committee of the Crestwood Midstream board of directors; Richards, Layton & Finger represented a committee of independent directors of the Inergy board; and Potter Anderson & Corroon advised a committee of independent directors of the Inergy Midstream board.