Vinson & Elkins, Thompson & Knight Lead on $1 Billion Pipeline Deal

Penn Virginia Resource Partners will expand its presence in Pennsylvania’s Marcellus Shale region, agreeing to acquire pipeline company Chief Gathering in a $1 billion deal.

Among Chief Gathering’s assets are six natural gas gathering systems that cover more than 300,000 acres in northeastern Pennsylvania and West Virginia. The midstream pipeline company is owned by Chief E&D Holdings in Dallas.

Based in Radnor, Penn., PVR’s current natural gas assets include more than 4,400 miles of pipelines and seven processing systems in Texas, Oklahoma and Pennsylvania. The company also owns approximately 900 million tons of proven coal reserves in Northern and Central Appalachia and the Illinois and San Juan basins.

Riverstone Global Energy, Power Fund V and an investor-group led by Kayne Anderson Capital Advisors and Magnetar Capital have agreed to help finance the cash portion of the transaction in exchange for PVR stock. The Royal Bank of Canada has also agreed to loan PVR as much as $220 million.

The deal, expected to close in the second quarter, also calls for PVR to issue $200 million in new stock.

Vinson & Elkins represented PVR with a deal team that included New York partners Caroline Blitzer, Allan Reiss and Brenda Lenahan, M&A/capital markets; Michael McKay, finance; and Adorys Velazquez, capital markets; and associates Emily Malandra and John Johnston, capital markets; Christian Mathiesen, securities; and Drew Allen, private equity. In Houston were partners Ramey Layne, M&A/capital markets; and Timothy Devetski, tax; with associates Ryan Carney, tax; and Douglas Lionberger, capital markets. Environmental partner Casey Hopkins worked from Washington, D.C.

Chief turned to a Thompson & Knight team led by Dallas oil and gas partner Arthur Wright with New York oil and gas partner Gaye White. Also in Dallas were partners Wesley Williams and Jessica Hammons, corporate and securities; David Wheat and Shelly Youree, tax; Debra Villarreal, oil and gas; and Anthony Campiti, labor and employment; counsel Ron Fry, oil and gas; and associates Melissa Deal and Hillary Lyon, corporate and securities; and Sam Merrill, Brandon Bloom and Andrew Wootton, tax. Oil and gas associate Anna Irion worked from Houston.

Latham & Watkins advised Riverstone in the deal with a team that included New York partners Charles Carpenter and Eli Hunt, M&A; and Bruce Prager, antitrust; and associate Michael Shaheen, M&A. In Washington, D.C. were partners Cheryl Coe, tax; and Barton Clark, private equity finance; while tax partner Timothy Fenn and associate Victoria Louie advised from Houston.

Baker Botts is representing the Kayne Anderson and Magnetar-led group of investors. Finance partner Laura Tyson in Austin and tax partner Michael Bresson in Houston led Baker Botts’s team.

RBC Capital Markets, financial advisor to PVR, was represented by Kirkland & Ellis New York corporate partners Stephen Fraidin and William Sorabella.

Wachtell Advises AOL on $1.1 Billion Sale of Patents to Microsoft

AOL has agreed to sell more than 800 patents to Microsoft for $1.056 billion, the latest in a string of technology sector deals for intellectual property rights.

Microsoft has also been granted a non-exclusive license to the more than 300 patents AOL will retain in the deal. The companies have not said what the purchased patents cover, but bench mark analyst Clayton Moran told the Associated Press that they revolved around Internet technology, including advertising, search and mapping.

The deal follows other high-profile patent transactions, demonstrating the value technology companies are putting on portfolios that can be used to commence or ward-off lawsuits.

In July, a consortium that included Apple, Microsoft, Ericsson and Sony spent $4.5 billion to buy more than 6,000 patents from bankrupt telecommunications company Nortel (NYLJ, July 14, 2011). The following month, Google acquired Motorola Mobility for $12.5 billion, gaining access to more than 17,000 of the company’s patents (NYLJ, Aug. 18, 2011).

AOL’s deal with Microsoft is expected to close by the end of the year.

Wachtell, Lipton, Rosen & Katz advised AOL with a New York deal team led by corporate partners Martin Lipton, David Karp and David Shapiro, with partners Damian Didden, antitrust; and T. Eiko Stange, tax; associates Ronald Chen, Michael Rosenblat and Lisa Schwartz, corporate; and Nathaniel Asker, antitrust; and corporate law clerks Mark Stagliano and Zachary Podolsky.

AOL was also advised by a team from intellectual property firm Finnegan, Henderson, Farabow, Garrett & Dunner.

Covington & Burling represented Microsoft, with a team that included New York partner Robert Heller, tax; San Francisco partners Bruce Deming, corporate; and Evan Cox, intellectual property; and associates Ingrid Rechtin, Bradley Chernin, Paula Domingos and Andrew Hall, corporate. In Brussels was EU competition partner Miranda Cole, while tax associate Sarah Burnham worked from Washington, D.C.

Microsoft also was advised on antitrust matters by a Washington, D.C. team from Cadwalader, Wickersham & Taft, led by head of the firm’s antitrust practice Charles “Rick” Rule, with partner Jonathan Kanter, special counsel Amy Ray, and associates Ngoc Hulbig and Derek Moore.