At first blush, the transaction sounds routine: Houston lawyer Shelton Vaughan is hired to help longtime client Quanta Services Inc. of Houston negotiate a definitive agreement to sell its telecommunications subsidiaries to Florida’s Dycom Industries Inc.
But Vaughan, a partner in Duane Morris in Houston, says the acquisition turned out to be complicated, because the deal team had to carve out Quanta’s telecom business from its other operations. He says the transaction required the lawyers to do some intercompany restructuring. “The further you get into it, you realize companies [subsidiaries] are involved in each other in ways you don’t think about,” he says in describing the challenge of separating the telecom business from Quanta’s other businesses.
As described in a press release about the deal, Quanta is a contracting services company for the electric power, natural gas and pipeline industries. One line of business is fiber optic telecom infrastructure and related design, procurement, construction and maintenance services.
Vaughan also notes that Quanta and Dycom are competitors, so “we had to be careful to observe the antitrust formalities and not run afoul of them.”
On Nov. 19, Quanta announced it would sell substantially all of its domestic telecom infrastructure services operations to Dycom, of Palm Beach Gardens, Fla., for about $275 million in cash, subject to final adjustments. The deal is expected to close by Dec. 31, subject to customary conditions. The required waiting period under the Hart-Scott-Rodino Act has expired. Vaughan says Quanta, a client for about 10 years, previously hired him for M&A work and financings.
He says Brett Schrader, acting general counsel at Quanta, was a key player in negotiating the agreement. “This would not have gotten done without Brett’s hard work,” Vaughan says. Schrader did not return a telephone message seeking comment.
In addition to Vaughan, the Duane Morris team includes partner Joel Ephross and associates T. John Lin and Wesley Yuan in Houston; partners John Neclerio, Nicole McLaughlin, Stephen DiBonaventura, John Reade, W. Michael Gradisek, Seth Cooley and Edward Biester and associate Jarred Gunther in Philadelphia; counsel Steven Levitsky and associates Rose Ertze and Benjamin Haverstick in New York City; partner Thomas Redekopp and associate Dustin Hawks in Boston; associate David Kahn in Miami, and associate F. Reid Avett in Washington, D.C.
At Dycom, Richard Vilsoet, secretary, VP and GC, and Mark Liberman, assistant general GC, turned to a team from Shearman & Sterling.
The Shearman team includes M&A partner Stephen Besen and executive compensation and employee benefits partner John Cannon, both of New York, and tax partner Don Lonczak of Washington, D.C. Others in New York are intellectual property transactions associates Jordan Altman and Alykhan Kurji; corporate associates Diana Berisha and Brittany Jackson, M&A associates Michael Dockery, Richard Fischetti and Grace Lee; and executive compensation and employee benefits associates Jennifer Stadler and Molly Stark. Also, tax associate Nathan Tasso of Washington, D.C., is working on the deal.
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