Kirkland & Ellis, which opened an office in Houston in 2014, did the most Texas M&A work in 2017, and Vinson & Elkins was the leading homegrown Texas firm for 2017 M&A in the Lone Star State, according to data provided by Mergermarket.
Kirkland & Ellis led two rankings of firms for Texas M&A in 2017. Kirkland topped the list of firms ranked by value of deals, with $83 billion, and also topped the list of firms ranked by number of deals, with 80. V&E was fifth among the firms for value, with a total value of $50 billion, and second for number of deals, with 68.
The number of M&A deals in Texas increased incrementally in 2017 compared with 2016, but the total value of those deals declined by 42.5 percent for the year compared with the previous year. In Texas, 986 deals involving a Texas target, bidder or seller, totaling $269.7 billion, were announced in 2017. That compares with 966 Texas deals valued at $469.3 billion the previous year, according to Mergermarket.
Most of the 20 firms ranked by value are not headquartered in Texas, although several have offices in Texas. In addition to V&E, Akin Gump Strauss Hauer & Feld and Bracewell are the Texas firms on the value ranking chart.
More Texas firms are on the chart that ranks firms by the number of deals, presumably because the statistics include Texas M&A transactions as small as $5 million and would include firms with more work for midsize companies. Following V&E on that chart are a number of Texas firms—Locke Lord, Andrews Kurth Kenyon, Baker Botts, Haynes and Boone, Akin Gump, Jackson Walker and Bracewell.
Latham & Watkins, which opened its Houston office in 2010, is third on both charts, and White & Case, which does not have a Texas office but worked on two of the largest Texas deals announced in 2017, is second on the chart that ranks firms by value of deals.
Andrew Calder, a partner in Kirkland’s Houston office who is a member of the firm’s global management committee, said it’s not surprising that his firm topped the Texas M&A deals charts in 2017.
“We were incredibly busy last year. We have been very fortunate to build a very deep bench of talented partners,” said Calder, who added that 70 or 80 of the 130 lawyers in the firm’s Houston office are focused on M&A work.
He said the deal flow in Houston was strong in 2017, particularly in the energy sector, but also in other industries such as petrochemical and retail.
Keith Fullenweider, a partner in Houston who is head of the firm’s corporate department, said his firm is consistently near the top of the Texas M&A rankings because it has many energy industry clients and strong relationships with private equity companies.
He said it is significant that V&E is ranked second for number of deals. Generally speaking, he said, a high volume of deals is better for a firm than a handful of large M&A transactions. “You would rather have 20 midsize deals than one massive deal,” he said.
He said while the work involves Texas companies, the lawyers working on it may not necessarily be in Texas.
Fullenweider said out-of-state firms continue to put pressure on Texas-based firms, by poaching lawyers from the firms and going after clients, because the Texas market for transactional work is “as good as any legal market in the country other than New York.” However, the influx of firms opening offices in Texas has made Texas firms more disciplined, he said.
According to Mergermarket, the biggest acquisition announced in 2017 and involving a Texas company is Sempra Energy’s planned $9.45 billion acquisition of Dallas-based Energy Future Holdings Corp. Kirkland is advising EFH on the transaction, while San Diego-based Sempra turned to White & Case for the transaction which is expected to close this year.
The second largest deal announced in 2017 was Calpine Corp.’s pending acquisition by an investor group led by Energy Capital Partners. White & Case represents Houston-based Calpine, while the investor group turned to Latham for the $5.6 billion deal.
The energy, mining and utilities sector accounted for 66.5 percent of the Texas M&A deals in the report, with consumer deals accounting for 12.3 percent. The Texas data was part of Mergermarket’s 2017 Global M&A Trend Report.