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Mergers & Acquisitions

Best of the Middle Market: Energy & Industrials

By Deal Staff
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Published: June 22nd, 2020

This week we take a look at the nominees in the energy and industrials category for our Middle Market Awards. 

To understand these nominees we rewind to 2018 and 2019 and $40-plus-per-barrel oil among other factors that have since changed drastically. 

Of course, oil M&A still wasn’t booming like the 2010s, and we notched very little exits in the space for PE, especially in the middle market. Instead, attention was spent on natural gas as well as specialty chemicals, building products and internet of things investments that took much of the heavy industry spotlight.

Exemplary deals in these sectors showed an ability to gain scale and expertise while either doubling down on existing, profitable divisions or diversifying into new and growing verticals. Advisers showed an ability to navigate complex, accretive transactions that either set the bar for excellence in their respective industries. These dealmakers helped investors navigate processes in a profitable and timely manner for sellers and/or gave buyers a foray in new growth or profitability with their new holdings.

Much like every industry amid the recent coronavirus pandemic, the energy and industrial industries have been strained, but we take this unique lull in change-of-control deal volumes to celebrate the dealmakers behind some of the most influential and exemplary deals of 2019 in the space.

For more on the awards, or to have your firm profiled as part of the series, please contact Jenney.Smith@thedeal.com or check out the shortlist for more information.

Featured dealmakers in Energy and Industrials

Michael Piazza

As a nominee for Energy & Industrials Dealmaker of the Year for The Deal’s Middle Market Awards, Willkie’s Michael Piazza, co-head of the firm’s energy practice in Houston, had an exemplary 2019.
Full Profile

Jay Hughes

Jay Hughes, a nominee for Energy & Industrials Dealmaker of the Year for The Deal’s Middle Market Awards, recently joined Willkie Farr as a partner in the firm’s Houston office after a stellar 2019.
Full Profile

Featured Firm in Energy and Industrials:

Read more about Willkie

More info

Featured Deals in the Middle Market 

*Energy & Industrials Finalists*

American RailGreenbrier acquires the manufacturing business of American Railcar
Target/Seller:
American Railcar Industries Inc. – Manufacturing business/ITE Management LP
Investment Adviser:
Deutsche Bank AG
Outside Counsel:
Willkie Farr & Gallagher LLP
Acquirer: Greenbrier Cos.
Investment Adviser:
Bank of America Merrill Lynch
Goldman, Sachs & Co.
Counsel to I-bank:
Sullivan & Cromwell LLP
Outside Counsel:
Paul Hastings LLP
Davis Polk & Wardwell LLP
Description: When you don’t get what you want the first time, try again. That at least seemed to be the motto Lake Oswego, Ore.-based Greenbrier Cos., which after a failed effort to acquire competitor American Railcar Industries Inc. in 2013 came back six years later to carve out its consolation prize in the form of the target’s manufacturing business. The deal was announced April 18, 2019 for $430 million. The buyer will pick up two railcar manufacturing facilities in Arkansas through the deal and five other operations that supply a variety of railcar components and parts. For American Railcar, the deal came shortly after it was acquired by a fund managed by ITE Management LP, in a deal that valued the company at $1.75 billion.
Deal Memo
Awards Information

Bal SealKaman acquires Bal Seal Engineering
Target/Sellers: CoreVest American Finance Lender LLC/
CoreVest Management Partners LLC and Fortress Investment Group LLC
Investment Adviser:
Piper Jaffray & Co.
Outside Counsel:
Dechert LLP
Sidley Austin LLP
Acquirer: Redwood Trust Inc.
Investment Adviser:
JMP Securities LLC
Counsel to I-bank:
McGuireWoods LLP
Outside Counsel:
Mayer Brown LLP
Description: On Nov. 5, Kaman Corp. agreed to pay $330 million to acquire Bal Seal Engineering Inc., a Foothill Ranch Calif-based, family owned business. The deal came after an auction for the business, which produces custom-engineered sealing, connecting, conducting and shielding solutions for manufacturers. The deal, which closed Jan. 3, bolstered its position in the aerospace components supply space and extended it into new end markets in the medical tech and industrial sectors. Neal J. Keating, Chairman, President and CEO of Kaman touted the acquisition at the time for “expanding the breadth of our product offering, increasing our exposure to attractive high growth markets, and driving meaningful near-term margin and cash flow accretion.”
Deal Memo
Awards Information


Huntsman adds FFL Partners-backed Icynene-Lapolla
Target/Seller:
Icynene-Lapolla/FFL Partners LLC
Investment Adviser:
Lazard Ltd.
Outside Counsel:
Willkie Farr & Gallagher LLP
Acquirer: Huntsman Corp.
Outside Counsel:
Kirkland & Ellis LLP
Description: Facing a potential identity crisis in the wake of a failed $20 billion merger with Swiss rival Clariant AG, Huntsman decided in late 2017 the best path forward was to return to what it does best, bolt-on acquisitions. One of the company’s most notable deals was its December agreement to acquire Icynene-Lapolla off the hands of middle market firm FFL Partners. The target sits at the intersection of two rapidly consolidating industries: building products and specialty materials. The move has spurred several sponsors to launch spray foam platforms with the hopes of flipping it to strategics in either the specialty chemicals and materials or the construction industries.
Deal Memo
Awards Information

MacquarieNew Jersey Resources acquires Leaf River Energy from Macquarie
Target/Seller: Leaf River Energy Center LLC/Macquarie Infrastructure and Real Assets Inc.
Investment Adviser:
Wells Fargo Securities LLC
Outside Counsel:
Sidley Austin LLP
Acquirers:
New Jersey Resources Corp./NJR Midstream Holdings Corp.
Outside Counsel:
Locke Lord LLP
Description: Macquarie Asset Management Inc.’s Macquarie Infrastructure and Real Assets Inc. recognized a hot period in the natural gas storage market and capitalized. The firm announced on Sept. 5 it had sold Leaf River Energy Center LLC, a salt dome operator in the Southeast, to natural gas supplier New Jersey Resources Corp. subsidiary NJR Midstream Holdings Corp. The sale came in above expected price tags placed on the asset in early reports and followed an eight-year hold for the patient Macquarie infra fund. For the buyer, it allowed New Jersey Resources, which distributes natural gas to residential and wholesale customers, to bring more of its natural gas storage capacity in house, as well as expand into the southeast region.
Deal Memo
Awards Information

Ring Energy acquires Wishbone Energy from Quantum Energy Partners
Target/Seller:
Wishbone Energy LLC/Quantum Energy Partners LP
Investment Adviser:
CIBC Griffis & Small
BMO Capital Markets Corp.
Outside Counsel:
Vinson & Elkins LLP
Acquirer: Ring Energy Inc.
Investment Adviser:
SunTrust Robinson Humphrey Inc.
Outside Counsel:
Baker & Hostetler LLP
Description: In the only middle market acquisition of a private oil and gas producer by a public company outside of bankruptcy in 2019, and one of the few private equity exits of a private oil and gas producer of any size during the period, Quantum Energy Partners LP secured an exit for Wishbone Energy LLC in February with the $291 million sale to Ring Energy. Ring Energy, which specializes in Texas and New Mexico’s Central Basin Platform, added depth of inventory with Wishbone, which Quantum backed in 2013. Quantum may have waited several years to exit Wishbone, but did so at a price tag higher than the majority of Central Basin deals in recent memory.
Deal Memo
Awards Information

Nominees for other energy and industrials categories including investment bank, law firm and dealmaker can be found here.

To have your firm profiled as part of the series, please contact Jenney.Smith@thedeal.com or check out the shortlist for more information.

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