Five Firms Advise on $3.5 Billion Consol Coal Mine Deal
Consol Energy said Monday it has reached an agreement to sell five of its coal mining operations in West Virginia to Murray Energy in a deal worth roughly $3.5 billion—a total that includes cash, assumed debt and future considerations.
In announcing the transaction, Canonsburg, Pa.–based Consol—the country's largest producer of coal extracted from underground mines—said the sale fits into its plan to focus more closely on its natural gas operations. That plan calls for Consol to boost its natural gas production capacity by 30 percent a year in both 2015 and 2016, according to the company's deal announcement.
The mines in questions—which produced 28.5 million tons of thermal coal last year—are spread across West Virginia and represent all of Consol's longwall coal operations in the state. As part of the deal, Murray will also acquire river and dock operations from Consol that include a fleet of 21 towboats and 600 barges used to transport coal and other commodities along the Ohio River.
Murray—which is based in Saint Clairsville, Ohio—has agreed to pay Consol $850 million in cash upfront for the mines and has pledged another $184 million in future payments. Murray has also agreed to assume $2.4 billion in Consol debt. The deal is expected to close by the end of the year, pending regulatory approval.
Kirkland & Ellis is representing Murray in connection with the acquisition. New York–based corporate partner William Sorabella is leading the Kirkland team, which also includes corporate partner Daniel Michaels, debt finance partner Ashley Gregory and capital markets partner Christian Nagler. Kirkland associates Dylan Hanson and Adi Herman are also working on the matter. Michael McKown is Murray's general counsel.
Kirkland has advised Murray in the past on various financing transactions, including a $350 million senior secured notes offering in May.
Consol, meanwhile, is being advised by attorneys at Greenberg Traurig; Wachtell, Lipton, Rosen & Katz; West Virginia-based Steptoe & Johnson; and Buchanan Ingersoll & Rooney.
The Greenberg Traurig team serving as Consol's lead counsel is led by Philadelphia-based corporate and securities shareholder David Gitlin and labor and employment shareholder Robert Goldich. Corporate and securities shareholder Frank Adams, business reorganization and financial restructuring shareholder Maria DiConza, energy shareholder William Garner and corporate and securities of counsel Ephraim Schmeidler are also advising on the deal, along with tax shareholders Robert Simon, Thomas West Jr., Ian Herbert and Marvin Kirsner. The Greenberg Traurig associates working on the matter are Jillian Bunyan, Greg Cox, Avi Fox, Aileen Kim, Dewayne Nichols, Rebecca Rosenthal, Godric Shoesmith, Adam Silverman, Lewis Snyder, Paul Stephan, Nina Varughese and Nikki Wise.
Corporate partner David Katz is leading the Wachtell team providing counsel to Consol. Antitrust partner Joseph Larson, executive compensation and benefits partner Adam Shapiro, restructuring and finance partner Eric Rosof, tax partner Deborah Paul and associate Nathaniel Asker are also working on the matter for Wachtell.
Wachtell advised Consol when the company acquired Dominion Resources' Appalachian natural gas and oil exploration and production unit for $3.48 billion in 2010. Consol turned to Wachtell again the following year—along with attorneys from Vinson & Elkins—when it sold a 50 percent stake in its Marcellus Shale holdings in Pennsylvania and West Virginia to Noble Energy for $3.4 billion.
Buchanan Ingersoll is fielding a Pittsburgh-based team that includes corporate shareholders Lewis Davis Jr., Brian Novosel and Hannah Frank. (Consol's chief legal officer, Stephen Johnson, is a former Buchanan Ingersoll shareholder and a former Reed Smith partner.)
A spokesman for Steptoe & Johnson—a distinct entity from the Am Law 100 firm of the same name that it spawned—was not immediately able to provide The Am Law Daily with the names of the firm lawyers working on the transaction.