Two King & Spalding-Atlanta partners, Donald S. Kohla and L. Wayne Pressgrove Jr., handled tax aspects of the $540 million sale of a natural gas storage facility in Louisiana.

King & Spalding represented Houston-based Haddington Ventures,  which has agreed to sell the Port Barre, La., assets and development project called Bobcat Gas Storage to Houston’s Spectra Energy Corp. Bobcat was developed by Port Barre Investments, which is owned by members of management, Haddington Energy Partners III, a private equity fund managed by Haddington Ventures, and GE Energy Financial Services, the energy investing unit of GE.

The Bobcat project began development in 2006, and entered commercial operation in late 2008. The facility has two underground salt caverns providing storage for about 19 billion cubic feet of gas. According to information on Bobcat’s website, natural gas is taken from pipelines, compressed and injected into the salt caverns, a type of storage facility which has been used nationwide for about 40 years. Gas is withdrawn by free-flow from the cavern back to the pipeline, without the need for compression.

Lead deal counsel was Houston partner John P. Crespo, in association with Houston partner Kenneth S. Culotta.  Lawyers from the firm’s Washington office also worked on the transaction.

The deal is expected to close by year-end, pending regulatory approvals.

King & Spalding partner Jack D. Capers Jr. landed client Eclipsys Corp., the Atlanta-based health care data technology company that last week announced plans for a $1.3 billion merger with Allscripts-Misys Healthcare Solutions Inc., because of a deal he closed a few years ago.

That deal, he said, was the sale of Alpharetta-based medical software provider Per-Se Technologies to health care company McKesson Corp., based in San Francisco, for more than $1 billion.

"Eclipsys is a new client," he said. "The CEO is Phil Pead, who was previously CEO of Per Se Technologies."

Thanks to the connection from that earlier deal, Capers, along with co-lead partner C. William Baxley and a team of 26 other lawyers from the firm's Atlanta, Washington, New York and London offices, began gearing up for the Eclipsys-Allscripts transaction about five months ago.

"We started working on the transaction in February, and it was pretty much full time, full speed ahead … to the announcement date [June 9]," Capers said.

Eclipsys offers software to hospitals and health systems, and Allscripts provides information systems for doctors' offices. The union, which Capers said is likely to close in four to six months, would facilitate patient information-sharing between those entities.

It's an all-stock deal, coming just 18 months after British company Misys bought a majority stake in Chicago-based Allscripts, Capers said.According to information from Bloomberg News, Misys paid $330 million for Allscripts in October 2008, and shares in the U.S. company have more than tripled in value since then.

"The world of electronic medical records has changed substantially in the last 18 months with the passage of health care reform and the stimulus money for hospitals and doctors to upgrade their electronic medical records," Capers said, referring to the approximately $30 billion in federal funding allocated for hospital and physician adoption of electronic health records under the American Recovery and Reinvestment Act. "Misys concluded there was an opportunity to generate significant return on this."

Capers said that the most unique feature of the transaction, in which Eclipsys stockholders will receive 1.2 shares of Allscripts for each share of Eclipsys—a 19 percent premium based on the June 8 closing price, according to the terms of the agreement—is a companion deal connected to the merger.

"Allscripts is currently 55 percent owned by Misys, which is a U.K. public company," he said. "Because of some London Stock Exchange rules, Misys was not going to be able to continue to own a major stake in Allscripts after the merger, so for the merger to go forward, Misys had to arrange to sell a substantial portion of its stake in Allscripts."

The London Stock Exchange, he explained, requires that a listed company control a majority by value of its assets. The merger with Eclipsys would have diluted that control such that Misys would have been in violation of the stock exchange's rules. Misys now plans to reduce its stake in Allscripts to 10 percent via an underwritten secondary offering of at least 36 million shares, and a share buyback. Allscripts will buy back about 24.4 million shares and pay a premium, for a total of $577.4 million, according to information from the companies.

"That added just an enormous layer of complexity to the deal," Capers said.

Before any of that can happen, all three companies must secure shareholder approval for, variously, the offerings and buyback. Capers' team is working on proxy materials now and expects shareholder votes in September or early October.

Also, Allscripts must land debt financing for the buyback. Capers said Allscripts already has some funding commitments. According to the company's merger announcement, it has financing commitments from J.P. Morgan, Barclays Capital and UBS for a total of $720 million in senior secured credit facilities.

"It's a complex transaction," he said. "I think the Eclipsys board feels comfortable that while there are conditions to the transaction, they are reasonable and achievable, and there's a high likelihood the transaction will close."

If it does, the combined company's client base will include more than 180,000 U.S. physicians, 1,500 hospitals and nearly 10,000 nursing homes, hospices, home care and other post-acute organizations.

Sidley Austin and Vedder Price represent Allscripts; Allen & Overy represents Misys.

King & Spalding lawyers have helped an affiliate of client GE Energy Financial Services close on a $150 million investment in a liquefied natural gas regasification terminal under construction in Pascagoula, Miss.

GE Energy Financial Services paid cash for its stake in Gulf LNG Holdings Group, which it purchased from Houston-based Crest Financial Limited, according to King & Spalding transactional partner Michael J. Egan. Crest was represented by attorneys from Locke Lord Bissell & Liddell's Houston office.

Gulf LNG is building the $1.1 billion liquefied natural gas terminal adjacent to the Bayou Casotte Ship Channel in the Port of Pascagoula, on the Gulf Coast. The facility, which is slated for completion in late 2011, is designed to receive, store and regasify imported LNG. According to information from GE Energy Financial Services, the project has 20-year service agreements with major oil and gas companies to supply LNG, and will connect to four transmission pipelines.

Egan said that because his client was buying into an existing project, the deal's challenges centered on "a very complex set of agreements relating to the financing and the various investors" in the complex, which is financed by a syndicate of lenders led by RBS Greenwich Capital.

"We really had to drill down into those documents and make sure GE understood the terms," he said. "There was no opportunity to recast or renegotiate those agreements relating to the financing of the venture. There are also some very important agreements relating to when the terminal is operational and commitments relating to the natural gas supply."

King & Spalding tax partner James H. Lokey Jr. said his team also had to assess the partnership agreement itself—GE Energy Financial Services bought 30 percent of the facility; El Paso Group, which is managing construction and will operate the facility, owns 50 percent; and the state oil company of Angola, Sonangol USA, owns 20 percent—and the tax basis increases and their effects on the purchase price. 

Other King & Spalding attorneys on the deal included Houston partner Daniel R. Rogers and Atlanta associates Robert J. Leclerc and Svetoslav S. Minkov.

King & Spalding lawyers represented an affiliate of client Roark Capital Group in its acquisition of Wingstop Restaurants Inc., a chain of chicken-wing eateries whose marketing materials say the company has sold more than 2 billion wings since its founding in 1994.

Roark, an Atlanta-based private equity firm that specializes in franchising, formed Wing Stop Holding Corp. to acquire the Richardson, Texas-based chain, which has 650 restaurants open or in development and posted more than $300 million in revenue in 2009. Terms of the deal were not disclosed.

A team of lawyers from several King & Spalding offices worked on the deal. The primary Atlanta partners were Raymond E. Baltz and William G. Roche on corporate matters, Les A. Oakes on environmental issues and Donald S. Kohla on tax matters.

Wingstop was represented by Countryman Law in Southborough, Mass. The acquirer's financial adviser was Cowen & Co.

Roark, which focuses on middle-market investments in companies that have revenues ranging from $20 million to $1 billion, also holds other restaurant brands in its portfolio, including Carvel, Cinnabon and Moe's Southwest Grill.

Earlier this year, King & Spalding represented Roark when it acquired a majority ownership interest in Marietta-based Peachtree Business Products.

No Atlanta outside counsel were in on the action when Mirant Corp. and RRI Energy decided to merge, according to an e-mail from Mirant’s general counsel, Julia Houston.

On Sunday, the companies announced their intent to unite in a $1.6 billion stock-swap, tax-free deal to create GenOn Energy.

Mirant, a Southern Co. spinoff which in the past has been represented for various reasons by lawyers from local firms including King & Spalding and Alston & Bird, chose Wachtell, Lipton, Rosen & Katz as its counsel. RRI, based in Houston, was represented by Skadden Arps Slate Meagher & Flom.

Represented by King & Spalding, Roark Capital Group, an Atlanta-based private equity firm, joined forces with another private equity shop, Philadelphia's Entrepreneur Partners, to acquire Marietta-based Peachtree Business Products.

Peachtree, represented by lawyers from Sutherland, is a direct marketer of specialty business products and marketing materials for residential property managers, parking facilities and other end markets. It will be combined with one of Entrepreneur's portfolio companies, AmeriFile, a St. Louis-based direct marketer of specialty business products to physicians, dentists and other health care practitioners. The combined company will be based in Marietta.

Roark specializes in business and consumer service companies with revenue between $20 million and $1 billion. Blank Rome represented Entrepreneur, which focuses on direct marketing companies with revenue between $15 million and $250 million.

GE Capital Corp. and Golub Capital have co-arranged a credit facility to support the acquisition.

Lawyers from King & Spalding's Texas outpost advised the Houston Astros Baseball Club when it established a new Latin American baseball academy and sports complex in the Guerra Region of Boca Chica, Dominican Republic.

William A. "Pete" Musgrove, Martin Lythgoe and Angelica G. Alfaro from King & Spalding's Houston office advised the Astros on a build-to-suit lease with D. & F. Sports Field Services SA, and a construction agreement with Equipos y Construcciones del Cibao SA. The firm also is advising the Astros on the drafting of several service agreements related to the complex.

The complex, which was completed March 1, has 2 1/2 playing fields, six pitching mounds, batting cages and an observation tower. The facility also includes a building with classrooms; dormitories; a dining room and industrial kitchen; weight, training and equipment rooms; offices for managers and coaches; a clubhouse and a laundry.

King & Spalding lawyers are helping Columbus, Ga.-based credit-card processor Total System Services Inc., or TSYS, charge up its bottom line in a $150.5 million joint venture with First National Bank of Omaha.

TSYS is buying 51 percent of First National Bank of Omaha’s merchant acquiring business, which, according to an 8-K filed with the Securities and Exchange Commission, the bank is expected to contribute via a series of structuring transactions to a newly formed Delaware limited liability company of First National Merchant Solutions.

King & Spalding Atlanta corporate partner John J. Kelley III, along with a team of attorneys from various offices, handled the deal. Kelley, through a spokesman, declined to comment. Other Atlanta lawyers on the deal include tax partner Donald P. Hensel, employment and benefits partner Susan Canter Reisner and intellectual property partner Scott W. Petty. First National Bank of Omaha, through a spokesman, declined to name its legal counsel.

The Omaha bank will retain a 49 percent ownership share and will contribute its acquisition business—which means it signs up merchants, providing them with point-of-sale equipment and processing their transactions—to TSYS’s existing third-party processing arm.

The deal, expected to close in April, also includes what amounts to a non-compete agreement. According to the 8-K, both parties have agreed, subject to some exceptions, not to acquire the equivalent of a financial interest in merchant customer contracts via U.S.-based businesses other than through the new Financial National Merchant Solutions entity.

In the 8-K, TSYS reported 2009 total revenue of $1.68 billion; the Omaha bank, which is a subsidiary of First National of Nebraska, reported that its merchant-processing division had $74 billion in sales last year, with net revenue of $93 million.

Lawyers from King & Spalding offices around the East Coast helped pharmacy benefits manager BioScrip Inc. put together a cash, stock and debt payoff deal valued at $343 million to purchase Critical Homecare Solutions.

Although most aspects of the deal were handled out of the firm’s New York office under the leadership of partner E. William Bates II—who practiced at K&S’s Atlanta office before decamping to the firm’s Big Apple outpost in 1993—local lawyers worked on tax, benefits and other parts of the transaction.

“From a tax standpoint, the primary consideration is making sure that the transaction qualifies as a tax-free reorganization,” said Atlanta tax partner Robert G. Woodward, explaining that shareholders must receive at least 40 percent of their compensation in stock; the rest can come from cash or warrants. “The key issue is compliance with what’s called the continuity of interest requirement, so that the stock that’s issued to the target company shareholders is not taxable to them, and the transaction doesn’t trigger a tax liability at the corporate level,” he said.

Elmsford, N.Y.-based BioScrip will pay $242 million—including $132 million to retire the company’s debt—and will issue $101.2 million in common stock, based on BioScrip’s Jan. 22 closing share price, according to information from the company. BioScrip also will issue more than 3 million warrants with a $10 exercise price and a five-year term to Critical Homecare shareholders.

Jefferies Finance provided $375 million in financing.

Atlanta partner Donald S. Kohla, who handled benefits issues, said the primary challenge for his team came from trying to figure out how Critical Homecare’s numerous acquisitions over the past few years had been integrated into the entity that BioScrip was purchasing. Another challenge, he said, was Critical Homecare’s workforce structure, which includes both regular and contract employees.

Critical Homecare is a Conshohocken, Pa.-based provider of home health care services whose controlling shareholder is Kohlberg & Co., a private equity firm that will hold about one-quarter of BioScrip’s common stock on a fully diluted basis.

Bryan Cave lawyers—though none from Atlanta—provided regulatory counsel for BioScrip, and Sonnenschein Nath & Rosenthal provided regulatory counsel for Critical Homecare. Lawyers from Paul, Weiss, Rifkind, Wharton & Garrison represented Kohlberg in the deal.

The deal, which is subject to regulatory approval, is expected to close by March 31.

Crawford Communications Inc. has inked the first-ever sale of one of its divisions in a deal likely worth more than $100 million.

Los Angeles-based media services company Broadcast Facilities Inc. acquired Crawford’s Satellite Services Division, which includes television network origination, teleport, satellite uplink trucks, Internet, production services and media services to government clients in late January.

Crawford, an Atlanta-based company founded by Jesse Crawford in 1984, was represented by King & Spalding partners John J. Kelley III and Rahul Patel. Neither returned calls seeking comment. Broadcast Facilities was represented by attorneys from Latham & Watkins.

Terms of the deal were not disclosed. But in a Form D Notice of Exempt Offering of Securities that is part of an 8-K that Broadcast Facilities filed with the Securities and Exchange Commission, the company indicated that it was issuing $128 million in securities in connection with a business combination “such as a merger [or] acquisition” and as “additional consideration for the extension of credit.”

Ellis Jones, CEO of Wasserstein & Co., the private equity firm which owns Broadcast Facilities, said in a statement that financing came from Tennenbaum Capital Partners.

William Sherman, managing director of VRA Partners, an Atlanta-based investment bank which advised Crawford on the deal, said, “I think there was a strong rationale for this transaction because of the benefits available to Broadcast Facilities in combination with the satellite services division of Crawford. It gave them additional capability … and their first East Coast property.”

The combined company’s client base includes ABC, NBC Universal, DIRECTV Sports Networks, Hallmark, NFL Network, ESPN, NASCAR Media Group and government entities such as the U.S. Department of Defense, NASA and the CDC.