Dealmakers: Albert Diaz-Silveira and Colleen Grady
The Deal: Diaz-Silveira and Grady negotiated the $168 million purchase by auction of one of the largest natural gas processing facilities in the Western Hemisphere for a consortium of Trinidad and Tobago government entities.
Details: Three Trinidad and Tobago government agencies—the National Insurance board of Trinidad and Tobago, National enterprises Limited, and Trinidad and Tobago Unit Trust corp.—joined forces to acquire Pan West Engineers & Constructors LLC, based in Weimar, Texas, and owned by General Electric capital corp.
However, their actual target was a subsidiary based on the Caribbean island, Phoenix Park Gas Processors Ltd., Diaz-Silveira said.
Pan West held a 10 percent interest in Phoenix Park and National enterprises Ltd. also held a 10 percent interest. The remaining 80 percent was owned by National Gas Co. of Trinidad and Tobago, so with the acquisition, the government would have 100 percent control through one agency or another, Diaz-Silveira said.
The Alvarez Arrieta & Diaz-Silveira firm in miami had prior experience with mergers and acquisitions on the island, as well as elsewhere in the caribbean and Latin America. The firm came aboard in early August at the preliminary bid stage when the consortium delivered its indication of interest letter, he said.
The consortium knew the target acquisition very well, but had concerns about the holding company, Diaz-Silveira noted. Part of his role was to help the consortium in its due diligence to better understand what Pan West was and what possible liabilities it may contain.
“We got comfortable with the broad and encompassing representations we were able to extract from GE. There was nothing in the due diligence that gave us pause for concern,” Diaz-Silveira said.
The bid process was closed, which meant the consortium could only speculate about its competitors. In fact, they never knew if they were bidding against anyone.
“It’s kind of fun-scary. You may be bidding against yourself. We think there were two others, but we don’t know what their financial bids looked like,” he said.
The consortium could have been the lowest bidder but still got selected because its bid involved no financing, he said.
“Our client had certain advantages. It was government-owned. There was no financing involved, which gave GE certainty of closure, and the client knew the asset,” he said.
Once GE selected the consortium, the parties entered into negotiations for a purchase agreement. The consortium requested exclusivity during the purchase agreement negotiations phase, so that GE could not continue looking for an alternate buyer.
GE did not want to grant much time and allowed for two weeks, he said.
“We did need to request an extension, but by that time we were well down the path,” he said.
Negotiations were completed in three weeks and the transaction closed Nov. 19.
GE’s financial adviser was citibank Global markets Inc., and its legal counsel was Sherman & Sterling.
Diaz-Silveira also relied on Kurt miller of Fitzwilliam Stone Furness-Smith & morgan, the Trinidad and Tobago-based local counsel for the consortium.
Quote: “They don’t celebrate Thanksgiving in Trinidad and Tobago, but certainly the banks do. everyone wanted to close before the next dividend was paid. It was due early december. From our client’s perspective, that was the real deadline,” Diaz-Silveira said.
Background: Diaz-Silveira, a firm partner, does international business transactions, mergers and acquisitions, joint ventures, private equity, privatizations, and strategic partnership agreements. Prior to founding Alvarez Arrieta & Diaz-Silveira, he was counsel with the international law firm of White & Case.
Colleen Grady, an associate, works with international and domestic business transactions, mergers and acquisitions, joint ventures, private equity investments and general corporate matters.