Evercore Partners Inc. (EVR) is winning mandates on the year’s biggest oil and gas deals after being virtually nowhere in the industry as recently as two years ago.
The latest assignment, announced today, is Evercore’s role advising Houston pipeline operator Plains All American Pipeline LP (PAA) on a $1 billion unsolicited offer for SemGroup Corp. (SEMG) Last week, Evercore worked with Kinder Morgan Inc. on a $21 billion agreement to buy El Paso Corp. (EP), a transaction that on its own catapulted Evercore to fourth place among advisers on oil and gas mergers this year, according to a Bloomberg ranking.
“Energy has been a targeted industry, and they’ve made efforts to build there,” said Devin Ryan, an analyst at Sandler O’Neill & Partners LP in New York. “Those efforts are paying off.”
Co-founded by former deputy Treasury secretary Roger Altman in 1996, Evercore focuses on merger and restructuring advice and equities. It didn’t have a focused oil and gas advisory effort until 2009, when it hired Robert Pacha from Bank of America Corp. to set up a Houston office.
Before the start of 2010, Evercore completed only 5 deals involving an oil and gas company target, and none of them were more than $300 million, Bloomberg data show.
This year, Evercore added Raymond Strong from Goldman Sachs Group Inc. (GS) in New York, and three more senior bankers in Houston: Shaun Finnie and Lance Dardis from Bank of Nova Scotia, and Tim Carlson from JPMorgan Chase & Co.
Some of those bankers are advising pipeline operator Southern Union Co. (SUG) on its pending $5.7 billion sale to Energy Transfer Equity LP. This year Evercore bankers also advised directors of Exco Resources Inc. on their rejection of a $4 billion buyout offer from Chief Executive Officer Douglas H. Miller.
Takeovers of companies in the oil and gas sector totaled $297 billion last year, the largest volume on record, and are on pace to surpass $250 billion this year in what would be the second largest yearly total, according to data compiled by Bloomberg. Increased demand from Asia for natural resources is setting off a race for assets around the world, while in the U.S. companies are making acquisitions to take part in a boom in oil and gas production from shale rock formations.
Evercore and Barclays Plc (BARC) are jointly advising Kinder Morgan on an effort to sell El Paso’s oil and gas exploration and production assets, people with knowledge of the matter said last week, a divestiture that may fetch $7 billion or more.
Evercore isn’t the only investment bank without a lending arm to make a push in the oil and gas industry. Greenhill & Co. also opened a Houston office in 2009, and Greenhill bankers are advising Superior Energy Services Inc. on its proposed $2.6 billion takeover of Complete Production Services Inc.
Moelis & Co., the New York-based investment bank, opened its own Houston office this year, and Tudor Pickering Holt & Co., a four-year-old Houston firm that focuses on the energy sector, has been hiring from bigger rivals including Goldman Sachs.
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