Overview
Companies in the power and utilities sector operate in a complex environment. Not only are they subject to expansive regulation at the federal, state and local level, but they need to be responsive to stakeholders’ concerns regarding public interest, including with respect to cleaner energy production, increased demand for more renewable resources and shifting climate change policies. They also need access to capital to address the ever-increasing investments necessary to meet operational, regulatory and stakeholder requirements. M&A transactions in this sector are often carefully structured to address the foregoing factors, and against this backdrop, our highly experienced team helps clients understand and navigate the issues that frequently arise in these transactions.
Our team’s experience allows us to work closely with our clients’ deal teams on all phases of the transaction, including bidding strategies, transaction structures, due diligence, environmental, regulatory and tax concerns and transaction execution. We are also well-positioned to advise on the numerous legal issues that may arise in these types of transactions as our M&A lawyers leverage the substantial experience of their colleagues across the Firm, such as those in regulatory, tax, employee benefits, labor, environmental, real estate, finance, intellectual property, technology, competition and antitrust, in our full complement of transaction practices.
From our offices around the world, we advise a broad array of market participants in this sector, including infrastructure funds, private equity funds, utilities, independent power producers, project developers and lenders, on all types of M&A transactions, from acquisitions and dispositions to joint ventures, restructurings and both majority and minority equity investments.
Our M&A capabilities span the full power and utility spectrum, including transactions involving:
- Electric, gas and water utilities
- Electric transmission assets
- Conventional generation (single asset and portfolio interests), including coal, oil and gas, contracted and merchant, and jointly owned generation assets
- Renewable generation, including wind, solar, storage and hydro
- Retail energy providers and marketing businesses
- District energy systems and co-generation assets
- Commodities trading houses.
Our broader energy practice complements our power and utility M&A work. We leverage our skill and experience in related practices, such as oil and gas, renewable energy, project finance and development and commodities and trading, to support our review of the underlying commercial arrangements that are at the core of many M&A transactions. We also draw on a combination of business, regulatory and legal knowledge gleaned from prior work in government and private sector roles to advise on the tax, regulatory, finance and environmental laws associated with the operation of these businesses and facilities.
Related Practice Areas
We have significant experience representing clients in M&A transactions that involve retail energy providers and have the background to advise on any concerns that arise in other transactions within this sector. Because of the nature of these businesses, issues relating to working capital, hedging and regulatory matters often surface and can be key from a valuation perspective. Our experience with these issues allows us to help clients successfully navigate these transactions.
Regulatory
McDermott’s highly skilled legal counsel can help you overcome complex regulatory challenges, secure waivers and approvals, advocate for more favorable market rules and take advantage of programs and initiatives that support your strategic goals. Our Chambers-ranked energy regulatory, markets & reliability team is known as a go-to practice for independent power producers and works extensively with power marketers, renewables developers, natural gas utilities and other energy industry participants. We make it our priority to help you achieve your goals and minimize risk by ensuring compliance with the regulations and requirements that arise from these and related laws.
Tax and Tax Equity
McDermott is a leading firm for tax equity financings and a large part of our practice is comprised of tax equity and other financing structures. We also have a team of tax lawyers who focus exclusively on energy matters. We have extensive experience advising sponsors and investors on tax equity structures, including all types of technologies, and utilizing partnership flip structures, leverage leasing, single-investor leases and inverted leases. Our experience also spans the spectrum of renewable energy technologies, as well as other energy sources like coal-fired, gas-fired, LNG and nuclear.
Project Development and Offtake
Our lawyers advise on the full range of offtake arrangements with public utilities, power marketers, energy company sponsors, financial institutions, wind companies, commodity traders, and dealers and on hedge trading, contracting, tax and derivatives matters. We have broad experience in all types of offtake structures, including power purchase agreements with utilities and C&I offtakers, insurance-driven contracts (like proxy revenue swaps and other proxy products), revenue puts and shaping and firming agreements.
Multidisciplinary Service
Project Finance
Our lawyers have first-hand experience with the latest innovations for structuring equity and debt capital and mitigating project risks. We handle every stage of an infrastructure project, from the bidding and pre-development stage to project development, financing, ownership, operation and asset management. We can also assist with acquisitions, refurbishment and the repowering of existing infrastructure assets. Additionally, our practice covers the spectrum of financing structures, including traditional project finance, borrowing base credit facilities, sale-leasebacks and other lease structures.
Asset Restructuring
To give you an edge in acquiring troubled energy assets, our energy team collaborates closely with our highly regarded restructuring group, staying ahead of industry trends and financial market signals to help you identify strategic opportunities and avoid business interruptions. We can also provide guidance if you are facing bankruptcy, out-of-court reorganizations or workouts, including the separation/spin-off, acquisition or disposition of distressed assets and operations. We have also pursued the interests of debtors, secured and unsecured creditors, directors, equity holders, operators and other parties in numerous energy-related administrative, bankruptcy and judicial proceedings.
Cross-Border Transactions
Our lawyers advise on negotiated and unsolicited acquisitions in a wide variety of contexts, including competitive auctions, exclusive negotiations, tax-driven transactions and cross-border deals. And after decades of representing a diverse client base that includes publicly listed companies, multinational corporations, privately held and family-owned businesses, private equity, family offices, investment banks and institutional investors, we can quickly identify and anticipate different deal perspectives to ensure the proper M&A strategy is deployed.
Whether you’re working on a deal in the United States or abroad, we can represent your transactional needs globally regardless of jurisdiction. Moreover, we possess deep industry knowledge in key markets, including energy, telecommunications, media and technology, chemicals, aerospace and defense, mining and metals, life sciences, food and beverage
