Bloomberg News

Lufkin Vaults Simmons Into Top 10 Advising on Energy M&A

April 09, 2013

Simmons & Co., the Houston advisory boutique founded in 1974, has slipped into the spotlight with roles on two of the biggest oil and industrial deals this year.

The firm advised Texas oil pump maker Lufkin Industries Inc. (LUFK:US) on its $3.3 billion sale to General Electric Co., announced yesterday. Simmons, alongside UBS AG, advised private-equity firm KKR & Co. on its $3.7 billion offer last month for industrial-equipment maker Gardner Denver Inc. (GDI:US)

The Lufkin deal helped Simmons crack the top 10 in advising on energy mergers & acquisitions this year, compared with 30th in 2012, according to data compiled by Bloomberg. That and the Gardner Denver transaction are Simmons’s largest since 2007, when the firm won a role on Transocean Ltd.’s $17 billion purchase of GlobalSantaFe Corp., data show.

Simmons, run by Chief Executive Officer Mike Frazier, has now worked on more than $7 billion in deals this year, eclipsing 2012’s more than $5 billion. The firm, which specializes in oil and gas services transactions, was founded almost 40 years ago by Matthew Simmons, a well-known advocate of the “peak oil” theory that posits the earth is running out of the fuel. He died at 67 in an accidental drowning in 2010.

CEO Frazier declined to comment on this article through Libby Covington, a spokeswoman for Simmons.

Evercore Partners Inc., another boutique advisory firm, currently holds the top spot in advising on energy M&A this year with $11.8 billion in transactions, bolstered by the $2.4 billion takeover of Berry Petroleum Co. by Linn Energy LLC, according to data compiled by Bloomberg. The biggest deal so far this year in the energy sector is Royal Dutch Shell Plc’s agreement in February to buy liquefied natural gas assets from Repsol SA for $4.4 billion.

Historical M&A

The strongest year for energy M&A was 2011, led by Kinder Morgan Inc.’s October agreement to buy El Paso Corp. for $21.1 billion. There have been more than $60 billion in global energy deals so far this year, a more than 20 percent decline from the same period a year earlier, data compiled by Bloomberg show. In the industrial sector, there have been more than $90 billion in transactions in 2013.

Global M&A stumbled last quarter as transactions slowed in March, data compiled by Bloomberg showed. Deals shrank to $485.5 billion, a 32 percent decline from the year-earlier period, as the proposed takeovers of icons such as Dell Inc. and H.J. Heinz Co. failed to spark a rally.

To contact the reporter on this story: Matthew Monks in New York at mmonks1@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net


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