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The bank lending practice at Simpson Thacher is the envy of many in the industry, and recent strategic moves have expanded its capabilities and solidified its tier one status. In April 2011, the firm announced the opening of a Houston office and the hiring of Robert Rabalais as a partner there. Rabalais brings to the firm broad experience in bank lending and in the representation of institutional investors, borrowers and issuers, mezzanine lenders and others with an interest in acquisition financings for oil and gas production. Though the Wall Street firms generally still have a learning curve when it comes to oil and gas, the dominance in this space of regional firms (i.e. Baker Botts or Vinson & Elkins) may be slipping away.

In a separate development, Simpson Thacher promoted attorney Alexandra Kaplan to the status of partner effective January 1 2012. Kaplan brings to the practice highly specialised knowledge of syndicated loan financings, asset-based and senior credit facilities, subordinated bridge loans, exit financings and debtor-in-possession facilities.

Clients of this practice include, on the borrower side, Arch Coal, The Blackstone Group, The Carlyle Group, MasterCard, Microsoft,and First Reserve Corporation; while on the lender side, Barclays Capital, Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs, JPMorgan and Morgan Stanley have all mandated the firm.

According to a client, "The lawyers in this practice I work with most are Patrick Ryan and Art Robinson – Patrick on the loan side, Art on the capital markets side. I think they are among the best that we deal with. It's their perspective, their knowledge, the experience that they're able to draw on. What makes a good lawyer great is the ability to balance legal and commercial issues – what protects the bank and investors with what is commercially reasonable from an issuer's perspective."

Another client says, "I've been working with Simpson Thacher for many years, across disciplines. I think they are the best law firm I've ever worked with, hands down. They understand what points are important, they can say to the client, 'Here are the five things we need to talk about. I'm not going to drag you through everything.' They are very commercial, they get the big picture and they know how to get a deal done while protecting you."

Deals
Partners Brian Steinhardt in New York and Robert Rabalais in Houston represented affiliates of Kohlberg Kravis Roberts (KKR), Natural Gas Partners, Crestview Partners and Itochu Corporation in financing arrangements related to their acquisition of Samson Investment Company for $7.2 billion. This is a prime example of the kind of deal in which Simpson Thacher's Houston office will be instrumental. Samson owns interests in 10,000 wells, operating 4,000 wells in the United States and its acquisition marks a transformative inroad into the oil sector by the private equity firms involved. The deal was announced in November 2011. In a separate deal for KKR, a team led by partner James Cross in New York helped engineer a $2.3 billion purchase of Capsugel, a division of Pfizer. The deal closed in August 2011.

Rabalais's team in Houston also represented Group 1 Automotive in connection with its $1.25 billion floor plan and acquisition loan facility for its acquisition of David Taylor Cadillac Buick GMC, a deal closing in July 2011.

Simpson Thacher has 15 partners primarily working within its financial institutions practice, under the direction of veteran department head Lee Meyerson, who is widely respected in the industry. "Lee comes at things from the transactional side, he's an excellent lawyer and one of the acknowledged stars in this area," is a typical remark from a client.

The practice benefits significantly from having Stacie McGinn, a former deputy general counsel for Bank of America's consumer businesses, on board as a partner in New York. Although many of the transactions overseen by these lawyers involve acquisitions and/or divestitures, they are often deals at the intersection of acquisition finance and the regulatory overhaul entailed by the Dodd-Frank Act.

Deals
A team led by Lee Meyerson is representing Cadence Bancorp on the regulatory aspects of its $250 million acquisition of financial holding company Encore Bancshares, at a unit cost of $20.62 per share. In a similar deal, a team comprised of Meyerson, Cooper, Mandel, executive compensation partner Andrea Wahlquist, and antitrust lawyers Joe Tringali and Michael Naughton represented The Charles Schwab Corporation in an all-stock acquisition of online brokerage firm optionsXpress Holdings, a deal valued at roughly $1 billion.

In a deal announced in January 2012, a team led by Maripat Alpuche in New York is representing Goldman Sachs as advisor to Regions Financial with regard to the sale of Morgan & Keegan and affiliates to Raymond James Financial. Regions will reap total proceeds of $1.18 billion, of which Morgan Keegan will pay $250 million to Regions in advance of the closing.

In the private equity space Meyerson, credit partner James Cross, securities partner Laura Palma and M&A partner Elizabeth Cooper represented regular Simpson Thacher client Kohlberg Kravis Roberts, along with Warburg Pincus and Centerbridge Partners, in relation to their agreement to buy a 25% interest in Banco Santander's US auto finance business for $1 billion. Alpuche, Cooper, and Stacie McGinn also represented Oak Hill Capital and The Carlyle Group in a financing agreement with CommunityOne Bank's parent company, FNB United Corp. Under the agreement, the parties would each invest $77.5 million in the common stock of FNB United as a phase of a $310 million private placement of FNB United's common stock as well as its acquisition of Granite State Bank.

Simpson Thacher's private funds group has expanded its reach with the promotion of Jason Herman to partner in January 2012. Its 11 partners in New York, Los Angeles, Palo Alto, London and Hong Kong, do hedge fund work as well as private equity fund formation, but the practice is particularly notable in the latter area, with private equity fund clients including Apax Partners, Blackstone, Carlyle and Silver Lake. According to Simpson Thacher's own figures, its ten large private equity fund clients provided 51% of the practice's business in 2011.

The practice is impressive also for sheer breadth of funds launched. They include but are not limited to traditional funds for blue-chip clients like Blackstone, funds making primarily recapitalisation and distressed investments, project finance, real estate, debt and secondary investments funds.

Deals
Simpson Thacher's track record for fund formation in 2011-2012 is impressive. The highlights include – to take some of the larger examples – Blackstone Capital Partners VI, with more than $16 billion committed in 2012; Centerbridge Capital Partners II, with over $4.25 billion committed in 2011; BC European Capital IX, with €6.5 billion committed in 2012; and BTG Pactual Brazil Investment Fund I, with $1.5 billion committed in 2011.

Over the past year, Simpson Thacher's M&A team has worked on a range of deals as impressive for sheer volume as for geographical range. Under the leadership of veteran partner and department head Lee Meyerson, the practice has grown significantly, elevating attorneys Andrew Calder in its Houston office and Daniel Webb in its Palo Alto office to the status of partner as of January 1 2012.

In the words of one client, "A partnership developed between our in-house lawyers and Simpson Thacher. It was an interesting and unique transaction, solving a thorny issue and we found them to be very insightful, very approachable, very responsive, easy to communicate with, and very proactive. Many times they were calling us, we weren't calling them." The same client adds, "Eric Swedenburg, the lead counsel on the transaction, was phenomenal. I think by all accounts he made a very favourable impression on our board of directors."

According to a second client, "Charles 'Casey' Cogut is a senior statesman in M&A. He has a long history for doing major transactions, he knows everybody and he has a broad strategic view in terms of how to get deals done. Beyond just lawyers, Casey knows CEOs, he knows the heads of private equity firms and all of that is highly valuable for us."

A third client says, "Simpson Thacher helped us with a sizable transaction over the course of several years and the quality was consistent over that period. They did a fabulous job."

Deals
Department head Lee Meyerson and partner Eric Swedenburg represented Petrohawk Energy Corporation when BHP Billiton undertook the $15.1 billion acquisition of the independent oil and natural company. The deal, which closed in August 2011, had Goldman Sachs as co-counsel for Petrohawk, across from Sullivan & Cromwell and Morgan Lewis advising BHP. Another major energy conglomerate deal is the firms' representation of Arch Coal in its agreement to acquire outstanding shares of International Coal Group in a transaction whose total value reached $3.4 billion. Led by Simpson partner Mario Ponce, the legal team engineered a deal resulting in the second biggest metallurgical coal supplier in the United States.

In October 2011, Charles Cogut and Patrick Naughton represented equipment systems manufacturer Sealed Air in its $4.3 billion acquisition of hygiene and sanitation innovator Diversey Holdings.

A team led by Gary Horowitz and Marni Lerner represented Varian Semiconductor Equipment Associates in its acquisition by Applied Materials for approximately $4.9 billion. The deal closed in November 2011.

In a further demonstration of its M&A range, the firm announced a major deal in December 2011, in which a team led by Andrew Smith in New York will represent ITC Holdings in its acquisition of a core electric transmission unit of Entergy Corporation.

A team led by Ken Wallach represented coal miner and purchaser Drummond Company and affiliates in a joint venture with Japanese firm ITOCHU. In this deal, Drummond would give its mining operations in Colombia to a new entity called Drummond International and would also issue equity interests representing 20% of its outstanding equity to an ITOCHU subsidiary. In return, Drummond would receive roughly $1.52 billion, subject to purchase price revisions.

Simpson Thacher expanded the capabilities of its private equity buyouts practice, headed by Lee Meyerson in New York, by promoting two attorneys to partner status in January 2012. Andrew Calder, based in Houston, has expertise in energy sector securities law and M&A, while Daniel Webb, based in Palo Alto, specialises in capital markets and M&A transactions. The opening of Simpson Thacher's Houston office in the summer of 2011 benefits many practice areas of the firm, but especially one that engineers private equity buyouts in the oil and gas exploration and production corridor.

A client gives the following account: "We had a good experience with Simpson Thacher on a transaction. The deal was a good deal, the documents were well done and well negotiated."

While at times a greater focus or emphasis on larger transactions can be expected from most firms, some clients did mention that when it comes to partner time and focus a greater equality between clients would be welcomed from the firm.

Deals
A team led by Andrew Smith, Brian Steinhardt, Ed Tolley and Houston-based partner Robert Rabalais represented investors including KKR, Natural Gas Partners, Crestview Partners, and Itochu Corporation in their $7.2 billion acquisition of exploration and production firm Samson Investment Company in a deal closing in December 2011. Smith also led the charge on KKR's sale of Hilcorp Resources to Marathon Oil Corporation for $3.5 billion in November 2011.

In June 2011, a team directed by partners Greg Ressa, Erik Quarfordt, Brian Stadler, and Patrick Naughton acted as counsel for The Blackstone Group in its $4.9 billion acquisition of Centro Properties Group's US shopping mall business.

Simpson's attorneys are fluent in the language of take-private transactions and in one example Richard Capelouto and Naughton represented Hellman & Friedman in relation to Blackstone Capital Partners' roughly $3 billion acquisition of a controlling share of Emdeon. The deal closed in November 2011. Capelouto, Chad Skinner and Bill Brentani in Palo Alto and Brian Steinhardt in New York also represented Hellman & Friedman and Datatel in relation to a deal combining Datatel and the Higher Education entities of SunGard Data Systems.

Finally, a team led by partner Wilson Neely represented one of The Blackstone Group's portfolio companies, Graham Packing Company, in relation to its acquisition by Reynolds Group Holdings for $4.5 billion in a deal closing in September 2011.

Simpson Thacher's distinguished project finance practice benefits from the opening of a Houston office in April 2011 and the hiring of partner Robert Rabalais, but its work is hardly confined to the Texas oil and gas sector.

Deals
David Lieberman and Brian Chisling represented Lloyds TSB Bank and Landesbank Hessen-Thüringen Girozentrale, New York Branch, Mitzuho Corporate Bank, and The Bank of Tokyo-Mitsubishi UFJ, New York Branch, as lead arrangers and joint bookrunners in relation to a $233.97 million senior secured team loan for Redwood Trails Wind. The latter company is a subsidiary of NextEra Energy Resources, and the loan was partly for purposes of covering construction and development costs for a 36.8MW wind energy electric generating facility in Solano County, California, a 99.2MW wind energy electric generating facility in Grady County, Oklahoma, and a 100.8MW wind energy electric generating facility in Grady and Caddo Counties, Oklahoma. The arrangements were in place as of December 2011.

Lieberman represented The Blackstone Group in relation to $1.7 billion of secured financing for the Meerwind project. This 288MW wind farm in the German North Sea is expected to become Germany's biggest offshore wind-energy plant, powering 500,000 homes. The deal closed in August 2011.