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Taxation With Representation: Davis Polk, Kirkland, Vinson

In this week’s Taxation with Representation, Targa sells its North Dakota oil and gas assets to Blackstone affiliates for $1.6 billion, Qlik Technologies takes over Attunity in a $560 million deal and Burger King franchisee Carrols Restaurant Group buys 221 fast-food stores from Cambridge Franchise Holdings for $238 million.

Blackstone Affiliates Make $1.6B Targa Stake Buy

Targa Resources Corp. on Tuesday said it would sell a minority stake in its North Dakota oil and gas assets to Blackstone-affiliated funds in a $1.6 billion deal.

Targa is represented by a Vinson & Elkins LLP team including tax partners James Meyer and Ryan Carney, with assistance from Brian Russell and Neil Clausen.

According to Targa, funds managed by GSO Capital Partners and Blackstone Tactical Opportunities will take control of a 45 percent stake in Targa Badlands LLC, the business controlling all of the energy company’s holdings in North Dakota.

Targa said Targa Badlands consists of assets and operations in the North Dakota portion of the Williston Basin, which sprawls across the Dakotas, Montana and into Saskatchewan in Canada. Specifically, The Targa Badlands holdings are located in the Bakken and Three Forks Shale plays, the company said.

In total, Targa Badlands controls 480 miles of crude oil gathering pipelines and 125,000 barrels of operational crude oil storage, along with 260 miles of natural gas gathering pipeline and the Little Missouri natural gas processing plant, in addition to a 50 percent stake in another natural gas plant.

Targa noted that it would continue to operate Targa Badlands, in addition to holding majority governance rights. The Houston-based energy company said it intended to use the funds from the deal to repay some of its debt and other “general corporate purposes,” such as funding for its growth capital program.

The tie-up is expected to be completed in the second quarter of 2019, Targa said.

Qlik Makes $560M Deal for Data Co. Attunity

Private equity-owned visual analytics company Qlik Technologies Inc. said Thursday it would take over data integration and management firm Attunity Ltd. in a $560 million deal.

Attunity is represented by a Davis Polk & Wardwell LLP team including tax partner William A. Curran.

The deal will see Qlik pay $23.50 for each Attunity share, representing an 18 percent premium on the Burlington, Massachusetts-based company’s closing share price. According to Qlik — the Thoma Bravo LLC-owned provider of data management and analytics tools — the acquisition expands the company’s enterprise data management offerings, on which the Philadelphia-headquartered firm can improve its existing analytics platform.

The deal for Attunity, combined with the July acquisition of data management firm Podium Data and the rollout of enterprise data management platform Qlik Data Catalyst, improves Qlik’s ability to handle cross-platform data streaming and sets the stage for a move into cloud and real-time analytics, the company said.

Qlik said Attunity offers a number of services that will boost its own products and services, including data replication and distribution, test data management, data connectivity, file transfers, data warehouse automation, data usage analytics and cloud data delivery. The company’s software is used either directly or indirectly by major companies around the world, including Microsoft Corp., Oracle Corp. and IBM, Qlik noted.

The tie-up between Qlik and Attunity is expected to close in the second quarter of 2019.

Carrols, Cambridge Ink $238M Burger King, Popeyes Franchises Deal

Major Burger King Corp. franchisee Carrols Restaurant Group Inc. will buy more of the fast-food chain’s stores and also pick up a number of Popeyes Louisiana Kitchen Inc. locations in a $238 million deal with Cambridge Franchise Holdings LLC, the company said in a statement Wednesday.

Cambridge is represented by a Kirkland & Ellis LLP team including tax partner Rachel Cantor and associate Christopher Worek.

Carrols — the largest Burger King franchisee in the U.S., with more than 800 restaurants — said it will pick up 166 more from Cambridge and also buy 55 Popeyes franchises in four states. The deal marks the first acquisition of Popeyes restaurants for Carrols, the company said.

Under the terms of the tax-free deal, Carrols will hand over 7.36 million of its outstanding shares to Cambridge, which represents a 16.6 percent stake in the Syracuse, New York-headquartered company. Cambridge is controlled by the managing partners of investment firm Garnett Station Partners and controlled by unnamed “family office investors,” according to Carrols.

In addition to the common stock, Carrols said it would also give Cambridge convertible preferred stock, which can be exchanged for 7.45 million shares of common stock at $13.50 a share. According to Carrols, the $13.50 price for the convertible stock represents a 44 percent premium on Carrols’ closing share price on Feb. 19.

Carrols said the preferred stock was subject to a conditional two-year sale or transfer restriction. Combining the common and preferred stock, Cambridge will hold a 24 percent equity stake in Carrols.

The Popeyes restaurants are located in Kentucky, Louisiana, Mississippi and Tennessee. Carrols said the deal includes Cambridge’s development agreement with Popeyes, which allows acquisition right of first refusal in Kentucky and Tennessee, and sets the stage for the development of around 70 new Popeyes franchises over the next six years.

Carrols said it intended to refinance the debt assumed from Cambridge, as well as its own existing debt.

On closing of the deal, Cambridge will be able to nominate up to two director nominees, and Garnett Station managing partners Matt Perelman and Alex Sloane will join the Carrols board, Carrols said.