7-Eleven Inc.'s $21 billion acquisition of a convenience retail competitor was notable for its price tag and because a young, Black deal lawyer led it.
Dawud Crooms, 38, 7-Eleven’s senior counsel, worked for months to shepherd the Irving, Texas-based company’s purchase of Speedway’s more than 3,000 stores in states across the country.
“This was extra complicated because convenience retail is a complex market, and the business underwent a change last year,” Crooms said in an interview. “We just had to negotiate through and overcome.”
African American M&A lawyers leading transactions of such magnitude have been rare in the legal industry. When they do, they’ve drawn attention.
For instance, last fall, a deal team composed of five Black women lawyers from Skadden, Akerman, Covington & Burling and Adtalem Global Education made news when it handled Adtalem’s $1.48 billion acquisition of online, for-profit Walden University. Chaka Patterson, the company’s general counsel at the time, told Bloomberg Law that he chose the team “to set the tone and drive diversity” by corporate counsel departments. 7-Eleven worked with Akin Gump Strauss Hauer & Feld.
‘So Much Uncertainty’
Wrapping the deal was no cake walk, Crooms, a University of Michigan Law School graduate, said.
The coronavirus pandemic threw an unexpected wrench into the Speedway bid, which had begun at the end of 2019. Regular driving patterns took a hit after people stopped commuting to work.
“Covid created so much uncertainty in the travel market,” Crooms said. “People were not stopping to gas up for work, or buy a coffee, or stopping in to buy a soda and snack for their kids.”
On top of a stressed economy, the deal had objections from organized labor and from the Federal Trade Commission. Eventually, 7-Eleven had to sell some of the newly acquired assets.
“The deal required all hands all the time,” Crooms said. “There was no one in the legal department that did not have at least some exposure. On a deal of this size, you have to be extraordinarily careful.”
Crooms, like so many others, worked from home, with his wife and four children who were also quarantining while Covid swept through Texas and the world.
Not His First Rodeo
This was not the first merger Crooms engineered since he joined 7-Eleven in 2015.
Prior to joining the company, he had been a merger and acquisitions lawyer at Haynes & Boone, the Dallas-based international firm where he began his legal career 11 years ago, and where he learned the fundamentals of corporate legal work.
He attended Morehouse College, an elite historically Black college in Atlanta. The school’s student club for business and finance majors wet his interest in business, he said.
“I had no exposure to business growing up, except that my uncle owned an electrical business in New Jersey where I grew up,” he said.
After earning a computer science degree, he joined JPMorgan Chase, working as a derivatives risk management analyst. He wanted to widen his career options by earning a business school degree. But his wife made it clear that she wasn’t a fan of raising a family—they had one child by then—in financial centers like New York, London or Tokyo.
“She recommended thinking of law school,” he said. He was accepted to the University of Michigan Law School, and once he graduated, he joined Dallas-headquartered Haynes & Boone, working in M&A and capital markets.
Crooms said the firm had been active in “intentional” diversity efforts, and he credited mentors like Gregory Samuel, partner in the firm’s capital markets and securities group, for his support.
“Greg, in particular, took an interest in me early and gave me some opportunities to work on interesting, complex matters,” he said.
And Suzie Trigg, a business transactions development partner, worked with him on deals. Among them was Adidas’s TaylorMade Golf’s $70 million purchase of Adams Golf Inc., in 2012.
“He both reaches creative solutions and has excellent business acumen to be able to handle the very large transactions and shepherd them to conclusion,” Trigg said.
It wasn’t too long before David Colletti, who Crooms also regards as a mentor, and who had left Haynes & Boone for 7-Eleven, recruited him to work as senior counsel at the client, which had $17.76 billion in consumable sales, according to the 2020 Supermarket News’s Top 75 Retailers Report.
“We worked so closely with 7-Eleven,” Trigg said, “that it was a joke in the firm that they were stealing our best lawyers.”
One of Crooms’s earlier 7-Eleven deals, in 2018, was a $3.3 billion assets transaction for Sunoco, which added 1,030 stores and was the biggest acquisition for the company at the time. But, overall, the Speedway deal is 7-Eleven’s largest acquisition, Crooms said.
7-Eleven first announced that it had entered into an agreement to acquire Speedway from its owner Marathon Petroleum Corp. in August 2020, with plans to integrate Speedway’s 40,000 employees.
But the pending sale ran into opposition. Last March, the International Brotherhood of Teamsters asked the Federal Trade Commission to pause review of the sale between Marathon and 7-Eleven’s Tokyo-based parent company, Seven & i Holdings Co. The union warned that the merger would give 7-Eleven more than 13,000 stores nationwide, more than double its nearest competitor, and likely drive up the price of gasoline.
The merger “could result in a double mark up and therefore higher prices to consumers,” the union said. The convenience retailer continued to pursue Speedway and, on May 14, it announced the “successful completion” of the takeover.
The same day, the FTC issued a separate statement, labeling the merger agreement “illegal” under federal antitrust law and warning that, “In many local markets, the transaction is either a merger-to-monopoly or reduces the number of competitors from three to two.”
FTC Acting Chairwoman Rebecca Kelly Slaughter and Commissioner Rohit Chopra said the parties had closed the “transaction at their own risk” and that the commission “can and routinely does challenge these harmful mergers.”
Four days later, 7-Eleven announced that it would be selling nearly 300 Speedway and 7-Eleven stores to three different buyers in California, Idaho and the mid-Atlantic and Northeast.
In late May, an FTC spokesperson said that the agency was still reviewing and investigating the deal, but it has taken no public action in recent weeks.
As far as Crooms is concerned, “That’s the public comment. This is a sensitive matter. The transaction is closed.”
“This is one of the biggest deals in the country in the last year, and we’re really excited about that,” he said.
He said he doesn’t keep a scorecard that ranks whether he has handled the largest deal, but noted that African-American attorneys in large corporations and in positions of legal leadership are “still few and far between. And those are disproportionately litigators.”
He said that for the ranks of Black deal lawyers to grow, Black lawyers must have more opportunties to engage with the business world.
“In order to change the underrepresentation of African-American transactional lawyers, a big part of that is underexposure,” Crooms said. “A disproportionate number of African-Americans are exposed to the law from a criminal litigation perspective first, and by the time it comes to making a decision to enter law school, or what to do with your legal career, there is not a broad array of subject matter about finance and other topics.”
“That’s something my colleagues are working to turn,” Crooms added. “It’s a really big issue.”