Texas Pipeline Operator Altus to Combine with Blackstone-Backed BCP Raptor
(Reuters) — Altus Midstream Co. said it would merge with BCP Raptor, a holding company for pipeline assets in the Permian Basin owned by investment firms, with the combined entity to be valued at $9 billion inclusive of debt.
The transaction, a so-called reverse merger which will allow privately-owned BCP to become a public company, will hand control of Altus to BCP's backers: private equity firm Blackstone Inc. and infrastructure-focused investor I Squared Capital.
In exchange, Altus gains greater scale in the Permian, the U.S. shale industry's heart. The resultant company will be the largest integrated midstream operator in the Delaware part of the formation, according to Altus' statement.
The tie-up comes as commodity prices hit multi-year highs, offering confidence to energy companies to pursue transformative actions. Altus, with a market value of $1.4 billion, aims to close the deal in the first quarter of 2022.
For investment firms such as Blackstone, the positive environment offers a pathway to exit long-held bets on energy assets: stock in a public company can be regularly offloaded to ordinary shareholders, instead of needing a buyer for the whole private entity.
Blackstone and I Squared will own 75% of the combination. Apache Corporation, the oil and gas producer from which Altus was carved out in 2018 and merged with a blank-check firm, will slim its holding to 20% from 79%. The remaining 5% will belong to Altus' other investors.
Apache Corp, the U.S. arm of energy producer APA Corp , has agreed to the proposal, the statement said.
BCP owns EagleClaw Midstream, Caprock Midstream and Pinnacle Midstream. It also holds part of the Permian Highway Pipeline, and once joined with Altus' interest, they will be the majority owner of the 430-mile (700km) natural gas pipeline.
EagleClaw Chief Executive Jamie Welch will lead the merged entity.
Credit Suisse and Bracewell provided financial and legal advice, respectively, to Altus. Bankers assisting BCP and its backers were Barclays, Citi, Greenhill, Intrepid, and Jefferies, as well as law firms Vinson & Elkins and Sidley Austin.
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- Boardwalk Approves 110-Mile, 1.16 Bcf/d Mississippi Kosci Junction Pipeline Project
- Kinder Morgan Approves $1.4 Billion Mississippi Crossing Project to Boost Southeast Gas Supply
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- Enbridge Should Rethink Old, Troubled Line 5 Pipeline, IEEFA Says
- Polish Pipeline Operator Offers Firm Capacity to Transport Gas to Ukraine in 2025
Comments