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
- Poland Detects Leak in Russia's Druzhba Oil Pipeline
- Energy Transfer to Buy Crestwood in $7.1 Billion Pipeline Deal
- Magellan Midstream Approves $18.8 Billion Sale to ONEOK, Creating Major U.S. Pipeline Player
- DT Midstream Successfully Completes Phase 1 LEAP Expansion Ahead of Schedule
- Equitrans to Begin Construction on Ohio Valley Connector Expansion Project
- Canada Looking to Sell Trans Mountain Pipeline Stake to Indigenous Groups
- Energy Transfer to Buy Crestwood in $7.1 Billion Pipeline Deal
- Criteria to Consider in Selecting Water Transfer Flow Meters
- US Energy Firm Payouts to Oil Investors Top Exploration Spending for First Time
- DT Midstream Successfully Completes Phase 1 LEAP Expansion Ahead of Schedule
Comments