EQM Midstream Partners Completes Strategic Acquisition of Eureka Midstream and Hornet Midstream
April 10 2019 - 5:28PM
Business Wire
Closes $1.2 Billion Private Placement of
Series A Convertible Preferred Units
Equitrans Midstream Corporation (NYSE: ETRN) and EQM Midstream
Partners, LP (NYSE: EQM) today announced that EQM has completed the
acquisition of a 60% interest in Eureka Midstream Holdings, LLC
(Eureka Midstream) and a 100% interest in Hornet Midstream
Holdings, LLC (Hornet Midstream) for total consideration of $1,030
million, comprised of approximately $860 million in cash and
approximately $170 million of assumed pro-rata debt. Concurrently,
EQM closed the private placement of $1.2 billion of newly issued
Series A Perpetual Convertible Preferred Units (Convertible
Preferred Units). A portion of the net proceeds from the
private placement was allocated to the cash purchase price of the
acquisition, with the remaining net proceeds to be used for general
purposes.
“We are pleased to have completed this important acquisition and
our team is excited to begin integrating the Eureka and Hornet
systems and leveraging our existing assets and core operating
capabilities,” said Diana M. Charletta, chief operating officer of
EQM. “We are relentless in our pursuit of becoming the low-cost
provider and partner of choice across all aspects of our business.
These value-enhancing assets will diversify our producer customer
mix and increase exposure to wet Marcellus acreage; expand our
supply hub and create additional commercial opportunities; reduce
unit operating costs through increased scale; and accelerate
opportunities for our water services business."
Asset Overview
Eureka Midstream is a 190-mile gathering header pipeline system
in Ohio and West Virginia that services both dry Utica and wet
Marcellus production. Hornet Midstream is a 15-mile, high-pressure
gathering system in West Virginia that connects to the Eureka
system.
Advisors
Citi and Guggenheim Securities, LLC acted as financial advisors
and Latham & Watkins acted as legal advisor to ETRN and EQM.
Citi and Guggenheim Securities, LLC also acted as joint placement
agents for the Convertible Preferred Units issuance.
About Equitrans Midstream Corporation
Equitrans Midstream Corporation (ETRN) has a premier asset
footprint in the Appalachian Basin and is one of the largest
natural gas gatherers in the United States. With a rich 135-year
history in the energy industry, ETRN was launched as a standalone
company in 2018 and, through its subsidiaries, has an operational
focus on gas gathering systems, transmission and storage systems,
and water services assets that support natural gas producers across
the Basin. ETRN is helping to meet America’s growing need for
clean-burning energy, while also providing a rewarding workplace
and enriching the communities where its employees live and work.
ETRN owns the non-economic general partner interest and a majority
ownership of the limited partner interest in EQM.
For more information on Equitrans Midstream Corporation, visit
www.equitransmidstream.com
About EQM Midstream Partners
EQM Midstream Partners, LP (EQM) is a growth-oriented limited
partnership formed to own, operate, acquire, and develop midstream
assets in the Appalachian Basin. As one of the largest gatherers of
natural gas in the United States, EQM provides midstream services
to producers, utilities, and other customers through its
strategically located natural gas transmission, storage, and
gathering systems, and water services to support energy development
and production in the Marcellus and Utica regions. EQM owns
approximately 950 miles of FERC-regulated interstate pipelines and
also owns and/or operates approximately 2,405 miles of high- and
low-pressure gathering lines.
For more information on EQM Midstream Partners, LP, visit
www.eqm-midstreampartners.com
Cautionary Statements
The Convertible Preferred Units sold in the private placement
have not been registered under the Securities Act of 1933, as
amended (Securities Act), or applicable state securities laws, and
accordingly may not be offered or sold in the United States except
pursuant to an effective registration statement or an applicable
exemption from the registration requirements of the Securities Act
and such applicable state securities laws. EQM has agreed to file a
registration statement with the Securities and Exchange Commission
(SEC) for the resale of the Convertible Preferred Units and the
common units representing limited partner interests in EQM issuable
upon conversion of the Convertible Preferred Units.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state or jurisdiction in
which the offer, solicitation or sale of these securities would be
unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
Disclosures in this news release contain certain forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities
Act. Statements that do not relate strictly to historical or
current facts are forward-looking. Without limiting the generality
of the foregoing, forward-looking statements contained in this news
release specifically include the expectations of plans, strategies,
objectives and growth and anticipated financial and operational
performance of Equitrans Midstream Corporation (ETRN) and its
subsidiaries, including EQM Midstream Partners, LP (EQM), including
guidance regarding EQM’s gathering and water services revenue and
volume growth; EQM’s ability to provide produced water handling
services and realize expansion and optimization and integration
opportunities and related capital avoidance; EQM’s ability to
effectively integrate the acquired assets and operations and
achieve anticipated synergies and accretion associated with such
acquisition, including through increased scale; and EQM’s ability
to access new customers for its water services business as a result
of the acquisition. These forward-looking statements involve risks
and uncertainties that could cause actual results to differ
materially from projected results. Accordingly, investors should
not place undue reliance on forward-looking statements as a
prediction of actual results. ETRN and EQM have based these
forward-looking statements on current expectations and assumptions
about future events. While ETRN and EQM consider these expectations
and assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other
risks and uncertainties, many of which are difficult to predict and
are beyond ETRN’s and/or EQM’s control. The risks and uncertainties
that may affect the operations, performance, and results of ETRN’s
and EQM’s business and forward-looking statements include, but are
not limited to, those set forth under Item 1A, “Risk Factors” of
ETRN’s Form 10-K for the year-ended December 31, 2018 as filed with
the SEC, and Item 1A, “Risk Factors” of EQM’s Form 10-K for the
year-ended December 31, 2018 as filed with the SEC, in each case as
may be updated by any subsequent Form 10-Qs. Any forward-looking
statement speaks only as of the date on which such statement is
made, and neither ETRN nor EQM intends to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Source: Equitrans Midstream Corporation
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version on businesswire.com: https://www.businesswire.com/news/home/20190410005891/en/
Analyst/Investor inquiries:Nate Tetlow — Vice President,
Corporate Development and Investor
Relations412-553-5834ntetlow@equitransmidstream.com
Media inquiries:Natalie A. Cox — Director, Corporate
Communications412-395-3941ncox@equitransmidstream.com
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