MS Morgan Stanley

By Chris Wack

EQM Midstream Partners LP (EQM) said Thursday that it has agreed with a fund managed by Morgan Stanley Infrastructure Partners to acquire a 60% interest in Eureka Midstream Holdings LLC and a 100% interest in Hornet Midstream Holdings LLC for $1.03 billion.

The Pittsburgh-based limited partnership said in a release that the deal is comprised of $860 million in cash and $170 million of assumed pro-rata debt.

EQM Midstream said the purchase will add about 200,000 acres in core Marcellus and Utica development areas, with minimum volume commitments representing roughly 50% of current throughput, and will be fully funded by a committed, convertible preferred units issuance to lead investors consisting of funds managed by BlackRock.

The company said the deal is expected to generate about $100 million of earnings before interest, tax, depreciation and amortization during the first twelve months.

EQM said it expects the new assets and corresponding water services will see greater-than-20% annual EBITDA growth over the next several years.

The transaction is expected to be neutral to EQM distributable cash flow over the first 12 months and accretive thereafter.

The deal is expected to close on or about April 15.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

March 14, 2019 07:24 ET (11:24 GMT)

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