Establishes fully integrated Permian Basin
platform at scale
Expands and extends footprint in
Mid-Continent, North Texas and
Louisiana
Delivers immediate accretion to EPS and FCF
supporting capital allocation strategy
Provides significant synergies through
complementary asset positions
Maintains ONEOK's strong investment-grade
credit ratings
ONEOK intends to pursue a tax-free acquisition
of the EnLink publicly held interests following the
closing of this transaction
TULSA,
Okla., Aug. 28, 2024 /PRNewswire/ -- ONEOK, Inc.
(NYSE: OKE) ("ONEOK") today announced that it has executed a
definitive agreement with Global Infrastructure Partners ("GIP")
under which ONEOK will acquire GIP's entire interest in EnLink
Midstream, LLC (NYSE: ENLC) ("EnLink"), consisting of 43% of
EnLink's outstanding common units for $14.90 per unit and 100% of the interests in the
managing member for $300 million, for
total cash consideration of approximately $3.3 billion.
ONEOK and GIP also entered into a separate definitive agreement
under which ONEOK will acquire from GIP all of the equity interests
in Medallion Midstream, LLC ("Medallion"), the largest privately
held crude gathering and transportation system in the Permian's
Midland Basin, for $2.6
billion1 in cash representing approximately 6.3
times estimated 2025 EBITDA, including expected base case run-rate
synergies.
CEO PERSPECTIVE:
"ONEOK has a longstanding reputation as being intentional in
building a premier energy infrastructure company, and today's
transactions further solidify that status by adding complementary
assets that allow us to continue expanding and extending our value
chain," said Pierce H. Norton II,
ONEOK president and chief executive officer.
"We are particularly excited to meaningfully increase our
company's presence in the Permian Basin, which is expected to
continue driving the majority of U.S. oil and gas growth.
ONEOK has demonstrated its ability to bring assets together and
capture synergies, and we are confident that these accretive
transactions will enhance value for our stakeholders and will allow
us to provide enhanced offerings across multiple ONEOK
platforms.
"We are also looking forward to welcoming the employees of
EnLink and Medallion to ONEOK," added Norton.
STRATEGIC RATIONALE:
- Establishes fully integrated Permian Basin platform at
scale: The transactions are highly complementary to ONEOK's
existing Permian natural gas liquids ("NGL") and crude
infrastructure platform and include 1.7 billion cubic feet per day
of Permian gas processing capacity and 1.6 million barrels per day
of Permian crude gathering capacity. ONEOK expects to capitalize on
its expanded and integrated platforms in the Permian Basin to drive
new service offerings for producers in the region.
- Expands and extends footprint in Mid-Continent, North Texas and Louisiana: The EnLink transaction enhances
ONEOK's existing integrated gas and NGL platform in Oklahoma and provides ONEOK with gas gathering
and processing operations in North
Texas that produce solid cash flows and are directly
connected to Mont Belvieu by
ONEOK's NGL pipelines. The EnLink transaction also provides ONEOK
with a new position in Louisiana
that includes 220,000 barrels per day of NGL fractionation capacity
and approximately 4.0 billion cubic feet per day of natural gas
pipeline capacity, both of which are connected to key demand
centers. ONEOK expects the natural gas transmission assets to
benefit from strong industrial demand growth related to data
centers, liquefied natural gas, ammonia and hydrogen.
- Delivers immediate accretion to EPS and FCF supporting
capital allocation strategy: The transactions are expected to
be immediately accretive to earnings per share and free cash flow
per share. The expected accretion will further bolster ONEOK's
capital allocation strategy and ability to execute share
repurchases under its previously authorized $2 billion share repurchase program.
- Provides significant synergies through complementary asset
positions: In addition to meaningful commercial synergies ONEOK
will attain from owning Medallion's crude gathering business in the
Permian Basin, ONEOK expects additional synergies to be achieved
through its control of EnLink. Key commercial and operational
synergy potential from EnLink centers on integrating ONEOK's and
EnLink's Mid-Continent gathering and processing systems and
optimizing ONEOK's and EnLink's Gulf Coast NGL assets. Following
the acquisition of Medallion, the acquisition of GIP's interests in
EnLink and the proposed purchase of the publicly held interests in
EnLink, ONEOK believes these, and other contemplated activities
will result in annual synergies of approximately $250 million to $450
million within three years.
- Maintains ONEOK's strong investment-grade credit
ratings: After giving effect to the transactions, ONEOK expects
pro forma 2025 year-end net debt-to-EBITDA of approximately 3.9
times. ONEOK believes the transactions will improve its overall
credit attributes and expects leverage to trend toward its
previously announced target of 3.5 times during 2026 as growth
projects are placed into service, assuming the completion of
ONEOK's previously announced $2
billion share repurchase program by year end 2027.
DETAILS OF THE TRANSACTIONS:
$300 million of the total
$3.3 billion purchase price for the
EnLink interests is for GIP's 100% interest in the managing member
of EnLink. GIP's common units in EnLink are being purchased
for a total value of $3.0 billion, or
$14.90 per unit, representing a
premium of 12.8% to EnLink's closing market price as of
Aug. 27, 2024. As a result of
the transaction with GIP, EnLink will be a consolidated subsidiary
of ONEOK for GAAP financial reporting purposes.
After the closing of the purchase of GIP's interests in EnLink,
ONEOK intends to pursue the acquisition of the publicly held common
units of EnLink in a tax-free transaction. The fully combined ONEOK
and EnLink asset bases would be expected to enhance synergies,
reduce leverage and increase accretion to ONEOK shareholders.
In addition, a combination with ONEOK is expected to give EnLink
unitholders access to ONEOK's stock which is part of the S&P
500, and which has significantly greater trading liquidity and an
attractive dividend yield.
ONEOK has obtained financing commitments from JPMorgan Chase
Bank, N.A. and Goldman Sachs Bank USA to provide up to $6.0 billion to fund the aggregate cash
consideration and other expenses in connection with the EnLink and
Medallion transactions. Both transactions have been
unanimously approved by ONEOK's board of directors. The
transactions are not cross conditional and are expected to close
early in the fourth quarter of 2024. The closing of each
transaction is subject to customary closing conditions, including
Hart-Scott-Rodino Act clearance.
Upon closing of the EnLink transaction, ONEOK will have control
of EnLink's managing member and intends to replace the board
members currently designated by GIP with new board members
designated by ONEOK.
ONEOK will maintain its headquarters in Tulsa, Oklahoma, and intends to retain a
meaningful employee presence in the Dallas and Houston metropolitan areas.
CONFERENCE CALL INFORMATION:
ONEOK executive management will host a conference call on
Thursday, Aug. 29, 2024, at
8:30 a.m. Eastern Daylight Time
(7:30 a.m. Central Daylight Time) to
discuss the transaction.
To participate in the telephone conference call, dial
877-883-0383, entry number 9747806, or log on to www.oneok.com. The
call also will be carried live on ONEOK's website.
If you are unable to participate in the conference call or the
webcast, the replay will be available on ONEOK's website,
www.oneok.com, for one year. A recording will be available by phone
for seven days and may be accessed at 877-344-7529, access code
5816083.
TRANSACTION PRESENTATION:
Additional information that will be discussed on the conference
call is accessible by selecting the link below.
https://ir.oneok.com/news-and-events/events-and-presentations
ADVISORS:
Goldman Sachs & Co. LLC is serving as lead financial advisor
to ONEOK for the EnLink transaction. J.P. Morgan Securities, LLC
and TPH&Co., the energy business of Perella Weinberg Partners,
also advised ONEOK. Kirkland & Ellis LLP is serving as ONEOK's
legal advisor.
Greenhill, a Mizuho affiliate, and Scotiabank are serving as
financial advisors to GIP for the EnLink transaction. Latham &
Watkins is acting as GIP's legal advisor.
Goldman Sachs & Co. LLC is serving as lead financial advisor
to ONEOK for the Medallion transaction. J.P. Morgan Securities, LLC
and BofA Securities also advised ONEOK. Kirkland & Ellis LLP is
serving as ONEOK's legal advisor.
RBC Capital Markets is serving as lead financial advisor to GIP
for the Medallion transaction. Santander US Capital Markets LLC
also advised GIP. Vinson & Elkins is acting as GIP's legal
advisor.
JPMorgan Chase Bank, N.A. and Goldman Sachs Bank USA are providing fully committed financing
for both transactions.
ABOUT ONEOK:
At ONEOK (NYSE: OKE), we deliver energy products and services
vital to an advancing world. We are a leading midstream operator
that provides gathering, processing, fractionation, transportation
and storage services. Through our more than 50,000-mile pipeline
network, we transport the natural gas, NGLs, refined products and
crude oil that help meet domestic and international energy demand,
contribute to energy security and provide safe, reliable and
responsible energy solutions needed today and into the future. As
one of the largest diversified energy infrastructure companies in
North America, ONEOK is delivering
energy that makes a difference in the lives of people in the U.S.
and around the world.
ONEOK is an S&P 500 company headquartered in Tulsa, Oklahoma.
ABOUT GLOBAL INFRASTRUCTURE PARTNERS (GIP):
Global Infrastructure Partners (GIP) is a leading infrastructure
investor that specializes in investing in, owning and operating
some of the largest and most complex assets across the energy,
transport, digital infrastructure and water and waste management
sectors. Headquartered in New
York, GIP has offices in Brisbane, Dallas, Hong
Kong, London, Melbourne, Mumbai, Singapore, Stamford and Sydney.
GIP has approximately $115 billion
in assets under management. GIPs portfolio companies have combined
annual revenues of approximately $71
billion and employ over 116,000 people. GIP believes that
its focus on real infrastructure assets, combined with its deep
proprietary origination network and comprehensive operational
expertise, enables it to be responsible stewards of investor
capital and to create positive economic impact for communities. For
more information, visit www.global-infra.com
[global-infra.com].
1 Includes potential consideration to acquire the
remaining interests in a Medallion joint venture pursuant to
existing third-party rights.
FORWARD-LOOKING STATEMENTS:
This communication contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical fact,
included in this communication that address activities, events or
developments that ONEOK expects, believes or anticipates will or
may occur in the future are forward-looking statements. Words such
as "estimate," "project," "predict," "believe," "expect,"
"anticipate," "potential," "opportunity," "create," "intend,"
"could," "would," "may," "plan," "will," "guidance," "look,"
"goal," "target," "future," "build," "focus," "continue," "strive,"
"allow" or the negative of such terms or other variations thereof
and words and terms of similar substance used in connection with
any discussion of future plans, actions, or events identify
forward-looking statements. However, the absence of these words
does not mean that the statements are not forward-looking. These
forward-looking statements include, but are not limited to,
statements regarding the proposed transactions, the expected
closing of the proposed transactions and the timing thereof,
ONEOK's ability to acquire the publicly-held common units in EnLink
following the completion of the acquisition of GIP's interest in
EnLink and the timing thereof, descriptions of ONEOK and its
operations after giving effect to the transactions, strategies and
plans, integration, debt levels and leverage ratios, capital
expenditures, cash flows and anticipated uses thereof, synergies,
opportunities and anticipated future performance, including
enhancements to ONEOK's investment-grade credit profile, the
expected accretion to earnings per share and free cash flow per
share, dividend payments and potential share repurchases, increase
in the value of tax attributes and the expected impact on EBITDA.
Information adjusted for the proposed transactions should not be
considered a forecast of future results. There are a number of
risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements included in this
communication. These include the risk that ONEOK's, EnLink's and
Medallion's businesses will not be integrated successfully; the
risk that cost savings, synergies and growth from the proposed
transactions may not be fully realized or may take longer to
realize than expected; the risk that the credit ratings following
the proposed transactions may be different from what ONEOK expects;
the risk that a condition to closing of either of the proposed
transactions may not be satisfied, that any party may terminate the
applicable definitive agreements or that the closing of either of
the proposed transactions might be delayed or not occur at all; the
risk of potential adverse reactions or changes to business or
employee relationships, including those resulting from the
announcement or completion of the proposed transactions; the risk
that the parties do not receive regulatory approval of the proposed
transactions; risks related to the occurrence of any other event,
change or circumstance that could give rise to the termination of
the proposed transactions; the risk that changes in ONEOK's capital
structure could have adverse effects on the market value of its
securities; risks related to the ability of the parties to retain
customers and retain and hire key personnel and maintain
relationships with their suppliers and customers and on each of the
companies' operating results and business generally; the risk that
the proposed transactions could distract management from ongoing
business operations or cause any of the companies to incur
substantial costs; the risk that ONEOK may be unable to reduce
expenses or access financing or liquidity; risks related to the
impact of any economic downturn and any substantial decline in
commodity prices; the risk of changes in governmental regulations
or enforcement practices, especially with respect to environmental,
health and safety matters; and other important factors that could
cause actual results to differ materially from those projected. All
such factors are difficult to predict and are beyond ONEOK's
control, including those detailed in ONEOK's Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K that are available on ONEOK's website at www.oneok.com and on
the website of the Securities and Exchange Commission at
www.sec.gov. All forward-looking statements are based on
assumptions that ONEOK believes to be reasonable but that may not
prove to be accurate. Any forward-looking statement speaks only as
of the date on which such statement is made, and ONEOK does not
undertake any obligation to correct or update any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as required by applicable law. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof.
CONTACTS:
ONEOK, Inc.
Investor Relations:
Andrew Ziola
(918) 588-7683
ONEOKInvestorRelations@oneok.com
Media Relations:
Alicia Buffer
(918) 861-3749
alicia.buffer@oneok.com
Global Infrastructure Partners (GIP)
Mustafa Riffat
(929) 656-2729
mustafa.riffat@global-infra.com
View original
content:https://www.prnewswire.com/news-releases/oneok-to-acquire-medallion-and-controlling-interest-in-enlink-from-global-infrastructure-partners-in-transactions-valued-at-5-9-billion-302233600.html
SOURCE ONEOK, Inc.