Deal Description: January 4, 2016 – Tallgrass Energy Partners, LP (the "Partnership") (NYSE: TEP) acquired an additional 31.3% interest in Tallgrass Pony Express Pipeline, LLC ("Pony Express") from a wholly-owned subsidiary of Tallgrass Development, LP, bringing the Partnership's total membership interest in Pony Express to 98%. The drop-down was negotiated on behalf of the Partnership by the Conflicts Committee of the Board of Directors of the general partner of the Partnership and the aggregate consideration for the transaction was approximately $743.6 million, consisting of $475 million in cash and the issuance of 6,518,000 common units (based on the closing price of TEP’s common units on December 31, 2015 of $41.21). As part of the transaction, Tallgrass Development granted the Partnership an 18 month call option to repurchase the newly issued 6,518,000 common units at a price of $42.50.
Pony Express currently owns an approximately 764-mile crude oil pipeline commencing in Guernsey, Wyoming, and terminating in Cushing, Oklahoma.
Baker Botts represented Tallgrass Development, LP and its affiliates in the transaction.
Baker Botts Lawyers/Office Involved: Mike Bengtson (Partner, Austin); Mollie Duckworth (Partner, Austin); Jon Nelsen (Partner, Tax); Mike Bresson (Partner, Houston); Robert Montgomery (Associate, Austin); Shana Mackey (Associate, Austin)
For more information, please see Tallgrass Energy Partners, LP’s news release by clicking here.
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