Deal Description: On February 7, 2018, Tallgrass Energy GP, LP (NYSE: TEGP) (“TEGP”) and Tallgrass Energy Partners, LP (NYSE: TEP) (“TEP”) announced that Tallgrass Development, LP (“TD”) merged with Tallgrass Equity, LLC (“Tallgrass Equity”), a subsidiary of TEGP (the “Merger”). As a result of the Merger, Tallgrass Equity acquired a 25.01 percent membership interest in Rockies Express Pipeline LLC (“REX”) and 5,619,218 TEP common units. In consideration, TEGP and Tallgrass Equity issued 27,554,785 unregistered TEGP Class B shares and Tallgrass Equity units valued at approximately $644.8 million based on the TEGP closing price on Feb. 6, 2018. The equity issued by TEGP and Tallgrass Equity was based on a discounted 30-day volume-weighted average price of TEGP Class A shares. The 25.01 percent REX membership interest was valued at approximately $400 million and the 5,619,218 TEP common units were valued at approximately $256.2 million based on a 30-day volume weighted average price.

The companies also announced that, prior to the Merger, TEP acquired a 2 percent membership interest in Tallgrass Pony Express Pipeline, LLC and other administrative assets from TD effective February 1, 2018 for cash consideration of approximately $60 million (the “Pony Transaction”). TEP funded the Pony Transaction with borrowings under its revolving credit facility.

Baker Botts represented Tallgrass Development, LP and its affiliates in connection with the Merger and the Pony Transaction.

Baker Botts Lawyers/Office Involved:
Corporate: Mollie Duckworth (Partner, Austin); Jennifer Wu (Associate, Austin); Allison Lancaster (Associate, Austin).
Tax: Mike Bresson (Partner, Houston); Jon Nelsen (Partner, Austin); Leah Patrick (Associate, Houston).

For more information, please see Tallgrass’ news release.

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