Deal Description: November 30, 2018 - Equitrans Midstream Corporation (NYSE: ETRN) announced today that it has entered into definitive agreements with certain unitholders of EQGP Holdings, LP (NYSE: EQGP) to acquire approximately 12.8 million common units representing limited partner interests in EQGP (“EQGP Common Units”) for $20.00 per unit in cash (the “Private Purchases”), after which ETRN will own more than 95% of the outstanding EQGP Common Units. Upon the closing of the Private Purchases, ETRN intends to exercise the Limited Call Right under EQGP’s partnership agreement to acquire all remaining EQGP Common Units not then owned by ETRN and its affiliates for at least the same cash price per unit that will be paid in the Private Purchases.
The Private Purchases are expected to close on or about December 31, 2018 and the Limited Call Right is expected to close in January 2019. Upon the completion of the Private Purchases and the Limited Call Right, EQGP will own 100% of the outstanding EQGP Common Units.
ETRN intends to use the cash proceeds from a newly issued Term Loan B to finance the Private Purchases and the purchases pursuant to the Limited Call Right and has secured committed financing in support of these purchases.
ETRN also announced that it has made a proposal to EQM Midstream Partners, LP (NYSE: EQM) for the exchange of its incentive distribution rights and the economic general partner interest in EQM for 95 million units in EQM and a non-economic general partner interest in EQM, subject to the closing of the Private Purchases and completion of the Limited Call Right (Proposed IDR Transaction). Final terms of the Proposed IDR Transaction are subject to negotiation with the board of directors of EQM’s general partner or its conflicts committee.
Upon completion of the Private Purchases, the Limited Call Right and the Proposed IDR Transaction, ETRN will have accomplished a full simplification of EQGP and EQM resulting in a projected 61% ownership of EQM.
Baker Botts represented ETRN in the transactions.
Target: EQGP Holdings, LP
Client: Equitrans Midstream Corporation
Outside Counsel to Equitrans Midstream Corporation: Baker Botts L.L.P.
Financial Advisors to Equitrans Midstream Corporation: Guggenheim Securities and Goldman Sachs & Co. LLC
Counsel to Financial Advisors: Guggenheim Securities was represented by Latham & Watkins, LLC. Goldman Sachs & Co. LLC was represented by Sullivan & Cromwell LLP.
Other Parties: None
Value: $530 million (Private Purchases and Limited Call Right)
Baker Botts Lawyers/Office Involved:
Corporate: Mike Bengtson (Partner, New York); Josh Davidson (Partner, Houston); Mollie Duckworth (Partner, Austin); John Kaercher (Senior Associate, Austin); Jennifer Wu (Associate, Austin); Rachel Ratcliffe (Associate, Austin); Michael Portillo (Associate, Austin)
Finance: Rachael Lichman (Partner, Houston); Luke Weedon (Partner, Dallas); Robert Wann (Partner, New York); Clint Culpepper (Senior Associate, Austin); Malory Weir (Associate, Houston)
Tax: Mike Bresson (Partner, Houston); Jared Meier (Senior Associate, Houston)
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