EagleClaw Midstream Ventures and its financial sponsor, EnCap Flatrock Midstream, agreed to sell the company for about US$2 billion to funds managed by Blackstone’s energy-focused private equity business, the American midstream operator said.
The all-cash transaction with Blackstone Energy Partners and Blackstone Capital Partners is expected to close by the end of July 2017 and includes approximately $1.25 billion in stapled debt financing provided by Jefferies LLC, EagleClaw said.
Headquartered in Midland, Texas, EagleClaw Midstream is a midstream company focused on developing infrastructure opportunities in the Permian Basin. EagleClaw provides natural gas producers with a wide array of midstream services including gathering, compression, treating, processing and transportation.
EagleClaw said it will retain its name and operate as a Blackstone portfolio company. The leadership team and fundamentally all of the company’s employees will remain in their current roles and are investing alongside Blackstone in this transaction.
EagleClaw is the largest privately held midstream operator in the Permian’s Delaware Basin in West Texas. The company’s assets are strategically located in Reeves, Ward and Culberson counties and include more than 375 miles of natural gas gathering pipelines and 320 million cubic feet per day (MMcf/d) of processing capacity with an additional 400 MMcf/d under construction.
“As we begin a new chapter, we will continue to deliver the same outstanding level of service our customers expect while we work with Blackstone to deploy additional capital and to expand our footprint in the Delaware Basin,” said EagleClaw President and CEO Bob Milam. “Blackstone has a deep understanding of the compelling fundamentals of the upstream and midstream economics in the Permian, an outstanding reputation as an investor in the energy sector and the scale to take EagleClaw to the next level.”
“The sale to Blackstone will produce strong returns for our institutional investors and rewards,” said EnCap Flatrock Midstream Managing Partner and Founder Bill Waldrip.
“Our extensive experience over the past two decades as an investor across all segments of the energy sector, access to capital on a very large scale and first-hand knowledge of the Permian as an owner of oil and gas producers in this region make Blackstone uniquely well qualified to acquire EagleClaw and to build upon the solid foundation started with the investment of Bill Waldrip and the folks at EnCap Flatrock Midstream,” said David Foley, senior managing director of Blackstone and CEO of Blackstone Energy Partners.
We are pleased to partner with management to ensure EagleClaw is well positioned to continue to serve the rapidly growing future needs of its expanding customer base, creating additional jobs for American workers and providing significant benefits to the economy.”