Austin Firm Makes $2 billion Purchase of Energy Transfer Subsidiary

Energy Transfer Partners, the Dallas-based company that left Tulsa’s Williams Cos. waiting at the merger altar 18 months ago has just completed a nearly $2 billion sale of its subsidiaries to  USA Compression Partners, LP. of Austin, Texas.

Energy Transfer Partners, L.P. and Energy Transfer Equity, L.P. announced Tuesday the $1.8 billion sale of its CDM Resource Management LLC and CDM Environmental and Technical Services LLC. The move results in an acquisition by USA Compression of 1.6 million horsepower in natural gas compression and expands the company’s geographic reach into active basins including Eagle Ford Shale, Gulf Coast, Rockies and the Permian Basin.

It also essentially doubles USA Compression’s fleet to 3.4 million horsepower while enabling ETP to reduce leverage with $1.225 billion in cash consideration. Also as part of the move, Energy Transfer Equity will acquire the general partner interest in USA Compression and end up with 12.5 million USAC common units.

USAC President and CEO Eric Long called it an exciting day for his company explaining the deal should be finalized in the first half of 2018. He said his company obtained committed financing for the $1.225 billion cash through a $500 million perpetual preferred units offering to investment funds managed or sub-advised by EIG Global Energy Partners, as well as $725 million in committed debt financing from JPMorgan and Barclays.