The investment firm Blackstone has entered into a $3.3 billion contract to acquire 100% of the membership interest in Tallgrass Energy, LP, the big midstream company based near Kansas City, Kansas. Tallgrass has operations in eleven states including storage at the Cushing oil hub in Oklahoma.
The deal covers affiliates of Kelso and Co., the Energy and Minerals Group and Tallgrass KC, LLC , an entity owned by certain members of management at Tallgrass Energy. It also includes 44% economic interest in Tallgrass. Affiliates of GIC, Singapore’s sovereign wealth fund will be a minority investor in the transaction.
“Blackstone’s scale, long-term capital, and investment expertise across the energy industry make it an ideal partner for our business as we continue to create value and invest capital in accretive growth opportunities,” said Tallgrass President and CEO David G. Dehaemers Jr. “We appreciate the successful partnership we have had with Kelso and EMG since 2012 and thank them for their significant support. We look forward to working with Blackstone to continue maximizing value for all stakeholders.”
“Tallgrass is managed by an exceptional team that has an outstanding track record of commercial, operational and financial success,” said Sean Klimczak, Global Head of Infrastructure at Blackstone. “This transaction represents a rare opportunity to invest in a large-scale U.S. midstream infrastructure platform that connects high-production supply basins to key markets and is underpinned by long-term contracts. We are excited to partner with and to support the established Tallgrass management team over the long term as they execute on their robust backlog of attractive growth projects.”
Closing of the transaction remains subject to customary closing conditions and is expected within the first quarter of 2019.
Tallgrass Energy, LP (NYSE: TGE) is a growth-oriented midstream energy infrastructure company operating across 11 states with transportation, storage, terminal, water, gathering and processing assets that serve some of the nation’s most prolific crude oil and natural gas basins.
Tallgrass Terminals owns a 60 percent interest in the Deeprock Development terminal in Cushing, Okla., which provides approximately 4 million barrels of storage at the country’s “Pipeline Crossroads of the World.” This facility offers pump-over services to other terminals and pipelines, giving customers attractive optionality out of Cushing.