Tailwater Capital announces sale of Tall Oak Midstream III to Summit Midstream Corporation | World Pipelines

Oct 18, 2024

Save to read list Published by Alfred Hamer, Editorial Assistant World Pipelines, Friday, 18 October 2024 10:30

Tailwater Capital LLC, an energy and environmental infrastructure private equity firm, today announced that it has entered into definitive agreements with Summit Midstream Corporation and its wholly owned subsidiary Summit Midstream Partners, LP, whereby Summit will acquire Tall Oak Midstream Operating, LLC and its subsidiaries for a total consideration of approximately US$450 million.

Consideration is comprised of US$155 million in cash, approximately 7.5 million shares of a combination of SMC Class B common stock and common units of the Partnership (in an Up-C structure), representing approximately 40% ownership in the pro forma company, and up to US$25 million contingent consideration in cash over certain measurement periods through 31 March 2026.

The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions, shareholder approval and regulatory approvals. Upon closing, four directors appointed by Tailwater Capital will serve on the pro forma Summit Board.

Tall Oak is a large-scale gas gathering and processing system in the Arkoma Basin comprised of two 220 million f3/d of natural gas processing plants and approximately 244 miles of low-pressure natural gas gathering lines, 167 miles of high-pressure natural gas gathering lines and 65 000 hp of field and plant compression.

“This transaction represents a unique opportunity to partner with the Summit organization to support the long-term growth and value creation initiatives already underway at the Company,” said Jason Downie, Co-Founder and Managing Partner at Tailwater. “The Tall Oak assets are complementary to Summit’s existing gas portfolio, and we believe the Company is well positioned to drive even more value for shareholders over the coming years.”

“Our entire Tall Oak team has done an exceptional job delivering high-quality service while prioritising reliability and safety, and I am confident that the Summit team will continue to execute and capitalize on new and exciting opportunities in the Arkoma Basin,” said Ryan Lewellyn, President and Chief Executive Officer at Tall Oak Midstream. “Tailwater has been an invaluable partner for our business, and we are excited to continue to work with Tailwater, not only on the transition of Tall Oak to Summit but also on future potential projects under the Tall Oak name.”

Read the article online at: https://www.worldpipelines.com/business-news/18102024/tailwater-capital-announces-sale-of-tall-oak-midstream-iii-to-summit-midstream-corporation/

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