By Chris Dieterich
NEW YORK--Summit Midstream Partners LP (SMLP) rose in its public
trading launch, the first of two offerings debuting Friday on U.S.
exchanges.
Summit Midstream's limited-partnership units opened at $21 on
the New York Stock Exchange, up 5% from their offering price at
$20. The Dallas-based owner of natural-gas transmission
infrastructure sold 12.5 units Thursday night at the midpoint of
the proposed price range in a deal worth $250 million. If an
overallotment of units is exercised, the listing could raise as
much as $287 million.
Its units traded modestly higher than the initial price, at
$21.05, in the minutes after the opening.
Summit Midstream owns and operates natural-gas pipelines and
compression systems in shale formations across Colorado and
Texas.
Summit Midstream's offering is the latest high-yielding master
limited partnership to hit the market, following motor-fuel
wholesale distributor Susser Petroleum Partners LP's (SUSP) IPO
last week. Northern Tier Energy LP (NTI) went public in July, while
Hi-Crush Partners LP (HCLP) went public in August. Each has booked
double-digit gains since going public.
The recent MLP IPOs have offered yields that have been a strong
draw for investors. Summit Midstream will offer a quarterly payout
of 40 cents per unit each quarter, or $1.60 annually.
The company, formed in 2009 by a management team and
private-equity firm Energy Capital Partners, intends to grow
through further use and development of existing assets,
partnerships with large producers and acquisitions. Its customers
include major gas producers like Encana Corp. (ECA) and Chesapeake
Energy Corp. (CHK).
In the six months that ended June 30, the company reported a
profit of $16.7 million, down from $17.9 million in the
year-earlier period. Revenue during the period was $75.9 million,
up 81% from a year ago. The bulk of revenue was from gas-gathering
services and other fees.
Summit Midstream plans to use the money raised to repay a
revolving credit loan and for other corporate needs.
Its current owners include Energy Capital Partners and GE Energy
Financial Services.
Summit Midstream's IPO underwriters were Barclays, Bank of
America Merrill Lynch, Morgan Stanley and Goldman Sachs Group
Inc.
Write to Chris Dieterich at
christopher.dieterich@dowjones.com;
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