Hess Midstream to Acquire Hess Infrastructure for $6.2 Billion
October 04 2019 - 8:26AM
Dow Jones News
By Dave Sebastian
Hess Midstream Partners LP (HESM) said it would acquire Hess
Infrastructure Partners in a move aimed at simplifying its
structure.
The deal includes Hess Infrastructure's water-services business,
its 80% interest in Hess Midstream's oil and gas midstream assets
and outstanding economic partner interest and incentive
distribution rights in Hess Midstream. The companies value the cash
and stock deal at $6.2 billion.
Hess Infrastructure is a midstream energy joint venture between
Hess Corp. (HES) and the infrastructure private-equity firm Global
Infrastructure Partners.
Hess Corp. and Global Infrastructure will each own 47% of the
combined midstream company. The companies will also each receive
$275 million in cash.
The deal "simplifies the ownership structure of Hess Midstream,
provides transparency on the value of Hess' midstream interests,
and positions Hess Midstream for sustainable growth and value
creation," Hess Corp. Chief Executive John Hess said.
Hess Midstream said it would assume about $1.15 billion of
existing Hess Infrastructure debt and would issue about 230 million
Hess Midstream units.
The combined entity's organizational structure would be
converted into an "Up-C," in which payments in incentive
distribution rights to sponsors are eliminated, Hess Midstream
said.
Hess Midstream said the transaction would boost distributable
cash flow per unit in 2020 by 6% and more than 15% in 2021 and
2022.
Hess Midstream said it expects its 2020 net income to be between
$440 million and $480 million, and for adjusted earnings before
interest, taxes, depreciation and amortization of $710 million to
$750 million.
Hess Midstream said it expects the deal to close in the fourth
quarter.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
October 04, 2019 08:11 ET (12:11 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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