(July 30) – Texas lawyers from four different law firms were involved in two energy infrastructure-related deals announced Monday that together amounted to nearly $2.3 billion.
TPG Growth said it agreed to sell Dallas-based Discovery Midstream to a newly formed joint venture between private equity firm KKR and Williams Cos. for $1.173 billion.
Vinson & Elkins advised TPG Growth, the middle market and growth equity platform of alternative asset firm TPG. The corporate team was led by partners Keith Fullenweider and John Grand and associate Robert Hughes.
Simpson Thacher & Bartlett partner Breen Haire and associate Jacqui Bogucki in Houston counseled KKR. A partner in Gibson Dunn’s Denver office led the deal for Williams but Houston and Denver associate Melissa Persons and Houston associate Danny Nordstrom were part of the team.
Williams’ in-house team included assistant general counsel John Gammie and senior attorney Jessie Pierre-Jack, both in Tulsa.
Jefferies advised TPG Growth on the sale. Christopher Ortega led the investment from TPG out of New York.
Williams and KKR used Simmons as their financial advisor.
The parties expect the transaction to close in the third quarter. KKR will own 60 percent of the project while Williams will hold the rest. Williams agreed to provide additional capital when needed to bring its stake to 50 percent.
The other deal was Hilcorp Energy-backed Harvest Midstream Co. agreeing to buy assets in the Four Corners area of New Mexico and Colorado from Williams affiliate Williams Partners for $1.125 billion.
Bracewell partners Cle Dade and associate Lytch Gutmann in Houston advised Harvest Midstream. Davis Polk & Wardwell was Williams’ legal advisor and Morgan Stanley was its financial advisor.
Williams aims to close that deal in the second half of the year after it completes it’s already announced acquisition of Williams Partners.
Discovery was founded in 2015 by Steven Meisel and Drew Chambers, former executives at Highstar Capital-owned Wildcat Midstream, and was purchased by TPG Growth last year.
The company provides oil and natural gas gathering and natural gas processing services in the southern part of Colorado’s Denver-Julesburg Basin. Its infrastructure and related facilities are located across 250,000 dedicated acres primarily in Weld and Adams counties.
The Discovery system features natural gas and crude oil gathering pipelines, cryogenic gas processing, liquids handling and crude oil storage. Its assets include a 60 million cubic feet per day gas processing plant with an additional 200 million cubic feet per day plant that should be in service by the end of this year.
TPG’s other investments in the sector have included Copano Energy, EnLink Midstream and Jonah Energy.
In 2017, TPG launched its first energy-focused vehicle, TPG Energy Solutions, which invested in Discovery alongside TPG Growth. TPG Growth has $13.2 billion worth of assets under management while TPG has $84 billion.
The Four Corners acquisition included 3,700 miles of pipeline, two gas processing plants and one carbon-dioxide treating facility. The assets generated $85 million in Ebitda last year and are forecast to be $82 million this year.
Williams CEO Alan Armstrong said in a statement that pressure on natural gas pricing from adjacent basins like the Permian demands a new model that consolidates and integrates production with infrastructure to optimize throughput and lower costs.
“We believe that Harvest is ideally positioned to achieve this integration and Williams can redeploy the proceeds into improved opportunities for growth,” he said.