Preparing a Midstream Company for a Successful Post-Pandemic Exit

A primary goal for financial sponsors is working with their portfolio company management teams to maximize their financial return on investment through a carefully orchestrated portfolio company exit. Some of the sponsor’s most important, and often most difficult, decisions relate to the timing and method of exiting an investment, which can significantly impact portfolio company returns. Planning a successful exit strategy is a complex process that requires careful advance planning as well as the resources and expertise of legal and financial advisors with proven track records.

The recent decline in merger and acquisition activity across the energy value chain and in particular in the previously redhot midstream sector – resulting from several factors, including the COVID-19 pandemic and related shutdowns, depressed commodity prices and election year regulatory uncertainty – has limited the viable exit opportunities for most sponsor-backed midstream oil, gas or water portfolio companies in the near term.