Targa Resources said Monday that it agreed to acquire Stakeholder Midstream for $1.25 billion in cash, expanding the Houston midstream services provider’s footprint in the Permian Basin. Latham & Watkins represented Targa with a national team led by Houston partners Ryan Maierson and James Garrett. Gerald Shrader has been Targa’s general counsel since December 2023.
Willkie Farr & Gallagher and Clifford Chance advised Stakeholder Midstream. Willkie’s Texas-based team was led by partner Sarah McLean in Houston. The Clifford Chance team was led by Houston partners Todd Lowther and Ty’Meka Reeves-Sobers.
San Antonio-based Stakeholder Midstream, which is sponsored by EnCap Flatrock Midstream, provides natural gas and crude gathering and processing with about 480 miles of natural gas pipelines. The company has about 180 million cubic feet per day of cryogenic natural gas processing and sour treating capacity, and its carbon capture activities generate 45Q tax credits.
“This acquisition is a nice bolt-on asset that has meaningful free cash flow supported by a stable to modestly growing volume profile with minimal capital needs and executed at an attractive valuation,” Targa CEO Matt Meloy said in news release.
Targa expects Stakeholder Midstream to generate adjusted free cash flow of about $200 million annually. The company plans to fund the acquisition through cash on hand and an existing $3.5 billion revolving credit facility. The deal is expected to close by March 31.
Latham Houston associates John Daywalt, Sam Spiers, Braydon Jones, Harrison Little, Dylan Brown, and Liem-Lucas Nguyen were part of the team that advised Targa. Other Houston lawyers who worked on the deal include Austin Pierce, Jim Cole, Hayden Rutledge, Mary Daniel Morgan, Heather Jäger, Robert Brown, James Robertson and Eugenio Cárdenas. Andrew Abokhair and Saúl Aguirre-Villarreal advised from Austin.
Other Latham lawyers who provided counsel for the transaction from Washington, D.C., include: Patrick Nevins, David Della Rocca, Jason Cruise, Peter Todaro, Mary Casale, Catherine Yao, Seamus Ronan and Jean Hyun.
From New York, Sandra Benjamin, Jocelyn Wexler, Eric Leon, Sarah Burackand and Monica Calce. In California, Aaron Friberg in San Diego, with Joshua Marnitz, Zac Alpert, Harrison White and Enrique Covarrubias in Los Angeles. And from Chicago Benjamin Gelfand.
Willkie’s team included partners Robert Jacobson (Houston) and Scott Thompson (San Francisco), counsel Britton Davis (Washington, D.C.) and Jonathan Konoff (New York), as well as associates John Hunt (Dallas), Katherine Lubrano (Houston), David Mohl (Washington, D.C.) and Kim Aquino (New York).
RBC Capital Markets is serving as Targa’s financial advisor. Jefferies is exclusive financial advisor to Stakeholder.