US LNG player New Fortress Energy is set to pounce on Brazil’s fast-growing gas-to-power market with the acquisition of Hygo Energy Transition, a joint venture of European developer Golar LNG and Stonepeak Infrastructure II, in a cash-and-stock deal with an enterprise value of $3.1 billion and a $2.18 billion equity value.
New Fortress will also take over Golar’s master limited partnership Golar LNG Partners in a cash deal with an enterprise value of $1.9 billion and an equity value of $251 million.
Skadden, Arps, Slate, Meagher & Flom is advising New Fortress in the transactions with a team led largely from New York that included Houston partner Eric Otness.
Also advising New Fortress are teams from Conyers Dill & Pearman and Watson Farley and Williams.
Vinson & Elkins is advising Hygo with a team led from Houston by partners David Oelman and Lande Spottswood with assistance from senior associate Jing Tong and associates Alex Lewis, Rob Vezina and Natalie Stanley. Partners Kaam Sahely of Houston and Austin and Shay Kuperman Houston, also advised, along with senior associate Nadine Amr of London and associates Steven Wilson (also of London), Caroline McDonald (Houston) and Louise Fischel-Bock (London) on energy transactions/projects.
Houston partner Matt Dobbins and associate Audrey Doane counseled on environmental matters, with; partner David D’Alessandro of Houston and Dallas and counsel Dario Mendoza of Dallas handling executive compensation and benefits.
Partners Gary Huffman of Washington, D.C. and Lina Dimachkieh of Houston, along with Houston associate Liz Snyder advised on tax, while Houston partner Sean Becker and counsel Martin Luff, who splits his time between Houston and London advised on labor and employment.
Houston partner John Michael counseled on maritime/offshore matters and partner Suzanne Clevenger, also of Houston, advised on energy regulatory matters.
Goldman Sachs is financial advisor to Hygo.
Baker Botts is representing Golar in the sale of its stake in the Hygo JV as well as the sale of its MLP.
The corporate team working the Hygo sale was led from Washington, D.C and New York, though Houston partner Jon Lobb and Dallas associate Snow Rui advised on tax matters.
For the MLP transaction, the corporate team was again based largely in Washington, D.C. ad New York, though it included Houston associate Daniel Jung.
Lobb and Rui again advised on tax matters for the MLP deal.
Akin Gump Strauss Hauer & Feld is acting as legal advisor to the conflicts committee of the MLP’s board of directors, which recommended approval of the deal.
The Akin Gump team was led by corporate partners John Goodgame and Lisa Hearn. They were joined by corporate counsel Mary Lovely and associate Alexander France; tax partner Jocelyn Tau; and, for antitrust aspects of the transaction, partners Davina Garrod and Gorav Jindal and counsel Victoria Yuan and Matthew Schmitten.
Deutsche Bank Securities is acting as financial advisor to the committee.
Simpson, Thacher, & Bartlett are acting as legal advisors to Stonepeak.
With the acquisition of Hygo, New Fortress will acquire an operating floating storage and regasification unit (FSRU) terminal and a 50% interest in a 1500-megawatt power plant in Sergipe, Brazil as well as two other FSRU terminals with 1200 megawatts of power in in Brazil. Hygo’s fleet consists of a newbuild FSRU and two operating LNG carriers. In exchange, it will pay $580 million in cash ancand 31.4 million shares of Class A common stock. Golar LNG Ltd will receive $50 million in cash and 18.6 million of the shares, while Stonepeak will receive $530 million in cash and 12.7 million shares.
With the MLP deal, the company will also acquire a fleet of six FSRUs, four LNG carriers and a 50% interest in Trains 1 and 2 of the Hilli floating liquefaction vessel. New Fortress will acquire all the outstanding common units of the MLP for $3.55 per common unit in cash.
“With a strong presence in Brazil and a world-class LNG shipping business, Hygo and GMLP are excellent additions to our efforts to accelerate the world’s energy transition,” said New Fortress chief executive Wes Edens, who is a co-owner of the Milwaukee Bucks. “The addition of Hygo will quickly expand our footprint in South America with three gas-to-power projects in Brazil’s large and fast-growing market. With GMLP, we gain LNG ships and world-class operators that are an ideal fit to support our existing terminals and robust pipeline.”
New Fortress is developing and currently operates a number of facilities around the globe, including ones in Jamaica and Puerto Rico. The company has been in the spotlight recently after federal regulators found last year that it had begun operations at the Puerto Rico facility without approval. New Fortress has defended itself, saying the facility does not fall under the commission’s jurisdiction.
The company has also recently drawn the ire of environmentalists for its plans to build an LNG export facility in New Jersey on the Delaware River.