Summit Midstream Partners LP’s (NYSE: SMLP) wholly owned subsidiary, Bison Midstream LLC, will acquire the equity interests of certain subsidiaries of Summit Midstream Partners LLC (Summit Investments) for total cash consideration of $255 million. The acquisition is expected to close before May 31.
The assets to be acquired include certain crude oil and produced water gathering systems and transmission pipelines located in the Williston Basin (the Polar & Divide system). Subject to the achievement of certain development milestones, SMLP will also have a six-month option to acquire a crude oil transmission project currently under development in the Williston Basin (the Stampede Lateral) from a subsidiary of Summit Investments for an additional $35 million.
Additionally, Summit Midstream Partners has begun an underwritten public offering of 6,500,000 common units representing limited partner interests in SMLP pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission. The underwriters will be granted a 30-day option to purchase up to an additional 975,000 common units.
SMLP intends to use the net proceeds from this offering to fund a portion of the purchase price of its pending acquisition of all of the issued and outstanding membership interests in Polar Midstream LLC and Epping Transmission Co. LLC. If the acquisition is not consummated for any reason, SMLP intends to use the net proceeds from the offering for general partnership purposes, including the repayment of borrowings under its revolving credit facility.
Barclays, BofA Merrill Lynch, Goldman, Sachs & Co., Morgan Stanley, Wells Fargo Securities, Baird, Citigroup, Deutsche Bank Securities, and RBC Capital Markets are acting as joint book-running managers for the offering.