Noble Midstream launches IPO

Picking up where it left off in November, Noble Energy’s subsidiary, Noble Midstream Partners LP, is taking another shot at an initial public offering.

Noble Midstream has commenced its initial public offering of 12,500,000 common units representing limited partner interests in Noble Midstream, at an anticipated initial public offering price between $19.00 and $21.00 per common unit, pursuant to a registration statement on Form S-1 filed with the US Securities and Exchange Commission. Noble Midstream expects to grant the underwriters a 30-day option to purchase up to an additional 1,875,000 common units at the initial public offering price. The common units are expected to trade on the New York Stock Exchange under the ticker symbol “NBLX.”

The common units being offered to the public represent an approximate 39.3% limited partner interest in Noble Midstream, or an approximate 45.2% limited partner interest if the underwriters exercise, in full, their option to purchase additional common units. Noble Energy Inc. and certain of its subsidiaries will own the remaining limited partner interest in Noble Midstream and all of its incentive distribution rights and will own Noble Midstream’s general partner.

At the midpoint, said Raymond James analysts in a note Wednesday, the price implies a valuation of approximately $636 million.

“Based on ~$73 million 2015 EBITDA, this implies a ~8.7x multiple, above our full company 2017 EBITDA multiple of 6.2x for Noble Energy. Noble currently has ~$7.9 billion in long-term debt with a cash balance of $1.3 billion. Proceeds from current transaction will likely boost Noble’s liquidity by ~$250 million.”

Noble Midstream Partners LP initially proposed an IPO in November 2015, but postponed the offering as a result of unfavorable equity market conditions.

This time around, the analysts are “optimistic that the IPO will be priced this time around” given a “slightly more stable environment.”

“The offering price implies an attractive market for Noble's midstream assets, despite continued commodity price headwinds, and validates the company's decision to spin-off these assets,” Raymond James analysts continued.

Barclays, Baird, JP Morgan, BofA Merrill Lynch, Citigroup, Deutsche Bank Securities, DNB Markets, Mizuho Securities, MUFG and Wells Fargo Securities are acting as book-running managers for the offering and Barclays and Baird are acting as structuring fee agents for the offering.

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