Tallgrass Energy Partners, LP (“Tallgrass”), announced today that it has entered into a purchase and sale agreement with Kinder Morgan Energy Partners, L.P. (NYSE: KMP) to buy Kinder Morgan Interstate Gas Transmission, Trailblazer Pipeline Company, the Casper-Douglas natural gas processing and West Frenchie Draw treating facilities in Wyoming, and KMP’s 50 percent interest in the Rockies Express Pipeline (“REX”).
Tallgrass will acquire these assets for a total cash consideration of approximately $1.8 billion. Including the proportionate amount of REX debt, this amount is equivalent to a value of $3.3 billion. The transaction, which is subject to Federal Trade Commission (FTC) approval, is expected to close in the fourth quarter. Tallgrass is owned by the management team of Tallgrass, Kelso & Company, and a limited group of investors led by The Energy & Minerals Group including Magnetar Capital.
Baker Botts represents The Energy & Minerals Group and serves as co-counsel to Kelso & Company.
Tallgrass is led by CEO, David G. Dehaemers Jr. Mr. Dehaemers previously served as CFO and EVP of corporate development at Kinder Morgan from 1997 to 2003. He served as the EVP of corporate development at Inergy, LP from 2003 to 2007 and was one of the owners of Inergy, LP’s general partner, NRGP, when it went public in 2005. In his career he has led more than $14 billion of midstream energy merger, acquisition and development opportunities.
The Energy & Minerals Group is the management company for a series of highly specialized private equity funds with total investor commitments of approximately $4.8 billion. EMG focuses on investing across various facets of the global natural resource industry including the upstream and midstream segments of the energy complex. Since inception in 2006, EMG has invested in 9 midstream energy transactions comprising approximately $2.6 Billion of equity capital.
Kelso & Company is one of the oldest and most established firms specializing in private equity. Since 1980, Kelso has invested in over 115 companies in a broad range of industry sectors with aggregate initial capitalization at closing of over $40 billion. Representative energy investments include: Buckeye GP Holdings L.P., CVR Energy, Inc., Crescent Point Energy Corporation, Hunt Marcellus LLC, Tervita, and Venari Resources LLC.
The Tallgrass Energy Partners news release is available here.
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