The Energy & Minerals Group (EMG), 51% owner, and Laredo Petroleum, Inc. (Laredo), 49% owner, have announced that their affiliates have entered into a binding agreement to sell Medallion Gathering & Processing, LLC to an affiliate of Global Infrastructure Partners (GIP) for a cash purchase price of US$1.825 billion, plus additional cash consideration that is linked to GIP's realised profits at exit.
Funding of the base purchase price is expected to occur on or before 1 November 2017 and includes US$725 million of stapled debt financing provided by Jefferies LLC. There can be no assurance as to when and whether the additional cash consideration will be funded. All proceeds from the sale of Medallion will be distributed 51% to EMG and 49% to Laredo.
Medallion is a large crude oil transportation system in the Midland Basin of West Texas, with over 800 miles of pipeline, approximately 670,000 dedicated acres and total areas of mutual interest approaching four million acres. Medallion operates a newly-constructed crude oil gathering and transportation system that has been designed to support substantial volume growth and offers a differentiated service to a diverse mix of active, high quality producer customers by allowing them to access multiple Permian Basin long-haul takeaway pipelines and end-markets, providing them with flow assurance and enabling them to maximise realised pricing. For these and other reasons, Medallion is widely regarded as the leading source of crude oil transportation in the Midland Basin.
Medallion will retain its name and operate as a GIP Portfolio Company. The leadership team will remain in their current roles and are investing alongside GIP in this transaction. EMG will continue to own Medallion Delaware Basin, LLC. Both the Midland Basin and Delaware Basin systems will continue to be managed by the same leadership team.
Read the article online at: https://www.hydrocarbonengineering.com/refining/03102017/medallion-to-be-acquired-by-gip/