Deal Description: Hess Midstream Partners LP (NYSE: HESM) today announced execution of a definitive agreement to acquire Hess Infrastructure Partners LP (“HIP”), including HIP’s 80% interest in HESM’s oil and gas midstream assets, HIP’s water services business and the economic general partner interest and incentive distribution rights (“IDRs”) in HESM. Total consideration for the assets is valued at approximately $6.2 billion. HESM will assume approximately $1.15 billion of existing HIP debt, issue approximately 230 million HESM units to the sponsors collectively and pay to the sponsors collectively cash consideration of approximately $550 million. In addition, HESM’s organizational structure will be converted into a taxable “Up-C” structure in which IDR payments to sponsors are eliminated. Following the transaction, public shareholders will own 6% of the consolidated entity and each sponsor will own 47% of the consolidated entity.
The proposed transaction has been unanimously approved by the HESM Board and by a conflicts committee of the HESM Board comprised of independent directors.
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