KKR today announced that it has entered into an agreement to acquire
Discovery Midstream ("Discovery") from TPG Growth for approximately $1.2
billion. KKR is acquiring the provider of natural gas and oil gathering
and natural gas processing services company through a newly formed joint
venture with Williams (NYSE:WMB). The transaction is being funded
primarily through KKR's energy and infrastructure funds.
Founded in 2015 and based in Dallas, Texas, Discovery operates in the
southern portion of Colorado's Denver-Julesburg Basin ("DJ Basin"). The
company's infrastructure and related facilities are strategically
located across more than 250,000 dedicated acres primarily in Weld and
Adams counties. The Discovery system includes both natural gas and crude
oil gathering pipelines, cryogenic gas processing, liquids handling and
crude oil storage. The Discovery assets include a 60 million cubic feet
per day (MMcf/d) gas processing plant with an additional 200 MMcf/d
plant that is fully permitted and under construction. It is expected to
be in service by the end of 2018.
"We are excited to partner with Williams in the acquisition of
Discovery," said James Cunningham, Managing Director on KKR's Energy and
Infrastructure team. "The Discovery team has built a strong gathering
and processing infrastructure footprint to service growing production in
the DJ Basin and Williams is well known as a safe and reliable operator
of large-scale G&P systems in the Rockies. This fits well with our
long-term focus on partnering with top-tier operators who prioritize
operational excellence and stakeholder engagement when working on
premier North American midstream infrastructure assets. We look forward
to supporting the continued growth of Discovery alongside management and
Williams for many years to come."
Upon close, which is subject to customary closing conditions and
expected to occur in the third quarter of 2018, Discovery will be led by
its existing management team and Williams' initial economic contribution
and ownership will be 40 percent of the purchase price, while KKR's
initial economic contribution and ownership will be 60 percent of the
purchase price. Williams will be the operator of Discovery and will hold
a majority of governance voting rights. Williams has committed to fund
additional capital as required to bring its economic ownership to 50/50.
"We are pleased to partner with KKR on this outstanding acquisition
opportunity," said Alan Armstrong, Williams' President and CEO. "As one
of the premiere providers of large-scale energy infrastructure with
operations across the natural gas value chain, we look forward to
serving the Discovery customers in this growing basin with our
industry-leading midstream services and working with KKR, whose energy
and infrastructure investments and strategic partnerships are well-known
and highly regarded."
"We're thrilled to be partnering with KKR and Williams, two leading
institutions that will further support our growth in the DJ Basin. We
look forward to continuing to safely deliver for our customers and the
community alongside our new partners," said Discovery CEO Steven Meisel.
Simmons acted as the lead financial adviser to KKR and Williams and
Simpson Thacher & Bartlett served as legal adviser to KKR.
KKR is a leading global investment firm that manages multiple
alternative asset classes, including private equity, energy,
infrastructure, real estate, credit and, with its strategic partners,
hedge funds. KKR aims to generate attractive investment returns by
following a patient and disciplined investment approach, employing
world-class people, and driving growth and value creation with KKR
portfolio companies. KKR invests its own capital alongside its partners'
capital and provides financing solutions and investment opportunities
through its capital markets business. References to KKR's investments
may include the activities of its sponsored funds. For additional
information about KKR & Co. Inc. (NYSE: KKR), please visit KKR's website
at www.kkr.com and
on Twitter @KKR Co.
About Discovery Midstream
Based in Dallas, Discovery is a full-service midstream company focused
on maximizing value and providing outstanding service to producers.
Discovery's management team has more than 100 years of experience in
developing grassroots projects, optimizing assets and providing related
services in the major producing basins in the United States. For more
information, please visit www.discoverymidstream.com.
About Williams & Williams Partners
Williams (NYSE: WMB) is a premier provider of large-scale infrastructure
connecting U.S. natural gas and natural gas products to growing demand
for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams
owns approximately 74 percent of Williams Partners L.P. (NYSE: WPZ).
Williams Partners is an industry-leading, large-cap master limited
partnership with operations across the natural gas value chain including
gathering, processing and interstate transportation of natural gas and
natural gas liquids. With major positions in top U.S. supply basins,
Williams Partners owns and operates more than 33,000 miles of pipelines
system wide - including the nation's largest volume and fastest growing
pipeline - providing natural gas for clean-power generation, heating and
industrial use. Williams Partners' operations touch approximately 30
percent of U.S. natural gas. www.williams.com
About TPG Growth
TPG Growth is the middle market and growth equity investment platform of
TPG, the global alternative asset firm. With approximately $13.2 billion
of assets under management, TPG Growth targets investments in a broad
range of industries and geographies. TPG Growth has the deep sector
knowledge, operational resources, and global experience to drive value
creation, and help companies reach their full potential. The firm is
backed by the resources of TPG, which has approximately $84 billion of
assets under management. For more information, visit www.tpg.com.
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Kristi Huller or Cara Major, 212-750-8300
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