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EQM Midstream Partners Closes Acquisition of Interest in Eureka Midstream, Hornet Midstream
Friday 12 April 2019

12 April 2019 - Pittsburgh, US-based Equitrans Midstream Corp. (NYSE: ETRN) has partnered with EQM Midstream Partners LP (NYSE: EQM) to acquire, from a fund managed by Morgan Stanley Infrastructure Partners interest in Eureka Midstream Holdings and Hornet Midstream Holdings, the company said.

Equitrans and EQM have acquired a 60% interest in Ohio and West Virginia, US-based pipeline system Eureka Midstream Holdings, LLC and a 100% interest in West Virginia, US-based high-pressure gathering system Hornet Midstream Holdings, LLC.

Eureka Midstream was acquired for total consideration of USD 1,030m, comprised of approximately USD 860m in cash and approximately USD 170m of assumed pro-rata debt.

EQM will fund the acquisition with cash proceeds from the issuance of USD 1,100m of newly issued series A convertible Preferred Units.

EQM said these assets will complement EQM's basin-leading gathering and transmission system, allowing us to continue being the low-cost provider for gas transportation and, increasingly, for water handling as well.

Combined, the gathering system assets and complementary water services opportunities are expected to generate approximately USD 100m of EQM EBITDA during the first twelve months.

EQM Midstream Partners, LP is a growth-oriented limited partnership formed to own, operate, acquire, and develop midstream assets in the Appalachian Basin.

As one of the largest gatherers of natural gas in the United States, EQM provides midstream services to producers, utilities, and other customers through its strategically located natural gas transmission, storage, and gathering systems, and water services to support energy development and production in the Marcellus and Utica regions.

Citi and Guggenheim Securities, LLC are acting as financial advisors and Latham and Watkins is acting as legal advisor to ETRN and EQM. Citi and Guggenheim Securities, LLC are also acting as joint placement agents for the convertible Preferred Units issuance.
Date Published: 12/04/2019
Target: Eureka Midstream Holdings and Hornet Midstream Holdings/stake
Country: USA
Deal Size: 1.03bn (USD)
Sector: Petroleum/Natural Gas/Coal
Type: JV
Financing: Cash and Stock
Status: Closed
Vendor: Fund managed by Morgan Stanley Infrastructure
Buyer: Equitrans Midstream/ EQM Midstream Partners
Buyer Advisor: Citi , Guggenheim Securities , Latham and Watkins