Oneok to acquire GIP interest in EnLink Midstream for $14.90 per unit

Oneok (OKE) announced that it has executed a definitive agreement with Global Infrastructure Partners under which Oneok will acquire GIP’s entire interest in EnLink Midstream (ENLC), consisting of 43% of EnLink’s outstanding common units for $14.90 per unit and 100% of the interests in the managing member for $300M, for total cash consideration of approximately $3.3B. Oneok and GIP also entered into a separate definitive agreement under which Oneok will acquire from GIP all of the equity interests in Medallion Midstream, the largest privately held crude gathering and transportation system in the Permian’s Midland Basin, for $2.6B in cash representing approximately 6.3 times estimated 2025 EBITDA, including expected base case run-rate synergies. $300M of the total $3.3B purchase price for the EnLink interests is for GIP’s 100% interest in the managing member of EnLink. GIP’s common units in EnLink are being purchased for a total value of $3B, or $14.90 per unit, representing a premium of 12.8% to EnLink’s closing market price as of Aug. 27. As a result of the transaction with GIP, EnLink will be a consolidated subsidiary of Oneok for GAAP financial reporting purposes. After the closing of the purchase of GIP’s interests in EnLink, Oneok intends to pursue the acquisition of the publicly held common units of EnLink in a tax-free transaction. The fully combined Oneok and EnLink asset bases would be expected to enhance synergies, reduce leverage and increase accretion to ONEOK shareholders. In addition, a combination with Oneok is expected to give EnLink unitholders access to Oneok’s stock which is part of the S&P 500. Oneok has obtained financing commitments from JPMorgan Chase Bank, N.A. and Goldman Sachs Bank USA to provide up to $6B to fund the aggregate cash consideration and other expenses in connection with the EnLink and Medallion transactions. Both transactions have been unanimously approved by Oneok’s board of directors. The transactions are not cross conditional and are expected to close early in the fourth quarter of 2024. The closing of each transaction is subject to customary closing conditions, including Hart-Scott-Rodino Act clearance. Upon closing of the EnLink transaction, Oneok will have control of EnLink’s managing member and intends to replace the board members currently designated by GIP with new board members designated by Oneok. Oneok will maintain its headquarters in Tulsa, Oklahoma, and intends to retain a meaningful employee presence in the Dallas and Houston metropolitan areas.