Tidewater Midstream and Infrastructure Ltd. said Feb. 2 it has entered an agreement with AltaGas Ltd. to acquire Alberta Deep Basin Gas processing and gathering assets for stock and C$30 million (US$21.6 million) cash.
The assets include 100% working interest in select Deep Basin and central Alberta gas processing facilities and related infrastructure. The majority are located in Tidewater's core West Pembina region.
The facilities have a combined gross licensed natural gas processing capacity of about 490 million cubic feet per day (MMcf/d) and current throughput of about 102 MMcf/d.
The acquisition includes eight core facilities that are focused in the Deep Basin, located in proximity to Tidewater's Brazeau River Complex, which generated about 77% of the acquired assets' 2015 EBITDA.
The core facilities are located at Windfall/Kaybob, Marlboro/Edson, Alder Flats, Gilby, Manola, Bonnie Glenn, Malmo and Sylvan Lake.
In addition, the acquisition also includes more than 2,000 km (1,243 miles) of gathering pipelines and other associated infrastructure.
Under the terms of the deal, Tidewater will issue to AltaGas about 43.7 million Tidewater common shares and pay C$30 million in cash. The acquisition funded through cash on hand and availability under Tidewater's existing corporate credit facility.
Upon closing, AltaGas will own about 19.9% of the total issued and outstanding common shares of Tidewater. AltaGas will have the right to nominate one member to Tidewater's board of directors and the right to increase their related board nominees commensurate with ownership.
AltaGas has agreed to a standstill agreement to not acquire additional Tidewater common shares that would increase its ownership interest above 19.9% without the consent of Tidewater, the release said.
The acquisition is expected to close in the first quarter of 2016 and is subject to standard closing conditions customary for a transaction of this nature, including the approval of the TSX Venture Exchange.
Beacon Securities Ltd. is lead financial adviser to Tidewater for the transaction. Tidewater has also engaged CIBC Capital Markets as financial adviser and Macquarie Capital Markets as strategic adviser.
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