Editor's note: This is a breaking news article. Additional details have been added regarding The Energy & Minerals Group's divestiture.
Plains All American Pipeline has entered into three bolt-on acquisitions— including the purchase of Eagle Ford infrastructure from EnCap Flatrock Midstream (EFM)— for $725 million.
Plains M&A moves include signing a definitive agreement to acquire EnCap Flatrock’s Ironwood Midstream Energy, which owns an Eagle Ford Basin gathering system, for approximately $475 million. The transaction is expected to close in the first quarter of 2025 following satisfaction of customary closing conditions. Plains also agreed to purchase 18% of its Series A preferred units owned by EnCap Flatrock for $330 million.
Plains also said that effective Jan. 1, a subsidiary of Plains Permian Basin joint venture, Plains Oryx Permian Basin LLC, acquired Medallion Midstream’s Delaware Basin crude oil gathering business from The Energy & Minerals Group for approximately $160 million—$105 million net to Plains’ interest. The portfolio company that owns over 140 miles of crude oil pipelines and approximately 106,000 bbl of crude oil storage capacity in the core of the southern Delaware Basin
Plains also said that its subsidiary acquired the remaining 50% interest in Midway Pipeline LLC from a subsidiary of CVR Energy for approximately $90 million on Dec. 23.
"The bolt-on acquisitions announced today are an excellent strategic fit for Plains and allow us to progress our efficient growth strategy by adding high-quality assets adjacent to our existing integrated footprint," said Willie Chiang, Chairman and CEO of Plains. "Importantly, these transactions create immediate value by delivering sustainable accretion to earnings, distributable cash flow and accelerating return of capital to unitholders. Our capital allocation framework remains intact, and we remain committed to financial flexibility, capital discipline, generating meaningful free cash flow and increasing return of capital to our unitholders as demonstrated today."
EFM Managing Partner Gregory C. King said the company’s focus is to be good partners, “good stewards of our investors’ capital, and build great assets. We look forward to continuing to execute on that vision as we look ahead to the remainder of this year and beyond.”
RBC Capital Markets served as financial adviser and Haynes Boone as legal adviser to Ironwood Midstream, and Wilkie Farr & Gallagher as EnCap Flatrock’s legal adviser. Piper Sandler served as financial adviser and Vinson & Elkins served as legal adviser to Plains All American.
Greenhill, a Mizuho affiliate, acted as sole financial adviser to EMG and Medallion. Locke Lord LLP acted as the principal legal adviser to EMG and Medallion.