SAN FRANCISCO & FORT WORTH, Texas–(BUSINESS WIRE)–TPG Growth, the middle market and growth equity platform of alternative asset firm TPG, announced today it has signed a definitive agreement to sell Discovery Midstream (“Discovery”) to a newly-formed joint venture between KKR and Williams (NYSE: WMB) for approximately $1.2 billion. The transaction is expected to close in the third quarter and is subject to customary closing conditions.
Discovery is a provider of oil and natural gas gathering and natural gas processing services in the southern portion of Colorado’s Denver-Julesburg Basin. The company’s infrastructure and related facilities are strategically located across more than 250,000 dedicated acres primarily in Weld and Adams counties. Discovery was established in 2015 by a group of seasoned industry executives.
“Over the last year, Discovery has had tremendous operational and commercial success in expanding its systems and growing its customer base,” said Christopher Ortega, Partner at TPG. “It’s been a pleasure to work with the Discovery team, who we’ve known and respected for many years. We are grateful for their partnership.”
The Discovery system includes both natural gas and crude oil gathering pipelines, cryogenic gas processing, liquids handling, and crude oil storage. 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.
“Working with TPG, we’ve taken meaningful steps in growing our platform in the DJ Basin, furthering our objective of providing superior service and maximum value for our producer customers,” said Steven Meisel, Co-Founder of Discovery. Drew Chambers, Co-Founder of Discovery, continued, “We are thankful for TPG’s support over the last year. Looking ahead, we are excited by the complementary capabilities of the KKR/Williams partnership and Williams’ record as a safe and reliable operator to further grow these assets.”
TPG’s energy team has a long history of partnering with leading companies and strong management teams across the energy value chain. Focused on building strategic platforms with significant growth potential, the team’s investments have included Copano Energy, EnLink Midstream, and Jonah Energy. In 2017, TPG launched its first energy-focused vehicle, TPG Energy Solutions. TES invested in Discovery alongside TPG Growth.
Vinson & Elkins served as legal advisor and Jefferies acted as financial advisor to TPG Growth.
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.
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
KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit and, through 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.
Erika White, (415) 743-1550