October 03, 2024 [PR Newswire]- Tailwater Capital LLC, an energy and environmental infrastructure private equity firm, today announced that it has entered into definitive agreements with Summit Midstream Corporation and its wholly owned subsidiary Summit Midstream Partners, LP, whereby Summit will acquire Tall Oak Midstream Operating, LLC and its subsidiaries (collectively, “Tall Oak” or “Tall Oak Midstream III”) for a total consideration of approximately $450 million. Consideration is comprised of $155 million in cash, approximately 7.5 million shares of a combination of SMC Class B common stock and common units of the Partnership (in an Up-C structure), representing approximately 40% ownership in the pro forma company, and up to $25 million contingent consideration in cash over certain measurement periods through March 31, 2026.
The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions, shareholder approval and regulatory approvals. Upon closing, four directors appointed by Tailwater Capital will serve on the pro forma Summit Board.
Tall Oak is a leading, large-scale gas gathering and processing system in the Arkoma Basin comprised of two 220 million cubic feet per day (“MMcf/d”) natural gas processing plants and approximately 244 miles of low-pressure natural gas gathering lines, 167 miles of high-pressure natural gas gathering lines and 65,000 horsepower of field and plant compression.
“This transaction represents a unique opportunity to partner with the Summit organization to support the long-term growth and value creation initiatives already underway at the Company,” said Jason Downie, Co-Founder and Managing Partner at Tailwater. “The Tall Oak assets are complementary to Summit’s existing gas portfolio, and we believe the Company is well positioned to drive even more value for shareholders over the coming years.”
“Our entire Tall Oak team has done an exceptional job delivering high-quality service while prioritizing reliability and safety, and I am confident that the Summit team will continue to execute and capitalize on new and exciting opportunities in the Arkoma Basin,” said Ryan Lewellyn, President and Chief Executive Officer at Tall Oak Midstream. “Tailwater has been an invaluable partner for our business, and we are excited to continue to work with Tailwater, not only on the transition of Tall Oak to Summit but also on future potential projects under the Tall Oak name.”
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