“The transaction with
“For Apache, this is a very strategic transaction with a world-class partner at an attractive valuation. Since our discovery of
“This transaction facilitates the allocation of Apache’s capital to the development of the vast
Kevin McCarthy, chairman of the board of directors of KAAC, stated, “We are very excited to partner with Apache to form Altus Midstream. This transaction fits all the criteria we outlined at the time of KAAC’s initial public offering and creates a pure-play, Permian-focused midstream C-corp. We believe investors will appreciate the clear alignment of interests between Altus Midstream and Apache as well as the company’s investor-friendly structure. Altus Midstream does not have incentive distribution rights and is well positioned to execute on its growth plans. We look forward to working with our partners to create value for Altus Midstream’s shareholders.”
Brian Freed, Apache’s senior vice president, Midstream and Marketing, who will become the chief executive officer of the new company, said, “We are launching Altus Midstream with the support and financial strength of Apache and Kayne Anderson, two highly respected industry leaders. We have a strong growth platform at
“Altus Midstream expects to have more than
Altus Midstream assets
The Altus Midstream assets include rich-gas processing plants with inlet capacity of 380 million cubic feet (MMcf) per day, lean-gas treating and compression plants with inlet capacity of 400 MMcf per day, 123 miles of gathering pipelines, and 55 miles of processed gas pipelines with three market connections. By the end of 2020, Altus Midstream plans to add 1 Bcf per day of cryogenic, rich-gas processing.
Additionally, Altus Midstream will hold options to purchase equity ownership in five planned pipelines, including:
Other transaction details
Altus Midstream will have an estimated market capitalization of
KAAC has entered into agreements to sell approximately 57.2 million shares of its Class A common stock at a price of
Altus Midstream will be structured as a C-corp with no incentive distribution rights. Cash-on-hand, additional follow-on funding, and future internally generated cash will be used to fund the ongoing build-out of midstream infrastructure at
With a planned effective date of
Upon closing, Apache and Altus Midstream will enter into an agreement pursuant to which Apache will provide construction, operations and maintenance services for Altus Midstream.
The transaction is subject to approval by KAAC shareholders, as well as other customary closing conditions. Closing is expected in the fourth quarter of 2018, at which time KAAC will trade on the NASDAQ under the name
Conference call and additional materials
Apache and KAAC will host a conference call to discuss the transaction at
Additional materials including a supporting presentation for Altus Midstream are also available for download on Apache’s website at www.apachecorp.com and investor.apachecorp.com and on KAAC’s website at www.kaynespac.com.
Kayne Anderson, founded in 1984, is an alternative investment management firm. As of
This news release includes certain statements that may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about Apache’s and KAAC’s ability to effect the transactions discussed in this news release; the benefits of the transactions; the future financial performance of Altus Midstream following the transactions; changes in Altus Midstream’s or Apache’s strategy, future operations, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management. These forward-looking statements are based on information available as of the date of this news release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Apache’s or KAAC’s views as of any subsequent date, and neither Apache nor KAAC undertakes any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, Apache’s and Altus Midstream’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: (i) the occurrence of any event, change or other circumstances that could delay the transactions or give rise to the termination of the definitive agreements relating to the transactions; (ii) the outcome of any legal proceedings that may be instituted against Apache or KAAC following announcement of the proposed transactions; (iii) the inability to complete the transactions due to the failure to obtain approval of the stockholders of KAAC, or other conditions to closing in the definitive agreements relating to the transactions; (iv) the risk that the proposed transactions disrupts current plans and operations of KAAC or Apache as a result of the announcement and consummation of the proposed transactions; (v) KAAC’s and Apache’s ability to realize the anticipated benefits of the transactions, which may be affected by, among other things, competition and the ability of Altus Midstream to grow and manage growth profitably following the transactions; (vi) costs related to the transactions; (vii) changes in applicable laws or regulations; and (viii) the possibility that Altus Midstream or Apache may be adversely affected by other economic, business, and/or competitive factors.
No offer or solicitation
This news release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed transactions or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Important information for investors and stockholders
In connection with the proposed transaction, KAAC intends to file a proxy statement with the SEC. The definitive proxy statement and other relevant documents will be sent or given to the stockholders of KAAC and will contain important information about the proposed transaction and related matters. KAAC’s stockholders and other interested persons are advised to read, when available, the proxy statement in connection with KAAC’s solicitation of proxies for the meeting of stockholders to be held to approve the transaction because the proxy statement will contain important information about the proposed transaction. When available, the definitive proxy statement will be mailed to KAAC’s stockholders as of a record date to be established for voting on the transaction. Stockholders will also be able to obtain copies of the proxy statement, without charge, once available, at the SEC’s website at www.sec.gov.
Participants in the solicitation
KAAC and its directors and officers may be deemed participants in the solicitation of proxies of KAAC’s stockholders in connection with the proposed transaction. KAAC stockholders and other interested persons may obtain, without charge, more detailed information regarding the directors and officers of KAAC in its Annual Report on Form 10-K for the year ended
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Source: Apache Corporation