Pipeline giant Energy Transfer buying Crestwood Equity Partners in unit-for-unit deal

By Steve Gelsi

Energy Transfer makes $7 billion deal for Crestwood's energy infrastructure in the Williston, Delaware and Powder River basins

Energy Transfer LP said Wednesday it would pay 2.07 common units for each unit of Crestwood Equity Partners LP in an all-equity deal valued at $7.1 billion, including the assumption of $3.3 billion of debt.

Based on Energy Transfer's (ET) closing unit price of $12.56 per unit on Tuesday, the deal values Crestwood Equity Partners (CEQP) at about $26 per unit, in line with its closing price of $26.19 on Tuesday.

Energy Transfer's units rose 2% on Wednesday, while Crestwood's rose 2.8%.

Energy Transfer said the deal includes the opportunity for Crestwood unit holders to participate in its targeted annual distribution-per-unit growth rate of 3% to 5%.

The deal is expected to close in the fourth quarter.

Crestwood Equity common unit holders will own about 6.5% of Energy Transfer's common units.

Crestwood's business includes gathering and processing infrastructure in the Williston, Delaware and Powder River basins in the central U.S. and south central Canada, including about 2 billion cubic feet per day of gas-gathering capacity, 1.4 billion cubic feet per day of processing capacity and 340,000 barrels per day of crude-gathering capacity.

Energy Transfer said the transaction is expected to immediately add to distributable cash flow per unit. It will also be neutral to Energy Transfer's leverage metrics upon closing.

-Steve Gelsi

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08-16-23 1155ET

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