Michael Fitzsimmons • 40 Comments
Jul. 16, 2015, 7:25 AM
- Genesis Energy (NYSE:GEL) agrees to acquire the offshore pipeline and service business of Enterprise Products Partners (NYSE:EPD) for ~$1.5B.
- The business serves deepwater fields in the Gulf of Mexico, and assets include 2,350 miles of offshore crude oil and natural gas pipelines and six offshore hub platforms.
- GEL says the acquisition should be immediately accretive to cash available for distribution and improve the company's credit metrics over time.
- EPD expects to record ~$100M, or $0.05/unit, in non-cash asset impairment and related charges.
- To help fund the deal, GEL announces public offerings of 9M common units and $750M of senior unsecured notes due 2022 (I, II).
Jul. 13, 2015, 6:57 PM
- U.S. midstream MLPs rallied today following the news that MarkWest Energy (NYSE:MWE) was acquired by MPLX (NYSE:MPLX), as the deal is seen as a validation of the long-term demand potential for U.S. natural gas liquids infrastructure despite current depressed prices.
- Among today's gainers in the group: GEL +3.7%, DPM +3.3%, OKS +2.6%, NGLS +2.5%.
- SunTrust's Tristan Richardson believes the deal is particularly bullish for Enterprise Products Partners (NYSE:EPD), since speaks to the long term potential for the NGL market and the buildout of NGL infrastructure to new sources of market demand, where EPD is a leader with significant organic growth opportunities.
- MPLX fell 14.5% today, as investors worry that adding a nat gas company to MPLX, which had been growing rapidly, could hurt growth and add more volatility to earnings; however, many analysts believe the deal is a safe bet for MPLX because the company is diversifying its sources of income to help it survive the ups and downs of the commodity cycles.
Jul. 22, 2013, 5:36 PM
Genesis Energy (GEL) expands its marine business by acquiring all assets of the downstream transportation business of Hornbeck Offshore Services (HOS) for $230M. The business consists primarily of nine barges and nine tug boats which transport crude oil and refined petroleum products. GEL expects the acquisition to be immediately accretive to its distributable cash flow.| Jul. 22, 2013, 5:36 PM