Targa to Acquire Atlas Energy, Atlas Pipeline for $7.7 Billion

By Brad Kramer October 14, 2014 View Profile

Atlas Energy LP and its midstream subsidiary, Atlas Pipeline Partners LP, are being sold off. Both companies have entered into definitive agreements to be acquired by Targa Resources Corp. and Targa Resources Partners LP, respectively, in a transaction valued at approximately $7.7 billion.

/*** Advertisement ***/

Targa Resources Corp. will acquire Atlas Energy immediately after it completes a distribution of its non-midstream assets, which include:

100 percent general partner interest and incentive distribution rights in its E&P subsidiary, Atlas Resource Partners LP;
80 percent general partner interest and incentive distribution rights, as well as an 8 percent limited partner interest, in Atlas Energy’ E&P Development Subsidiary;
16 percent general partner interest and 12 percent limited partner interest in Lightfoot Capital Partners, which has a 40 percent limited partner interest in Arc Logistics Partners LP, an independent U.S.-based energy logistics service provider; and
Net production of approximately 11.5 million cubic feet per day (MMcf/d) of natural gas production in the Arkoma basin in Oklahoma.

Following the distribution of these assets, Atlas Energy assets will consist of its interests in the general partner and incentive distribution rights in Atlas Pipeline Partners, as well as 5.8 million Atlas Pipeline Partners common units, which will be acquired by Targa Resources in a merger transaction with Atlas Energy for approximately $1.9 billion.

Concurrently with Targa Resources Corp.’s acquisition of Atlas Energy, Targa Resources Partners will acquire Atlas Pipeline Partners for total consideration of approximately $5.8 billion, which includes Atlas Pipeline Partners’ existing debt of $1.8 billion.

The boards of directors of Atlas Energy, Atlas Pipeline Partners, Targa Resources and Targa Resources Partners have each approved the respective merger agreements. Subject to customary approvals and conditions, the transactions are expected to close in the first quarter of 2015.