[Context: On January 7, Discovery Midstream Holdings II announced an $1bn initial equity commitment from Stonepeak Infrastructure Partners. Further details, advisors and related links are below.]
Discovery Midstream I was backed by TPG and exited through a sale to a joint venture between KKR and Williams (NYSE: WMB) for $1.3bn.
Discovery Midstream Holdings II LLC Secures $1.0 Billion Initial Equity Commitment From Stonepeak Infrastructure Partners
DALLAS, Jan. 7, 2019 /PRNewswire/ — Discovery Midstream Holdings II, LLC (“Discovery”), a producer-focused midstream company, announced today that it has received an initial equity commitment of up to $1.0 billion from Stonepeak Infrastructure Partners (“Stonepeak”), an infrastructure-focused private equity firm, to pursue a suite of North American midstream opportunities.
Headquartered in Dallas, Texas, Discovery is led by its four founding partners who have a successful track record of value creation in the midstream industry. The team includes Co-CEO’s Drew Chambers and Steven Meisel, CFO Daniel Sailorsand COO Cory Jordan. Discovery’s founding partners have profitably invested greater than $2.0 billion of equity into the midstream industry during their careers, having previously worked together at Discovery Midstream I and Wildcat Midstream Partners and independently at Regency Gas Services, Energy Transfer, TPG Capital and Riverstone Holdings.
Discovery will pursue a strategy targeting midstream assets within both private and public ownership structures, at various stages of maturity, and across the hydrocarbon value chain, including natural gas, natural gas liquids, and crude oil, with a focus on situations where outcomes can be influenced with Discovery’s expertise in operational and commercial optimization.
Steven Meisel, Co-CEO said, “Discovery could not be more excited to partner with the Stonepeak team, whom we have known for many years. We believe there is significant synergy in combining the complementary expertise of our respective organizations.” Co-CEO, Drew Chambers added, “We believe that now represents a unique and attractive time to invest in the U.S. midstream sector, supported by secular volumetric growth, historically depressed valuations, supportive structural changes in the public markets and limited new capital formation.”
Jack Howell, Senior Managing Director at Stonepeak, added, “The Discovery management team has demonstrated a strong track record of successful execution throughout different stages of the cycle, and we are excited to partner with them to pursue what we believe to be a broad set of midstream opportunities. We look forward to a productive long-term relationship and could not ask for a better market set-up.”
Hunton Andrews Kurth LLP was Stonepeak’s legal counsel. Kirkland & Ellis LLP was Discovery management’s counsel.
About Discovery Midstream Holdings II, LLC
Discovery Midstream Holdings II is a Dallas-based midstream company focused on maximizing value and providing outstanding service. We have expertise in developing grassroots projects, asset optimization, operating midstream assets, and providing related services in the major producing basins in the United States. Discovery’s management team has a proven track record with over 50 years of experience across the energy value chain, and we understand that our success is dependent on the success of the producers and partners we serve.
About Stonepeak Infrastructure Partners
Stonepeak Infrastructure Partners is an infrastructure-focused private equity firm headquartered in New York with $15 billion of assets under management. Stonepeak invests in long-lived, hard-asset businesses and projects that provide essential services to customers, and seeks to actively partner with high-quality management teams, facilitate operational improvements, and provide capital for growth initiatives.