Exit: Morgan Stanley Infra-backed Eureka completes exit to Equitrans and EQM Midstream


[Context: On April 10, Equitrans Midstream (NYSE: ETRN) and EQM Midstream Partners (NYSE: EQM) announced completing the acquisition of a 60% interest in Eureka Midstream and a 100% interest in Hornet Midstream for total consideration of $1.03bn, $860 million cash and $170 million assumed pro-rata debt. Further details, advisors and related links are below.]

EQM Midstream Partners Completes Strategic Acquisition of Eureka Midstream and Hornet Midstream; Closes $1.2 Billion Private Placement of Series A Convertible Preferred Units

PITTSBURGH–April 10, 2019–(BUSINESS WIRE)–Equitrans Midstream Corporation (NYSE: ETRN) and EQM Midstream Partners, LP (NYSE: EQM) today announced that EQM has completed the acquisition of a 60% interest in Eureka Midstream Holdings, LLC (Eureka Midstream) and a 100% interest in Hornet Midstream Holdings, LLC (Hornet Midstream) for total consideration of $1,030 million, comprised of approximately $860 million in cash and approximately $170 million of assumed pro-rata debt.

Concurrently, EQM closed the private placement of $1.2 billion of newly issued Series A Perpetual Convertible Preferred Units (Convertible Preferred Units). A portion of the net proceeds from the private placement was allocated to the cash purchase price of the acquisition, with the remaining net proceeds to be used for general purposes.

“We are pleased to have completed this important acquisition and our team is excited to begin integrating the Eureka and Hornet systems and leveraging our existing assets and core operating capabilities,” said Diana M. Charletta, chief operating officer of EQM. “We are relentless in our pursuit of becoming the low-cost provider and partner of choice across all aspects of our business. These value-enhancing assets will diversify our producer customer mix and increase exposure to wet Marcellus acreage; expand our supply hub and create additional commercial opportunities; reduce unit operating costs through increased scale; and accelerate opportunities for our water services business.”

Asset Overview

Eureka Midstream is a 190-mile gathering header pipeline system in Ohio and West Virginia that services both dry Utica and wet Marcellus production. Hornet Midstream is a 15-mile, high-pressure gathering system in West Virginia that connects to the Eureka system.


Citi and Guggenheim Securities, LLC acted as financial advisors and Latham & Watkins acted as legal advisor to ETRN and EQM. Citi and Guggenheim Securities, LLC also acted as joint placement agents for the Convertible Preferred Units issuance.

About Equitrans Midstream Corporation

Equitrans Midstream Corporation (ETRN) has a premier asset footprint in the Appalachian Basin and is one of the largest natural gas gatherers in the United States. With a rich 135-year history in the energy industry, ETRN was launched as a standalone company in 2018 and, through its subsidiaries, has an operational focus on gas gathering systems, transmission and storage systems, and water services assets that support natural gas producers across the Basin. ETRN is helping to meet America’s growing need for clean-burning energy, while also providing a rewarding workplace and enriching the communities where its employees live and work. ETRN owns the non-economic general partner interest and a majority ownership of the limited partner interest in EQM.

About EQM Midstream Partners

EQM Midstream Partners, LP (EQM) is a growth-oriented limited partnership formed to own, operate, acquire, and develop midstream assets in the Appalachian Basin. As one of the largest gatherers of natural gas in the United States, EQM provides midstream services to producers, utilities, and other customers through its strategically located natural gas transmission, storage, and gathering systems, and water services to support energy development and production in the Marcellus and Utica regions. EQM owns approximately 950 miles of FERC-regulated interstate pipelines and also owns and/or operates approximately 2,405 miles of high- and low-pressure gathering lines.

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