Tallgrass Development’s Sale of Assets to Tallgrass Energy Partners and Merger with Tallgrass Equity


Baker Botts Represents Tallgrass Development on the transactions

Tallgrass Energy GP, LP (NYSE: TEGP) (“TEGP”) and Tallgrass Energy Partners, LP (NYSE: TEP) (“TEP”) announced that Tallgrass Development, LP (“TD”) merged with Tallgrass Equity, LLC (“Tallgrass Equity”), a subsidiary of TEGP (the “Merger”). As a result of the Merger, Tallgrass Equity acquired a 25.01 percent membership interest in Rockies Express Pipeline LLC (“REX”) and 5,619,218 TEP common units. In consideration, TEGP and Tallgrass Equity issued 27,554,785 unregistered TEGP Class B shares and Tallgrass Equity units valued at approximately $644.8 million based on the TEGP closing price on Feb. 6, 2018. The equity issued by TEGP and Tallgrass Equity was based on a discounted 30-day volume-weighted average price of TEGP Class A shares. The 25.01 percent REX membership interest was valued at approximately $400 million and the 5,619,218 TEP common units were valued at approximately $256.2 million based on a 30-day volume weighted average price.

The companies also announced that, prior to the Merger, TEP acquired a 2 percent membership interest in Tallgrass Pony Express Pipeline, LLC and other administrative assets from TD effective February 1, 2018 for cash consideration of approximately $60 million (the “Pony Transaction”). TEP funded the Pony Transaction with borrowings under its revolving credit facility.

Tallgrass Energy is a family of companies that includes publicly traded partnerships Tallgrass Energy Partners, LP (NYSE: TEP) and Tallgrass Energy GP, LP (NYSE: TEGP). Operating across 11 states, Tallgrass is a growth-oriented midstream energy operator with transportation, storage, terminal, water, gathering and processing assets that serve some of the nation’s most prolific crude oil and natural gas basins.

Baker Botts represented Tallgrass Development, LP with a team including Mollie Duckworth (Picture, Austin); Jennifer Wu (Associate, Austin); Allison Lancaster (Corporate), Mike Bresson (Partner, Houston); Jon Nelsen (Partner, Austin) and Leah Patrick (Tax).

Involved fees earner: Mollie Duckworth – Baker Botts; Jennifer Wu – Baker Botts; Allison Lancaster – Baker Botts; Michael Bresson – Baker Botts; Jon Nelsen – Baker Botts; Leah Patrick – Baker Botts;

Law Firms: Baker Botts;

Clients: Tallgrass Development, LP;

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Author: Ambrogio Visconti