The Energy & Minerals Group and Laredo Petroleum, Inc. today announced that their affiliates have entered into a binding agreement to sell Medallion Gathering & Processing, LLC to an affiliate of Global Infrastructure Partners for a cash purchase price of $1.825 billion, plus an additional cash consideration. Funding of the Base Consideration is expected to occur on or before November 1, 2017 and includes $725 million of stapled debt financing provided by Jefferies LLC.
Medallion is the largest privately-held crude oil transportation system in the Midland Basin of West Texas, with over 800 miles of pipeline, approximately 670,000 dedicated acres, and total areas of mutual interest approaching four million acres. Medallion operates a newly-constructed crude oil gathering and transportation system that has been designed to support substantial volume growth and offers a differentiated service to a diverse mix of active, high quality producer customers by allowing them to access multiple Permian Basin long-haul takeaway pipelines and end-markets, providing them with flow assurance, and enabling them to maximize realized pricing.
Medallion will retain its name and operate as a Global Infrastructure Partners Portfolio Company headquartered in Irving, Texas. The leadership team will remain in their current roles and are also investing in this transaction. EMG will continue to own Medallion Delaware Basin, LLC. Both the Midland Basin and Delaware Basin systems will continue to be managed by the same leadership team.
“This transaction is an exciting and transformational moment in Medallion’s evolution,” said Medallion President and CEO Randy Lentz. “Combining Medallion’s current team and best-in-class service with GIP’s financial strength and commitment to operational excellence will be the catalyst for further expansion of Medallion’s midstream infrastructure in the Permian Basin and ability to provide an even greater level of service to our producer customers.”