Brookfield Infrastructure strikes deal to acquire Niska Gas Storage

Niska Gas Storage Partners has entered into a definitive agreement to be acquired by Brookfield Infrastructure and its institutional partners, officials announced on Monday.

Under the terms of the acquisition agreement, Brookfield will acquire all of Niska's outstanding common units for $4.225/unit in cash and will acquire the managing member and the incentive distribution rights in Niska.

The transaction is valued at approximately $911.9 million, including the assumption of debt. Based on the closing unit price on June 12, the $4.225/unit purchase price represents a premium of approximately 222% to the trading price for the common units.

The closing of the deal is expected to occur in the second half of 2016 and is subject to customary closing conditions and regulatory approvals, including approval by the California Public Utilities Commission.

The agreement has already been approved by Niska`s board of directors. In addition, the Conflicts Committee of the Niska board has approved the deal.

Affiliates of Riverstone Investment Group LLC, owning common units representing about 53% total of the outstanding common units, have delivered a written consent approving the transaction. No additional unitholder action is required to approve the deal.

Niska says it may, for a limited period and subject to certain restrictions, discuss and negotiate with certain third parties regarding unsolicited alternative acquisition proposals. However, it would be required to provide Brookfield an opportunity to match any proposals and would be required to pay a termination fee and reimburse Brookfield`s expenses in order to enter into an alternative deal with a third party.

In connection with the entry into the merger agreement, Brookfield has committed to lend up to $50.0 million to Niska under a short-term credit facility to be used for working capital purposes. Brookfield`s commitment is subject to certain conditions, including the completion of definitive documentation and other conditions.

"Niska appreciates its equity holders` support over the years in assembling and operating some of the premier gas storage facilities in North America," said Bill Shea, CEO. "We look forward to Niska`s future association with Brookfield and continuing our world-class operation of the facilities."

Evercore Partners is acting as exclusive financial advisor to Niska and Riverstone and Vinson & Elkins LLP and Stikeman Elliot LLP are acting as legal advisors to Niska and Riverstone. Norton Rose Fulbright is acting as legal advisor to Brookfield.

Greenhill & Co. is serving as exclusive financial advisor to the Conflicts Committee of the Niska board and provided a fairness opinion on the deal, while Richards, Layton & Finger, P.A. is serving as legal counsel to the Conflicts Committee of the Niska board.

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