PVR (PVR) to Acquire Chief Gathering in $1B Deal; Will Expand in Marcellus Shale Play
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Penn Virginia Resource Partners, L.P. (NYSE: PVR) announced that it has signed a definitive agreement to acquire Chief Gathering LLC for $1.0 billion. Chief Gathering, which is owned by Chief E&D Holdings LP ("Chief"), is a midstream pipeline company with operating assets serving Marcellus Shale natural gas producers primarily in northeastern Pennsylvania. This transaction, when closed, will result in a major expansion of PVR's pipeline systems in the gas-rich Marcellus Shale. PVR expects to finance the purchase through a combination of committed equity and debt. The transaction is expected to close in the second quarter of 2012, subject to regulatory clearances and other customary closing conditions.
The purchase price of $1.0 billion, subject to adjustments to reflect, among other things, a January 1, 2012 economic effective date of the acquisition, will be paid in a combination of cash and the issuance to Chief of $200 million in a new class of PVR limited partner interests ("Special Units"). The Special Units are substantially similar to PVR common units, except that the Special Units will not pay or accrue distributions until they automatically convert to common units, on a one-for-one basis once the Special Units have not received six consecutive quarterly distributions following issuance.
RBC Capital Markets served as PVR's exclusive financial advisor on the transaction and sole placement agent in the $180 million private placement of equity.
ARAD Energy served as exclusive financial advisor to Chief on the transaction.
The purchase price of $1.0 billion, subject to adjustments to reflect, among other things, a January 1, 2012 economic effective date of the acquisition, will be paid in a combination of cash and the issuance to Chief of $200 million in a new class of PVR limited partner interests ("Special Units"). The Special Units are substantially similar to PVR common units, except that the Special Units will not pay or accrue distributions until they automatically convert to common units, on a one-for-one basis once the Special Units have not received six consecutive quarterly distributions following issuance.
RBC Capital Markets served as PVR's exclusive financial advisor on the transaction and sole placement agent in the $180 million private placement of equity.
ARAD Energy served as exclusive financial advisor to Chief on the transaction.
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