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MPLX has USD 14bn ANDX deal in the pipeline
Posted on Thursday, 09 May 2019 10:08
Marathon Petroleum’s MPLX is taking Andeavor Logistics (ANDX) private for an enterprise value of USD 14.00 billion to create a large-scale diversified midstream player with an integrated footprint from the Permian basin to the Gulf coast.
The total consideration of the deal at a 1.07x blended exchange ratio comprises an equity value of USD 9.00 billion and the assumption of USD 5.00 billion in debt and USD 600.00 million of preferred units.
Marathon already owns a 63.6 per cent limited partner interest in, and controls the general partner of, ANDX following its USD 35.60 billion acquisition of Andeavor in October 2018.
The latest agreement simplifies the Ohioan petroleum giant’s master limited partnerships (MLPs) into a single listed entity anchored by fee-based cash flows and expanded export capabilities.
On a pro forma 2019 financial basis, the midstream company will have a market capitalisation of USD 35.00 billion and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of USD 5.30 billion.
It will have a distributable cash flow of about USD 4.10 billion and a multiple of roughly 4.0x debt to EBITDA.
MPLX is a large-cap MLP that owns and operates midstream energy infrastructure and logistics assets and provides fuels distribution services.
The group’s portfolio includes a network of crude oil and refined product pipelines; an inland marine business; light-product and crude terminals; storage caverns; and refinery tanks, docks, loading racks, and associated piping.
It also owns crude oil and natural gas gathering systems and natural gas and natural gas liquids processing and fractionation facilities in key US supply basins.
Fee-based, full-service ANDX has assets across the western and mid-continent regions of the country and operates through three segments, namely terminal and transportation, gathering and processing, and wholesale.
The enlarged MPLX will be in a strategic position to capture more opportunities in the Permian and Marcellus basins.
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