8-KAcquisitions & DispositionsMaterial AgreementsFinancial Events+2

Targa Resources Corp. 8-K Report, Material Agreement (Mar 4, 2015)

Filed March 4, 2015For Securities:TRGP

Summary

Targa Resources Corp. (TRC) has filed an 8-K report detailing the completion of significant transactions on February 27, 2015. These include the acquisition of Atlas Energy, L.P. (ATLS) through a merger and the acquisition of Atlas Pipeline Partners, L.P. (APL) through another merger. The company also completed a spin-off of certain ATLS assets into Atlas Energy Group, LLC (AEG). These transactions were financed, in part, by a new $1.1 billion credit facility entered into on February 27, 2015, comprising a $670 million revolving credit facility and a $430 million term loan facility. The acquisition of ATLS involved issuing approximately 10.1 million shares of TRC common stock and paying $515 million in cash to ATLS unitholders and equity award holders. The acquisition of APL involved issuing approximately 58.6 million TRP common units and paying $128 million in cash to APL unitholders and equity award holders. This marks a significant expansion for Targa Resources, integrating the operations and assets of both ATLS and APL into its existing structure.

Key Highlights

  • 1Completion of the ATLS merger, wherein Targa Resources Corp. acquired Atlas Energy, L.P. for a mix of stock and cash.
  • 2Completion of the APL merger, wherein Targa Resources Partners LP acquired Atlas Pipeline Partners, L.P. for a mix of units and cash.
  • 3Incurrence of a new $1.1 billion credit facility, consisting of a $670 million revolving credit facility and a $430 million term loan facility, to finance the acquisitions and refinance existing debt.
  • 4The Term Loan Facility was fully drawn on the closing date, while the Revolving Credit Facility is available for working capital and general corporate purposes.
  • 5The credit facility is secured by a first priority lien on substantially all of the Company's and its subsidiary guarantors' assets.
  • 6The ATLS merger consideration included 0.1809 shares of TRC common stock and $9.12 in cash per ATLS common unit.
  • 7The APL merger consideration included 0.5846 TRP common units and $1.26 in cash per APL common unit.

Frequently Asked Questions

The main transactions announced are the completion of two mergers: Targa Resources Corp.'s acquisition of Atlas Energy, L.P. (ATLS) and Targa Resources Partners LP's acquisition of Atlas Pipeline Partners, L.P. (APL). Additionally, a spin-off of certain ATLS assets into Atlas Energy Group, LLC was completed prior to the mergers.

The acquisitions were financed in part by a new five-year $670 million revolving credit facility and a seven-year $430 million term loan facility, totaling $1.1 billion. Proceeds were used to finance the ATLS merger, refinance existing indebtedness, and pay associated fees and expenses.

The new credit facility provides Targa Resources Corp. with a $670 million revolving credit facility and a $430 million term loan facility. The term loan was fully drawn at closing. The revolving credit facility is available for working capital and general corporate purposes, with provisions for letters of credit and swing line loans. The facility is secured by a first priority lien on substantially all of the company's and its subsidiary guarantors' assets.

For the ATLS merger, each common unit received 0.1809 shares of TRC common stock and $9.12 in cash. For the APL merger, each common unit received 0.5846 TRP common units and $1.26 in cash.