Kinetik Holdings Inc. announced the sale of its 27.5% equity interest in EPIC Crude Holdings, LP to a subsidiary of Plains All American Pipeline, L.P.
The transaction involves an upfront cash payment of $500 million and a contingent cash payment of $96 million.
Proceeds from the sale will be used for general corporate purposes.
Divestment Details
Kinetik sells its equity interest in EPIC Crude Holdings, LP for $500 million upfront and a contingent cash payment of $96 million.
Valuation Implications
The transaction values 100% of EPIC Crude at $2.85 billion and includes a $350 million contingent consideration.
Strategic Focus
The divestment aligns with Kinetik's strategy to maximize shareholder value through asset sales and investment in growth projects.
- The sale provides Kinetik with significant proceeds that can be reinvested in strategic initiatives and potential shareholder returns.
- It allows Kinetik to streamline its asset portfolio and focus on core operations in the Permian-to-Gulf Coast midstream sector.
The divestment of Kinetik's equity interest in EPIC Crude Holdings signifies a strategic move to enhance shareholder value and focus on core operations. The sale proceeds present opportunities for reinvestment in growth projects and shareholder returns.