PROPOSED BUSINESS COMBINATION: ALTUS MIDSTREAM COMPANY
ESTIMATED CURRENT FUNDS in TRUST: $ 380.7 Million
CURRENT PER SHARE REDEMPTION PRICE: $10.09
IMPLIED ENTERPRISE VALUE: $2.624 Billion
Kayne Anderson Acquisition Corp. announced an agreement pursuant to which Apache will contribute its midstream assets at Alpine High to Altus Midstream LP, a partnership jointly owned by Apache and KAAC. At closing, KAAC will be renamed Altus Midstream Company. Altus Midstream will be structured as a C-corporation anchored by substantially all of Apache’s gathering, processing and transportation assets at Alpine High, a world-class, unconventional resource play in the Delaware Basin. The company will also own options for equity participation in five gas, NGL and crude oil pipeline projects from the Permian Basin to various points along the Texas Gulf Coast.
- Anchored by Apache’s gathering, processing and transportation assets at Alpine High, Altus Midstream will be a publicly traded, pure-play, Permian Basin midstream C-corp.
- Altus Midstream will also own options for equity participation in five planned pipelines from the Permian Basin to various points along the Texas Gulf Coast.
- Kayne Anderson Acquisition Corp. is contributing $952 million in cash, which comprises $380 million in proceeds raised in its initial public offering and $572 million in proceeds raised in a private placement of Class A shares.
- The new company will have no debt at closing and cash on-hand will be used to fund ongoing midstream investments.
- Gross volumes projected to approach more than 1 billion cubic feet (Bcf) per day of gas, producing approximately 100,000 barrels per day of NGLs by the end of 2020.
- Long-term growth opportunities for Altus Midstream driven by Alpine High upstream development, investments in long-haul pipelines and third-party gathering and processing volumes.
- Apache will own approximately 71 percent of Altus Midstream with the ability to increase to approximately 74 percent subject to performance earn outs.
- Upon expected closing of the transaction in the fourth quarter of 2018, Kayne Anderson Acquisition Corp. will change its name to Altus Midstream Company.
Barclays Capital Inc. and Tudor, Pickering, Holt & Co. acted as financial advisors and Bracewell LLP acted as legal advisor to Apache on the transaction. Citigroup acted as financial advisor and Latham & Watkins LLP acted as legal advisor to KAAC. Citigroup, Barclays and Credit Suisse acted as placement agents on the private placement of Class A shares.
KAYNE ANDERSON ACQUISITION CORP. MANAGEMENT & BOARD
Robert S. Purgason, 60
Mr. Purgason has been Senior Managing Director of Kayne Anderson. Mr. Purgason has over 35 years of experience in the energy industry and most recently served as senior vice president, Access at Williams Companies, Inc. until January 2017, responsible for the Central Operation Area and Operational Excellence for the entire enterprise. Mr. Purgason also held other roles at the Williams Companies, Inc. and its affiliates from 2015 to January 2017. He has operational and commercial knowledge of midstream companies and served as chief operating officer of Chesapeake Midstream Partners, L.L.C. (subsequently named Access Midstream Partners, LP) from 2009 to 2015, and also served as chief operating officer of Crosstex Energy, L.P. (subsequently named EnLink Midstream LLC) from 2006 to 2009. From 2004 to 2006, he served as senior vice president of the Treating Division at Crosstex Energy, L.P. Prior to joining Crosstex, he spent 18 years at Williams Companies, Inc. and its affiliates in various senior-level positions in natural gas liquids, gas marketing, mergers and acquisitions and major project development. He has served on the Board of Directors and is the past Chairman of the Texas Pipeline Association, the Board of Visitors Dean’s Advisory Council for the College of Engineering at The University of Oklahoma, the Advisory Board for the Chemical, Biological & Materials Engineering School at The University of Oklahoma and past Program Chair and Director of GPA Midstream Association, where he authored numerous technical and marketing papers. He is currently a member of the Dallas Wildcat Committee and the National Association of Corporate Directors. Since 2014, Mr. Purgason has served on the board of L.B. Foster Company (NASDAQ: FSTR), a manufacturing company specializing in rail, construction and energy related products. He holds a B.S. degree in Chemical Engineering with honors from the University of Oklahoma.
Terry A. Hart, 47
Mr. Hart is a managing director for Kayne Anderson Capital Advisors, L.P. and since 2005 has served as Chief Financial Officer of Kayne Anderson’s publicly traded closed-end funds and since 2015 as a director of Kayne Anderson Energy Development Company. He is responsible for the oversight of finance, accounting and financial reporting. Prior to joining Kayne Anderson in 2005, Mr. Hart was most recently a senior vice president and controller at Dynegy Inc. (NYSE:DYN), an electricity provider. Prior to that, Mr. Hart served as assistant treasurer and director of structured finance at Dynegy, Inc. He began his finance and accounting career in 1992 with Illinova Corporation, which was acquired by Dynegy Inc. in 2000. Mr. Hart earned a B.S. in Accounting from Southern Illinois University and an M.B.A. from the University of Illinois.
Board of Directors
Kevin S. McCarthy, 57
Chairman of the Board of Directors
Since joining Kayne Anderson in 2004, Mr. McCarthy has been a managing partner for the advisor to the firm’s publicly traded closed-end funds (NYSE: KYN, KYE, KMF and KED). He has been responsible for MLP private equity investments and has served as chairman and chief executive officer of KYN, KYE, KMF and KED. In addition to his directorships at Kayne Anderson funds, since 2005 he has served on the board of directors of Range Resources Corporation (NYSE: RRC), a domestic upstream company, and since 2015 has served on the board of directors of ONEOK, Inc. (NYSE: OKE), the general partner of a large publicly traded MLP. Prior to joining Kayne Anderson in 2004, Mr. McCarthy was most recently global head of energy at UBS Securities LLC, or UBS. In this role, he had senior responsibility for all of UBS’ energy investment banking activities, including direct responsibilities for securities underwriting and mergers and acquisitions in the MLP industry. From 1995 to 2000, Mr. McCarthy led the energy investment banking activities of Dean Witter Reynolds and then PaineWebber Incorporated. Mr. McCarthy earned a B.A. in Economics and Geology from Amherst College and an M.B.A. in Finance from the Wharton School at the University of Pennsylvania.
Robert V. Sinnott, 67
Vice Chairman of the Board of Directors
Mr. Sinnott is co-chairman of Kayne Anderson Capital Advisors, L.P., a position he has held since 2016. He has over 40 years of investment experience and oversees Kayne Anderson’s energy strategies. Since joining Kayne Anderson in 1992, Mr. Sinnott founded and built the firm’s energy platform into one of the largest energy investment firms in the country with over $19 billion in energy investments. He maintains a direct management role in the firm’s energy private equity group and serves as the portfolio manager for two of Kayne Anderson’s hedge funds. In addition, since 1998, Mr. Sinnott has been a member of the board of directors that oversees Plains GP Holdings, L.P. (NYSE: PAGP) and Plains All American Pipeline, L.P. (NYSE: PAA), which is, a large publicly traded MLP, and since 2014 he has been a director of California Resources Corporation (NYSE: CRC), a domestic upstream company. From 1986 to 1992, Mr. Sinnott was a vice president and senior securities officer of the Investment Banking Division of Citibank. Prior to that, Mr. Sinnott led Citigroup’s midstream finance efforts in Houston, Texas. He has also worked for a large diversified pipeline company with subsidiaries in the oil and gas exploration and energy services industries. Mr. Sinnott and five others opened Bank of America’s energy lending activities in Houston in 1976 where they financed independent oil and gas companies as well as diversified pipeline companies. Mr. Sinnott received a B.A. from the University of Virginia and an M.B.A. from Harvard University.
D. Mark Leland, 55
Mr. Leland has served on the board of directors of Deltic Timber Corporation since 2016 and served as its interim president and chief executive officer from October 2016 to March 2017. Mr. Leland has served on the board of directors for the general partner of Rice Midstream Partners LP since 2014 and currently serves as chairman of the audit committee and a member of the conflicts committee. Previously, Mr. Leland served as executive vice president and chief financial officer of El Paso Corporation, a natural gas-focused pipeline and production company, from 2005 to 2009 and president of El Paso’s midstream business unit from 2009 to 2012, and as director of El Paso Pipeline Partners, L.P. from its formation in 2007 to 2012. He served as senior vice president and chief financial officer of El Paso Exploration & Production Company from 2004 to 2005. Mr. Leland served as vice president and chief operating officer of the general partner of GulfTerra Energy Partners, L.P. in 2003, and as vice president and controller from 1997 to 2003. Mr. Leland served on the board of directors of the general partner of Oiltanking Partners, L.P., a crude oil and petroleum products storage provider, from 2012 until 2015 and on the board of directors of KiOR, Inc., a renewable fuels company, from 2013 until 2015. Mr. Leland received a B.B.A. in finance with a minor in economics from the University of Puget Sound in Washington.
R. Rudolph Reinfrank, 61
Mr. Reinfrank has served since 2009 as the managing general partner of Riverford Partners, LLC, a strategic advisory and investment firm which acts as an investor and strategic advisor to growth companies and companies in transition. In 2000, Mr. Reinfrank co-founded and served as a managing general partner of Clarity Management, LLC, the general partner and management company for Clarity Partners, L.P., an investment firm, until 2009. In 2005, he co-founded Clarity China, L.P., an investment firm focused on investments in China, and was affiliated with the firm until 2010. From 1997 to present, he co-founded and served as a managing general partner of Rader Reinfrank & Co., an investment firm. Since 1993, Mr. Reinfrank has served on the board of directors of Parker Drilling Company, a contract driller and service provider. Since 2013, Mr. Reinfrank has served on the board of directors and as chairman of the audit committee of Apollo Investment Corporation, a closed-end investment management company. Mr. Reinfrank previously has served on the boards of directors for Weatherford International PLC (NYSE: WFT), an oil and gas services company, from 1995 to 1998, Enterra Corporation (NYSE: EN), a specialized services provider to the oil and gas industries, from 1986 to 1995 and CRC-Evans Pipeline International, Inc., a pipeline equipment and supply company, from 1986 to 1992. Since 2009, Mr. Reinfrank has also been a senior advisor to Pall Mall Capital, Limited (London), an independent corporate finance business, and Transnational Capital Corporation, a capital formation, financial structuring, and merger and acquisitions advisory services provider, since 2010. Mr. Reinfrank holds an M.B.A. from the Anderson Graduate School of Business at the University of California, Los Angeles and a B.A. in Economics from Stanford University.