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CNX Resources to Acquire Outstanding Stake in CNX Midstream

Announced Date
July 27,2020
Deal Value $
357,000,000
Transaction Type
Corporate
Buyer
Seller
Source Documents:
   Source Link
Location
Region
Northeast - Appalachia

Country
United States

State
West Virginia

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Transaction Details: 

CNX Resources Corp. has inked a deal whereby it will acquire all of the outstanding common units of CNX Midstream that it does not already own in an all-stock deal valued at approximately $357 million, based on the most recent closing price of CNX common stock.

Under the merger agreement, each outstanding common unit of CNX Midstream that CNX does not already own will be converted into 0.88 shares of CNX common stock.

This represents a 15% premium to the average exchange ratio during the 30 trading days ended July 24, 2020.

The deal is scheduled to close in Q4 2020.

Nicholas J. DeIuliis, president and CEO, said: "We believe that this take-in transaction of CNX Midstream Partners is the optimal solution for all relevant stakeholders given the near- and long-term view of the MLP market. We expect the combined entity to be an even stronger company with a lower cost of capital and increased investable free cash flow."

Don W. Rush, CFO, added, "Following the completion of the transaction, CNX is expected to be the lowest cost producer in the Appalachian Basin, with increased operational flexibility and basin leading operational metrics. Stockholders of CNX and unitholders of CNX Midstream are expected to benefit from a combination of synergies including improved equity trading liquidity, enhanced financial flexibility to optimize cash flows, and an improved credit profile."

Additional Transaction Terms and Details

Pursuant to the terms of the merger agreement, CNX will acquire all of the approximately 42.1 million outstanding common units of CNX Midstream that it does not already own at a fixed exchange ratio of 0.88 shares of CNX common stock for each publicly held common unit of CNX Midstream. CNX Midstream common units will no longer be publicly traded after the transaction. In aggregate, CNX will issue approximately 37 million shares in connection with the proposed transaction, representing approximately 17% of the total shares outstanding of the pro forma combined entity.

CNX has agreed to vote the CNXM common units that it owns in favor of the transaction. CNX currently owns approximately 53.1% of the outstanding common units.

Advisors

Citi is acting as exclusive financial advisor and Latham & Watkins LLP is acting as legal advisor to CNX. Intrepid Partners, LLC is acting as exclusive financial advisor and Baker Botts L.L.P. is acting as legal advisor to the Conflicts Committee of the CNXM Board.

Northeast - Appalachia Deal Activity In Last 12 Months




Other CNX Resources Deals



Announced DateBuyerSellerDeal Value($mm)LocationCategory
Dec-15-2017 - - Click here   Midstream