Global alternative asset firm TPG Capital has agreed to acquire a majority stake in Texas-based Goodnight Midstream for a sum of nearly $930m from Tailwater Capital and private investors.
Tailwater Capital and other existing shareholders of Goodnight Midstream, including its management, will retain a significant minority stake in the company, which is a midstream provider of oilfield water management infrastructure.
Headquartered in Dallas, the company focuses on building and operating produced water gathering and disposal systems. It collects, transports, and disposes over 350,000 barrels of produced water per day through its network of more than 676km of dedicated produced water gathering and transportation pipelines to go along with over 50 saltwater disposal wells.
Founded in 2011, Goodnight Midstream serves producers in various US basins such as the Delaware, Midland, Bakken and Eagle Ford.
Goodnight Midstream CEO Patrick Walker said: “Our piped systems save our customers money while reducing the environmental impact of oil and gas production.
“I’m proud of what our team has accomplished in eight years and look forward to leveraging TPG’s strong network and expertise in the midstream space as we continue to build the mission critical infrastructure required by our world-leading E&P customers.”
As per the transaction terms, TPG Capital and existing shareholders will commit additional equity capital to support the continued growth of the midstream business.
The midstream company is expected to have access to over $300m of capital to finance its expansion from the additional growth equity and proceeds from committed debt financing.
According to TPG Capital, Goodnight Midstream is well placed to sustain high growth owing to the 800,000 plus dedicated gross acres it holds along with a permitted water disposal capacity of over 1.4 million barrels per day.
TPG Capital partner Christopher Ortega said: “The team at Goodnight Midstream has created a differentiated approach to providing produced water services through a dynamic midstream model.
“As the midstream water sector continues to develop and mature, we believe the company is well positioned to emerge as a leading provider of scale. We’re excited to support the company through its next chapter of growth.”
The transaction, which will be subject to customary closing conditions, is anticipated to be completed in the second quarter.