Citi, Others Advise Southcross Energy, TexStar Combination
Southcross Energy, the owner of the general partner of Southcross Energy Partners, announced that it has entered into a definitive agreement to combine with TexStar Midstream Services.
Financing for the entire transaction has been fully underwritten by a group of lenders including Wells Fargo, UBS Investment Bank and Barclays at the Southcross level and by UBS Investment Bank and Barclays at the Holdings level. Citi is serving as financial advisor to Southcross; Barclays, Evercore Partners and UBS Investment Bank are serving as financial advisors to TexStar.
The transaction will create the premier Eagle Ford-focused midstream combination, which will include four processing plants, three fractionation facilities and approximately 3,700 miles of pipeline.
In conjunction with the closing of the transaction, Southcross will acquire the TexStar Rich Gas System. The Rich Gas System consists of a processing plant located in Bee County, TX, and over 230 miles of rich natural gas gathering pipelines. The Rich Gas System will be acquired by Southcross for approximately $450 million funded with 14.633 million newly-issued PIK Southcross common units issued to Holdings and $180 million of cash from new borrowings at Southcross.
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