Targa Resources Corp. has announced it will acquire Lucid Energy Delaware, LLC from Riverstone Holdings LLC and Goldman Sachs Asset Management for $3.55 billion in cash.
Lucid provides natural gas gathering, treating, and processing services in the Delaware Basin of New Mexico. It operates about 1,050 miles of natural gas pipelines and 1.4 billion cubic feet per day of cryogenic natural gas processing capacity, including some of the most economic crude oil and natural gas producing acreage in North America.
Houston-based Targa Resources Corp. is one of the largest infrastructure companies to deliver natural gas and natural gas liquids in the U.S. Its standalone 2022 financial and operational outlook has continued to improve, with Targa estimating full-year standalone adjusted EBITDA to be between $2.675 billion and $2.775 billion and reported year-end leverage ratio of about 2.7 times.
“[This] has afforded us the flexibility to consider attractive opportunities to grow our business through acquisitions, as evidenced by our ability to finance the purchase of Lucid utilizing available cash and debt with estimated pro forma year-end 2022 leverage around 3.5 times, well within our long-term leverage ratio target range,” said Matt Meloy, Targa’s Chief Executive Officer.
The purchase increases Targa’s size and scale in the Delaware Basin. Completion of this transaction, which is expected in the third quarter, is subject to customary closing conditions, including regulatory approvals. Targa has available liquidity, including cash on hand, an existing $2.75 billion revolving credit facility, and committed debt financing to fund the acquisition.