Midstream operator Targa Resources Partners LP, backed by equity partners Warburg Pincus and Merrill Lynch Global Private Equity, plans to launch an initial public offering (IPO) to hold some of its natural gas assets. Timing for the IPO has not been announced.
Targa's announcement follows the IPO launched by Enterprise Products Partners LP last week for Duncan Energy Partners LP, also a midstream company (see Daily GPI, Jan. 26).
The Houston-based company said it will offer 16.8 million units, initially price at $19-21/unit, with a proposed market capitalization of $565 million. The common units would be listed on the Nasdaq Global Market under the symbol "NGLS." Citigroup, Goldman Sachs, UBS and Merrill Lynch are the joint book runners on the deal.
The units sold represent 58.1% of the outstanding equity of Targa Resources Partners, or 61.4% if the underwriters exercise in full their over-allotment option. Targa Resources Inc. will indirectly own the remaining equity interests in the new company.
Targa Resources Inc. was formed in 2003 by Warburg Pincus. Targa's business units are located along the Gulf Coast, and in the Gulf of Mexico (GOM), Midcontinent and Rocky Mountains. Its first major acquisition was in April 2004, when it purchased some midstream gas operations from ConocoPhillips (see Daily GPI, April 2, 2004). In 2005, it purchased Dynegy Midstream Services for $2.35 billion (see Daily GPI, Nov. 1, 2005).
Targa now owns or operates more than 11,300 miles of natural gas gathering and natural gas liquid pipelines. Its gathering systems cover 14,400 square miles, and it has 22 gas processing plants with more than 10,250 MMcf/d of gross processing capacity. Onshore and straddle plant assets access natural gas supplies in the Permian Basin, Fort Worth/Bend Arch Basin, South Louisiana Basin, deepwater and deep shelf GOM.
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