Banking Recap

Private Capital Transaction Announced for $8.80B

EQT Corporation (NYSE: EQT), a Pittsburgh-based vertically integrated natural gas company with production and midstream operations in the Appalachian Basin, announced on November 25, 2024 a $3.5 billion midstream joint venture with funds managed by Blackstone Credit & Insurance (BXCI). The joint venture will consist of EQT's ownership interests in Mountain Valley Pipeline, LLC - Series A, FERC-regulated transmission and storage assets, and the Hammerhead Pipeline, a 1.6 billion cubic feet per day gathering header pipeline connecting Pennsylvania and West Virginia natural gas production to MVP and other transmission systems.

Nov 25, 2024·SEC EDGAR (8-K)·pending regulatory·midstream joint venture / minority equity investment

Deal value

This entry is sourced from EQT's Exhibit 99.1 press release filed as part of an 8-K on November 25, 2024. The transaction had not yet closed as of the filing date; it was expected to close in the fourth quarter of 2024, subject to customary closing adjustments and required regulatory approvals and clearances.

RBC Capital Markets, LLC acted as financial advisor to EQT, and Citi acted as financial advisor to Blackstone. No lead designation is specified for either advisor, and no additional financial advisors are disclosed on either side.

Kirkland & Ellis LLP served as EQT's legal counsel on the transaction, and Milbank LLC served as Blackstone's legal counsel.

Under the terms of the agreement, BXCI will provide EQT $3.5 billion of cash consideration in exchange for a non-controlling common equity interest in the joint venture, implying a total JV valuation of approximately $8.8 billion, or roughly 12 times projected EBITDA (derived by dividing projected 2025-2029 average JV free cash flow by a target return, with the EBITDA multiple derived by dividing the JV valuation by projected 2025-2029 average JV EBITDA). EQT stated it plans to use proceeds to pay down its term loan and revolving credit facility and to redeem and tender for senior notes, and that, combined with a separately announced divestiture of non-operated Pennsylvania assets, it expected to exit 2024 with approximately $9 billion of net debt. EQT retains rights to growth projects associated with the contributed assets, including the planned MVP expansion and MVP Southgate project.

The release does not disclose the specific governance terms of the joint venture (such as board composition or voting rights for BXCI's non-controlling stake), any termination or break-up fee, or the fee arrangements for RBC, Citi, Kirkland & Ellis, or Milbank. No information is provided about financing conditions for BXCI's $3.5 billion cash contribution.