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TPG Growth to acquire Discovery Midstream

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World Pipelines,

TPG Growth, the middle market and growth equity platform of global alternative asset firm TPG, announced that it has entered into a definitive agreement to acquire Discovery Midstream (Discovery), a Dallas-based provider of oil and natural gas gathering and natural gas processing services in the southern portion of Colorado’s Denver-Julesburg Basin. Discovery’s current management team will continue to run the company post-transaction and is investing alongside TPG Growth in this transaction. Additional terms of the transaction were not disclosed.

Discovery’s assets are strategically located in Weld and Adams counties. The company is currently constructing more than 120 miles of pipeline and a 60 million ft3/d natural gas processing plant, which is expected to come online in the third quarter of 2017. The company plans to expand the plant capacity to 260 million ft3/d in 2018. Discovery’s system is supported by long-term contracts with leading producers in the DJ Basin.

“In partnering with Discovery, we are backing a strong and experienced management team that is building a cost-effective, full service, high quality midstream platform in one of the most attractive basins in the US,” said Christopher Ortega, Partner at TPG. “Since inception, Discovery has done an impressive job of building deep community relationships in Colorado and maintaining a focus on safety, both of which we look forward to continuing under our ownership. We have a long relationship with the Discovery team and are excited to assist the company in continuing its commercial success and growing the platform.”

“From grassroots development projects to operating and optimising midstream assets, we founded Discovery with a mission of providing superior service and maximum value for our producers. We appreciate the support from our existing equity partners in bringing Discovery to this inflection point, and look forward to accelerating the company’s growth over the next phase of value creation through our partnership with TPG,” said Steven Meisel, Partner at Discovery.

“In partnering with TPG, we are exceptionally well positioned to continue serving our existing customers and look forward to expanding our system in this next phase of growth. TPG’s strong network of industry relationships, strategic vision, and experience building businesses of scale in the oil and gas space make them an ideal partner to help us capitalise on the exciting growth opportunities that lie ahead,” said Drew Chambers, Partner at Discovery.

The transaction is expected to close in the third quarter of 2017. TPG Growth’s legal advisor for the transaction is Vinson & Elkins LLP. Discovery’s financial advisor for the transaction is Evercore, and its legal advisor is Weil, Gotshal & Manges LLP.

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