Tallgrass Energy ups stake in Pony Express Pipeline

Tallgrass Energy Partners now owns 98% of Pony Express Pipeline

LEAWOOD, Kan. – Tallgrass Energy Partners, LP announced today that it is acquiring an additional 31.3 per cent interest in Tallgrass Pony Express Pipeline, LLC for $475 million cash and 6.518 million TEP common units issued to Tallgrass Development.

“This acquisition demonstrates our continued commitment to execute on our strategic plan to grow TEP and increase the cash distributions to our unitholders, even in challenging capital market conditions,” said CEO David G. Dehaemers, Jr.

Based on TEP’s December 31st closing price of $41.21, the total consideration of approximately $743.6 million represents a multiple of approximately nine times incremental cash flow to TEP as a result of the acquisition. The acquisition increases TEP’s membership interest in Pony Express to 98 per cent.

Tallgrass President and CEO, David G. Dehaemers, Jr

“The attractive acquisition multiple, the inclusion of equity consideration and other favorable terms of the purchase agreement showcase the supportive nature of TEP’s relationship with Tallgrass Development,” said Dehaemers, Jr.

“Consistent with our first two Pony Express acquisitions, we expect this transaction to be immediately accretive to unitholders and intend to recommend that our board of directors increase our quarterly distribution for the first quarter of 2016 by at least $0.06 per unit over our distribution of $0.64 per unit for the fourth quarter of 2015. We continue to affirm our previous distribution growth guidance of approximately 20 percent annually from 2015 through 2017.”