Antero Midstream Announces A Bolt-On Acquisition Of Gathering And Compression Assets In The Marcellus Shale For $70M; Increases 2024 Adjusted EBITDA And Free Cash Flow Guidance By $15M And $10M, Respectively
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Antero Midstream Corporation (AM) has completed a $70M acquisition of gathering and compression assets in the Marcellus Shale from Summit Midstream Partners LP (SMLP), expected to be over 5% accretive to Free Cash Flow after dividends through 2027. This acquisition increases AM's 2024 Adjusted EBITDA and Free Cash Flow guidance by $15M and $10M, respectively. Additionally, AM announced the redemption of all its outstanding 7.875% Senior Notes due 2026 for redemption on May 16, 2024, to be funded with cash on hand and borrowings under its revolving credit facility.
May 02, 2024 | 8:44 pm
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NEUTRAL IMPACT
Summit Midstream Partners LP sold gathering and compression assets in the Marcellus Shale to Antero Midstream for $70 million. This transaction may impact SMLP's short-term liquidity positively but could also affect its long-term revenue generation capabilities.
While the sale provides immediate cash inflow for SMLP, it's uncertain how this divestiture will affect its long-term operational and financial performance.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Antero Midstream's acquisition of Marcellus Shale assets for $70M from SMLP is expected to be accretive to Free Cash Flow by over 5% through 2027, with a $15M increase in 2024 Adjusted EBITDA and a $10M increase in Free Cash Flow. The company also plans to redeem all outstanding 2026 Senior Notes, indicating a strong financial position and commitment to reducing debt.
The acquisition is directly accretive to AM's financial metrics, indicating a positive impact on its stock price in the short term. The redemption of senior notes further strengthens its balance sheet, making it an attractive investment.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100