Antero Midstream Partners Mergers and Acquisitions Presentation Deck
AMGP Acquisition of AM - Summary
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A combination of AMGP and AM via acquisition represents an attractive transaction from each of the AM, AMGP and AR
perspectives
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Overview
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Benefits
Dramatically improves "mis-alignment" issue; positive for AR
Value proposition is compelling to both AM and AMGP
- AM receives up-front premium and accretion to distributions beginning in year 4
- This profile compares favorably to precedent simplifications
- Tax shelter provided by step-up enhances DCF
- AMGP gets 100%+ up-front accretion and still enjoys 25% higher distributions 5
years out
- Our analysis indicates AMGP will hold value and even improve
- DDM and yield-vs.-growth correlation indicate upside from current share price
Structure provides larger float, liquidity and access to institutional capital
- IDR elimination improves long-term cost of capital
- Reduces overhang risk at AM level (which currently exists through AR's 53% LP
ownership of AM)
Research analysts have done some pre-conditioning by referring to the AMGP
acquisition of AM as most logical combination structure
- Also notable that GP take of cash flow is highest for AM vs. peers beginning in
2021
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Considerations
Taxable to AM unitholders
Taxable to AR, though fully
shielded by NOLS
AM distribution dilution in 2018 -
2020
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