Hess Midstream Partners (now known as Hess Midstream Operations LP), a key player in the midstream energy sector, has officially announced the completion of its strategic acquisition of Hess Infrastructure Partners LP (HIP). This significant move also includes an IDR simplification and a conversion to an “Up-C” structure. The transition was finalized through a merger with Hess Midstream LP (“Hess Midstream”), which is structured as a corporation for U.S. federal income tax purposes.
Effective immediately following the transaction, each common unit previously held by public unitholders of Hess Midstream Partners LP has been converted on a one-for-one basis. These units are now represented by newly issued Class A shares in Hess Midstream, the newly formed publicly listed entity. Approximately 17 million Class A shares were issued to Hess Midstream Partners LP public unitholders based on the existing number of common units.
As part of this corporate restructuring, Hess Midstream Partners LP has changed its name to Hess Midstream Operations LP. It will operate as a consolidated subsidiary of Hess Midstream, the new parent company that is now publicly listed. Trading of Hess Midstream Partners LP common units on the New York Stock Exchange (NYSE) ceased after market close today. Starting from December 17, 2019, the newly issued Class A shares of Hess Midstream commenced trading on the NYSE under the ticker symbol “HESM”.
Jonathan Stein, Chief Financial Officer of Hess Midstream, commented on this transformative event, stating, “Hess Midstream has successfully transitioned from a small-cap MLP to a more substantial midstream company with an enterprise value of approximately $8 billion.” He further highlighted the benefits for investors, noting, “A more diversified investor base can now participate in our differentiated business model. This model is characterized by strong expected EBITDA and distribution growth, along with robust free cash flow generation, all supported by our industry-leading contract structure and a conservative balance sheet.”
This acquisition and corporate conversion marks a new chapter for Hess Midstream Partners, positioning it for continued growth and broader investor appeal within the energy midstream sector.
