Harvest Partners PIPEs Regency Energy

Regency Energy Partners (Nasdaq: RGNC) has raised $80 million in a private placement from Harvest Partners and MTP Energy Management.


Harvest Partners announced today that MTP Energy Management and Harvest Partners completed an $80 million investment in Series A Convertible Preferred Units of Regency Energy Partners LP (“Regency”).  The new security is an innovative and attractive source of growth capital for master limited partnerships.

Dallas-based Regency (NASDAQ: RGNC), is a midstream natural gas services provider committed to enhancing and building America’s energy infrastructure.  Regency owns approximately 5,950 miles of gathering pipeline and nine active treating/processing plants in Louisiana, the Mid-continent region (Kansas and Oklahoma), and East, South and West Texas, as well as a 38% interest in the Haynesville Joint Venture, which owns the Regency Intrastate Gas System, consisting of 320 miles of intrastate pipeline in North Louisiana. Regency’s assets also include over 767,000 third-party revenue generating horsepower of compression in Arkansas, Louisiana and Texas.


The units were priced at $18.30 per unit, pay a fixed quarterly distribution of $0.445 per unit and are convertible into common units on a one-for-one basis following a six-month period. Regency intends to use $63 million of the net proceeds from the offering to purchase an additional 5% ownership interest in the Haynesville Joint Venture from an affiliate of GE Energy Financial Services.  Upon closing, Regency’s total ownership interest in the Joint Venture will be 43%, and an affiliate of GE Energy Financial Services will retain a 7% partnership interest.  Regency intends to use the balance of the proceeds from the offering to fund ongoing, fee-based growth projects and further strengthen its position in the Haynesville Shale.


Michael B. DeFlorio, Senior Managing Director at Harvest Partners said, “We are delighted to announce our investment in Regency, which greatly advances Harvest’s long-term commitment to the energy sector.  Regency embodies our investment strategy focused on exceptionally-managed, fee-based midstream service providers participating in the most promising resource plays in the industry.  We are also pleased to have the opportunity to partner with MTP Energy in this transaction and leverage MTP’s energy investment expertise.”


Christopher D. Whalen, Principal at Harvest Partners, said, “Regency’s continued ability to execute its long-term growth strategy speaks to the strength of the team and the company’s compelling fee-based business model and hedging program.  Regency is well-positioned as a first-mover in emerging developments such as the Haynesville and Eagle Ford Shales, and we recognized an opportunity to participate in its future growth by providing an innovative capital solution.”


About Harvest Partners

Founded in 1981, Harvest Partners is a New York-based private equity investment firm, pursuing management buyouts and growth financings.  Focused on manufacturing, energy, specialty services and consumer businesses, Harvest Partners has over 25 years of experience investing in domestic and multinational companies.  Harvest Partners invested in Regency through its Harvest Energy Investors, LLC vehicle.  For more information on Harvest Partners, please visit the web site at www.harvpart.com.