US infrastructure and real assets firm Stonepeak has closed its acquisition of Teekay LNG Partners, an owner and operator of liquefied natural gas carriers. The previously announced deal reflected an enterprise value of $6.2 billion and a common unit equity value of $1.5 billion. The seller, Teekay Corp, a Vancouver-based marine energy transportation services company, received gross cash proceeds of about $641 million.
HAMILTON, Bermuda, Jan. 13, 2022 (GLOBE NEWSWIRE) — Teekay Corporation (Teekay) (NYSE:TK) announces the closing of the previously announced merger of Teekay LNG Partners L.P. (Teekay LNG) (NYSE:TGP) with investment vehicles managed by Stonepeak (the Merger). As part of the Merger, Teekay sold all of its ownership interest in Teekay LNG, including approximately 36.0 million Teekay LNG common units, and Teekay GP L.L.C., Teekay LNG’s general partner (equivalent to approximately 1.6 million Teekay LNG common units), for $17.00 per common unit or common unit equivalent in cash, and transferred various management services companies to Teekay LNG that provide the operations for Teekay LNG and certain of its joint ventures under existing management services contracts.
As consideration, Teekay received total gross cash proceeds of approximately $641 million.
In mid-December 2021, Teekay elected to redeem all of its outstanding 9.25 percent Senior Secured Notes due in November 2022 (the 2022 Notes) under the related indenture at 102.313 percent of the principal amount. As of January 12, 2022, Teekay had $243.4 million total aggregate principal amount of the 2022 Notes outstanding. The redemption is expected to be completed on January 14, 2022. In addition, on January 10, 2022, Teekay announced a cash tender offer for any and all of its outstanding 5.0 percent Convertible Senior Notes due in January 2023 (the 2023 Notes) at 102.0 percent of the principal amount. As of January 12, 2022, Teekay had $112.2 million total aggregate principal amount of the 2023 Notes outstanding. The cash tender is expected to be completed in February 2022.
“Teekay’s operating franchise and industry-leading capabilities have been developed over our nearly 50-year history as a leader in the constantly evolving energy and transportation sectors. We believe the significant financial strength we now have following this transaction puts us in an excellent position to pursue a range of attractive investment opportunities that leverage Teekay’s core competencies and institutional knowledge to create long-term shareholder value,” commented Kenneth Hvid, Teekay’s President and CEO. “Following the retirement of our debt, the main components of our balance sheet will consist of cash of approximately $325 million, equivalent to $3.20 per share alone; an economic interest in Teekay Tankers Ltd. of approximately 30 percent; and a profitable asset-lite marine services business in Australia. We are excited about the flexibility that this gives us as we see both positive fundamentals in the tanker sector and a growing demand for new transportation solutions that will enable the shift to a lower-carbon world.”
Teekay is a leading provider of international crude oil and other marine transportation services. Teekay provides these services directly and through its controlling ownership interest in Teekay Tankers Ltd. (NYSE:TNK), one of the world’s largest owners and operators of mid-sized crude tankers. The consolidated Teekay entities manage and operate total assets under management of approximately $2 billion, comprised of approximately 55 conventional tankers and other marine assets. With offices in 8 countries and approximately 2,500 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading energy companies.
Teekay’s common stock is listed on the New York Stock Exchange where it trades under the symbol “TK”.