ONEOK Acquires Brazos Midstream Assets with Apollo Funding

M&A · Partnership
โดย Insider Monkey·US·Read original
Summary · why it matters

ONEOK, Inc. has agreed to acquire Brazos Midstream's Permian Midland Basin assets for $4.425 billion in cash, funded by a $9 billion nonvoting minority equity investment from Apollo-managed funds, which will also support approximately $5 billion of debt extinguishment. The minority investor's internal rate of return is capped at 7.0% for nine years, below ONEOK's cost of publicly traded equity, and the company expects pro forma 2027 leverage to decline to approximately 3.25 times debt-to-EBITDA without issuing common shares. The acquisition covers approximately 600,000 dedicated acres under fixed-fee contracts with a weighted average remaining term exceeding 12 years, and more than doubles ONEOK's Midland Basin processing capacity to approximately 2.3 billion cubic feet per day. ONEOK expects immediate earnings-per-share accretion, but the bear case notes that the Class B interest participates in existing operations, and the stated 7.5 times 2027 adjusted EBITDA multiple includes approximately $80 million of annual synergies, implying a higher multiple when calculated with rounded inputs. Hedge fund sentiment showed 43 funds holding ONEOK at the end of 2Q2026, down from 50 funds three months earlier.

Impact on stocks 3

Energy▲ · 2 stocks
ONEOK Inc
OKE
▲ PositiveCapitalrelevance

ONEOK agrees to acquire Brazos Midstream's Permian Midland Basin assets for $4.425B cash, funded without issuing common shares and expected to be immediately EPS-accretive.

Aging Population▲ · 1 stocks
Apollo Global Management LLC Class A
APO
▲ PositiveCapitalrelevance

Apollo-managed funds make a $9B nonvoting minority equity investment in ONEOK to fund the Brazos acquisition, a major capital deployment.

Off-coverage companies 1

Brazos Midstream HoldingsPrivate▲ Positive
Capitalrelevance

Brazos Midstream Holdings is selling its Permian Midland Basin assets to ONEOK for $4.425 billion in cash.

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