Hess Midstream LP announced that it has entered into a definitive agreement for the repurchase of approximately $100 million of Class B units by its subsidiary, Hess Midstream Operations LP, from affiliates of Hess Corporation and Global Infrastructure Partners, Hess Midstream’s sponsors. The terms of the repurchase transaction were unanimously approved by the board of directors of Hess Midstream’s general partner, based on the unanimous approval and recommendation of its conflicts committee composed solely of independent directors.
“We continue to execute unit repurchase transactions as part of our unique financial strategy, which highlights our differentiated ability to deliver significant shareholder returns while also maintaining balance sheet strength,” said Jonathan Stein, chief financial officer of Hess Midstream. “Since the beginning of 2021 through this current transaction, we will have returned $1.75 billion to shareholders through ongoing unit repurchases from our sponsors that have reduced the total unit count by nearly 25 percent. Following this unit repurchase, which is expected to provide immediate accretion to our shareholders, we expect to continue to have more than $1.25 billion of financial flexibility through 2026 that can be used to support potential incremental unit repurchases.”
Under the terms of the repurchase agreement, the repurchased units will be cancelled upon closing, which is expected to increase distributable cash flow per Class A share and provide capacity for incremental distribution growth above Hess Midstream’s annual distribution target of at least 5 percent through 2026, consistent with Hess Midstream’s return of capital framework.
Hess Midstream Operations LP, Hess Midstream’s consolidated subsidiary, has agreed to repurchase 2,724,052 Class B units of Hess Midstream Operations LP, equal to approximately 1.2 percent of the consolidated company, held by the Sponsors for an aggregate purchase price of approximately $100 million. The purchase price per Class B unit is $36.71, the closing price of the Class A shares on June 24, 2024. After completing the unit repurchase transaction, ownership of Hess Midstream on a consolidated basis will be approximately 41.0 percent for the public, 21.2 percent for Global Infrastructure Partners, and 37.8 percent for Hess Corporation. The unit repurchase is anticipated to close on June 26, 2024. Hess Midstream expects to fund the unit repurchase with cash on hand.
For more information visit www.hessmidstream.com
