HOUSTON, Aug. 22, 2023 (GLOBE NEWSWIRE) -- Quantum Capital Group (“Quantum”), a leading provider of capital to the global energy and climate tech industries, today announced that Quantum Energy Partners (“QEP”) has completed the sale of THQ Appalachia I Midco, LLC (“Tug Hill”) and THQ-XcL Holdings I Midco, LLC (“XcL Midstream”) to EQT Corporation (NYSE: EQT) for a total consideration of approximately $2.4 billion of cash and 49.6 million shares of EQT common stock.
“We are pleased to complete the sale of Tug Hill and XcL Midstream, which we expect to enhance U.S. energy security, affordability and reliability, while supporting the ongoing transition to cleaner energy sources,” said Wil VanLoh, Founder and CEO of Quantum. “We are incredibly proud of the partnership we’ve had with the Tug Hill and XcL Midstream teams over the past nine years. Together, we built one of the premier private upstream and midstream companies in North America, and we are confident that EQT will continue to develop these assets with the same industry-leading ESG standards and realize the financial benefits of some of the lowest cost gas assets in North America. We are excited to once again be a large shareholder in EQT, a company whose management and assets we hold in the highest regard.”
“It has been a privilege to partner with the Quantum team to build what has become one of the largest private integrated upstream and midstream platforms in Southwest Appalachia,” said Michael Radler, CEO of Tug Hill and XcL Midstream. “The Quantum team’s expertise, support and partnership were unique and invaluable elements to our success. I also want to highlight the Tug Hill and XcL Midstream teams for their extraordinary work in building this platform, achieving leading ESG performance and positioning Tug Hill and XcL Midstream to capitalize on the opportunities ahead. Between Tug Hill, XcL Midstream and Quantum, this was truly a team effort, and we are excited to complete this transaction, which further positions EQT as the premier natural gas company in the United States.”
“Quantum has a 25-year track record of partnering with some of the best energy entrepreneurs to build world-class businesses, such as Tug Hill and XcL Midstream, and also establishing them as strategic acquisition candidates for public companies seeking to grow their businesses,” said Tom Field, Partner at Quantum. “Not only did our partnerships with Tug Hill and XcL Midstream generate an attractive return for QEP’s investors on the approximately $1 billion of equity capital we invested, but our collaboration also contributed to both Tug Hill and XcL solidifying themselves as industry leaders, demonstrating that oil and gas investments can be highly profitable while maintaining the highest ESG standards. We thank the Tug Hill and XcL Midstream teams for their outstanding and relentless efforts in achieving this successful outcome.”
As part of the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 process, Quantum agreed to several modifications to the deal as originally contemplated, including disposing its EQT shares by a future, confidential multi-year time period and appointing a voting trustee that will ensure the shares Quantum owns in EQT are voted pro rata with the other EQT common shares. Quantum maintains full ownership and control of its shares and has sole and complete dispositive discretion within the aforementioned timeframe.
Quantum also fully gave up the right to appoint a member to EQT’s board, which follows the firm’s voluntary agreement disclosed in a public 8-K filing by EQT on November 1, 2022, whereby Quantum agreed not to take an EQT board seat at the time of closing as was anticipated when the deal was originally announced. In addition, EQT and Quantum Energy Partners will dissolve The Mineral Company, a pre-existing joint venture between the two companies.
J.P. Morgan Securities and Wells Fargo Securities served as financial advisors to Tug Hill and XcL Midstream and Vinson & Elkins LLP served as legal counsel to Tug Hill and XcL Midstream. TPH&Co., the energy business of Perella Weinberg, provided a fairness opinion to the Board of Directors of Tug Hill. The Messina Group served as strategic advisor to Tug Hill and XcL Midstream.
About Quantum Capital Group
Founded in 1998, Quantum is a leading provider of private equity, credit, and venture capital to the global energy and energy transition industry, having managed together with its affiliates more than $22 billion in equity commitments since inception. For more information on Quantum, please visit www.quantumcap.com.
Jon Keehner / Kate Thompson / Erik Carlson
Joele Frank, Wilkinson Brimmer Katcher