Pembina Pipeline Corporation has agreed to acquire Canada-based Provident Energy, which owns an NGL infrastructure and logistics business. All of the issued and outstanding common shares of Provident will be purchased by Pembina by way of a plan of arrangement.
The shareholders of Provident will get 0.425 of a Pembina share for each Provident share held, representing a premium of 24.7% over last week's closing share price of C$9.51 ($9.28). On completion of the proposed transaction, the combined energy infrastructure company will have a market capitalisation of $7.9bn and total enterprise value of $10bn.
The acquisition combines the energy transportation and gas processing businesses of Pembina with Provident's suite of services including NGL extraction, fractionation, storage, transportation and logistics.
Pembina president and CEO Bob Michaleski said that the assets, employees, customers and growth projects of Provident are an outstanding fit for Pembina.
"Our expanded footprint will provide greater access to natural gas liquids markets across North America, and will allow us to offer customers a significantly expanded spectrum of energy services," Michaleski said.
The combined entity will be operated under the Pembina name and will be led by a combination of a Pembina and Provident executive team. Provident president and CEO Doug Haughey said that the transaction leverages off Provident's strong growth as a pure play midstream business.
Canada-based Pembina owns and operates oil sands pipelines, and transports crude oil and NGL produced in western Canada.