Singapore’s sovereign wealth fund GIC has acquired a minority stake in midstream waste-water management firm WaterBridge Resources LLC from US-based private equity Five Point Energy LLC.
The deal pegs the enterprise value of WaterBridge at approximately $2.8 billion. The transaction has closed and is not subject to any additional conditions.
A Wall Street Journal report said the investment was for a 20 per cent stake.
Five Point Energy, which is focused on the midstream energy sector, acquires and develops in-basin assets, provides value-added growth capital, and builds midstream companies with premier management teams and industry-leading E&P partners.
Based in Houston, Five Point Energy manages more than $2.5 billion of capital across multiple investment funds. WaterBridge Resources LLC is a portfolio company of Five Point Energy, which started the firm with $200 million of seed money in 2016.
Under the terms of the transaction, GIC and Five Point Energy have committed to a framework to provide incremental equity capital to facilitate WaterBridge’s current pipeline of accretive acquisition and organic growth opportunities.
WaterBridge claims that it is leading the energy industry in handling produced water from the oilfield in an environmentally responsible manner.
Its integrated infrastructure provides safe and reliable transportation and treatment of water produced in association with oil and gas production and facilitates recycling and reuse of oilfield water for leading oil and gas producers.
“Through our combined resources, WaterBridge has unparalleled access to the capital needed to continue executing the company’s growth strategy,” said Stephen Johnson, CEO, WaterBridge.
GIC’s investment scrapped WaterBridge’s planned initial public offering (IPO), according to a Wall Street Journal report. In June 2018, WaterBridge had submitted a draft registration statement to the US Securities and Exchange Commission relating to a proposed IPO.
The investment bodes well with GIC’s primary strategy to invest directly in operating infrastructure assets with a high degree of cash flow visibility and which provide a hedge against inflation.
Early this month, GIC invested in Terminal Investment Ltd, a Swiss firm that invests in, develops, and manages container terminals around the world.
Its most recent investments include Checkout, a European firm that helps companies accept more payments around the world through one integration; and India Grid Trust, an infrastructure investment trust established to own inter-state power transmission assets in India.