Expand Energy announced it will buy privately held natural gas marketer Twin Eagle Holdings from Five Point Infrastructure for $1.25 billion to expand its marketing business across North America.

Deal Details

With U.S. natural gas demand expected to grow, producers are increasingly expanding into marketing and logistics businesses to improve margins and gain greater control over how gas reaches end-users. Founded in 2010, Twin Eagle is an independent natural gas and power marketer, with operations spanning wholesale marketing, asset management, logistics and analytics.

Following the deal’s expected completion in the third quarter, it will operate as a wholly owned subsidiary of Expand, with key members of Twin Eagle’s management team, including Chief Executive Jeremy Davis, staying on, the companies said. Expand now expects $750 million per year of incremental free cash flow from its marketing and commercial strategy, a 50% jump from its previous target.

Market Impact

The combined company is expected to reach about 90% of the U.S. and Canadian natural gas market through access to key demand centers, the companies said. Expand plans to fund the acquisition through a mix of cash on hand and borrowings under its revolving credit facility.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.