By Dharna Bafna
Nov 10 (Reuters) - Diamondback Energy and private equity firm KKR have agreed to acquire Five Point Infrastructure's 70% stake in Deep Blue Midland Basin, a water infrastructure firm in the Permian Basin, the companies said on Tuesday.
The financial terms of the deal were not disclosed.
The deal involves an estimated $2.1 billion in consideration for Five Point's stake in Deep Blue, a source familiar with the matter told Reuters.
Here are more details:
• The companies said the investment could pave the way for further joint investments in infrastructure as energy and industrial activity expands across the Permian Basin
• Deep Blue provides water sourcing, transport, recycling and disposal services in the Midland Basin
• Diamondback, which already owned the remaining 30% stake in Deep Blue, said the system supports nearly 2 million barrels of water per day for its operations
• Truist Securities analysts estimate Diamondback will contribute about $602 million to increase its ownership to 50% from 30%, while KKR will pay about $1.51 billion for the remaining 50%, assuming both buyers pay the same pro-rata price, with no acquisition-level financing, fees or earnout settlement
• The transaction is expected to close in the fourth quarter this year
• Diamondback Energy did not respond to a request for comment on the financial terms of the transaction, while KKR declined to comment
(Reporting by Dharna Bafna in Bengaluru; Editing by Leroy Leo)