New Fortress Energy is paying $5bn to buy Tor Olav Troim-led Hygo Energy Transition and Golar LNG Partners.
US-listed New Fortress said on Wednesday that it had entered into “definitive agreements” to buy Nasdaq-listed Golar LNG Partners and Hygo, the 50:50 joint venture between Golar LNG and a fund managed by Stonepeak Infrastructure Partners.
Under the surprise deal, New Fortress will acquire an operating floating storage and regasification unit terminal and a 50% interest in Golar LNG's 1,500 MW power plant in Sergipe, Brazil.
The Wes Edens-led company will also secure two other FSRU terminals with 1,200 MW of power in advanced stages in Brazil.
Hygo's fleet comprises one FSRU newbuilding and two existing LNG carriers.
With the buyout of Golar LNG Partners, New Fortress said it will also acquire six FSRUs, four LNG carriers and a 50% interest in Trains 1 and 2 of the floating liquefaction unit Hilli Episeyo.
Shares and cash
It said this will support both New Fortress' existing facilities and its international project pipeline.
Under the agreement, New Fortress will acquire all of the outstanding shares of Hygo — which last year was forced to pull a planned initial public offering after an investigation of its chief executive — for 31.4m New Fortress shares and $580m in cash.
The transaction is valued at a $3.1bn enterprise value and a $2.18bn equity value.
Golar LNG will receive 18.6m New Fortress shares and $50m in cash and Stonepeak will receive 12.7m New Fortress shares and $530m in cash.
The transaction has been approved by Hygo's board along with Golar LNG and Stonepeak's shareholders.
The deal is expected to be closed in the first half of 2021.
New Fortress chairman and chief executive Edens said: “With a strong presence in Brazil and a world-class LNG shipping business, Hygo and GMLP [Golar LNG Partners] are excellent additions to our efforts to accelerate the world’s energy transition.
“The addition of Hygo will quickly expand our footprint in South America with three gas-to-power projects in Brazil’s large and fast-growing market," he added.
"With GMLP, we gain LNG ships and world-class operators that are an ideal fit to support our existing terminals and robust pipeline.”
Best buddies
Golar LNG and Hygo chairman Tor Olav Troim, who is a friend and business associate of Edens, said: “We are impressed with what Wes Edens and the New Fortress team have created and their commitment to changing the energy industry.
“They share our vision to provide cheaper and cleaner energy to a growing population. The consolidation of two of the entrepreneurial LNG downstream players gives the company improved access to capital and creates a unique world-leading energy transition company which Golar shareholders will benefit from being a part of going forward.”
Edens was equally complementary of his friend.
“Tor Olav Troim and his teams have been pioneers in the global shipping and energy industries,” he said.
“The addition of this great portfolio of assets enhances our fully integrated approach and we’re excited for them to become part of NFE [New Fortress]. This is a great step towards our goal of finishing this year with fifteen to twenty terminals that bring more clean and affordable energy to growing markets around the world.”
